CONFIDENTIAL
BACKGROUND NOTE
KAI TAK AIRPORT
The Hong Kong Government is extending the runway (including taxiways and parking apron) and the terminal
buildings at Kai Tak airport at a total cost of about
Two years ago they asked us for a loan
£13 million.
of £6 million at 7% interest repayable over fifteen
years to help pay for this work, but it has not so far
proved possible to agree to this. The only possible
sources of UK funds would be either the aid progranne
(but because of her wealth, Hong Kong is not considered to be "aid worthy) or perhaps the Board of Trade's civil
aviation votes but they have no money for additional
projects.
2.
Unofficial members of the Hong Kong Legislative
Council raised this subject in April this year and were
told that although the United Kingdom Government could
not help at that time, the matter would be given further
consideration in a year's time.
3. On financial grounds Hong Kong has a weak case for
assistance. Government reserves are considerable (about
£80 million) and revenue continues to outstrip expenditure
each year.
The case for assistance rests on political
grounds and on meeting the strong public feeling in Hong
Kong that the United Kingdom, which derives substantial
benefits from the control of traffic rights at Kai Tak,
has an obligation to share in the cost of maintaining
the airport at modern international standards.
4. The Hong Kong Government has decided to go ahead
CONFIDENTIAL
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