TNAG-0641-FCO40-789-Discussions-between-Hong-Kong-and-Macao-for-proposed-constru-1977 — Page 46

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DEPARTMENT OF TRADE

SHELL MEX HOUSE STRAND

LONDON WC2R ODP

SECRET

Mr P Boon

MG D

FCO

Great George Street

SW 1

REGIN

RET.

3. #1

1 APR 1977

HKK 182/412/

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Telephone Direct Line 01-217

Switchboard 01-217 3000

3142

29 March 1977

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Dear Peter,

MACAU AIRPORT

You copied to me Drace-Francis' letter of 8 March 1977 to Milton in HKD on this subject; and you subsequently passed to me a copy of Milton's letter of 6 January 1977 to Drace-Francis on the same subject. Since then we have discussed the matter in general terms and you said that HKD would welcome written comments ond my attempt to redraft the proposed Note to the Portuguese Ambassador.

2

May I begin by dealing with paragraph 2 of the memo of 31 January from DCA Hong Kong to the Secretary for Economic Affairs Hong Kong. Mr Downing has set forth clearly the Hong Kong Government view of the balance between airport revenues an reciprocal traffic rights, namely that the increase of revenues should take precedence. I do not think this point needs to be argued but Mr Downing's response has drawn my attention to paragraph 2(a) of Milton's letter of 6 January (which I had not previously seen). While I would not quarrel with the basic coni. of that sub-paragraph, I think that the way it has been present could perhaps have been guaranteed to draw exactly that response which we now see from Hong Kong. To be precise "the efforts the! Ministers of successive Governments have made" have not been air at preserving "the value of Hong Kong as a traffic point" as e11

aim in itself. It is quite simply that we have always been ver well aware of the value of Hong Kong as a traffic point and hav wording

only been willing to give rights at Hong Kong to other countri had been when:

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There was a demonstrable need for such services (or extra capacity on existing services) as that other country's airline would offer;

The grant of such valuable rights was necessary to obtain (or retain) valuable rights for British operators, including CPA.

SECRET