TNAG-0768-FCO40-972-Supplies-of-electrical-power-for-Hong-Kong-Castle-Peak-power-1978 — Page 104

C.S. 166

CONFIDENTIAL # 3

XCC(77)58

Copy No Page 10 of 11

of 40

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The argument in favour of Definition A is that it repre- sents a cautious approach to a large project. The objection to it is that in comparison to the Company's huge investment in the future of Hong Kong it may appear sluggish and lacking in confidence. The construction by the Company of two tunnels will cause the public to ask why the Government did not choose to develop them for road access. The technical reason will seem weak, unless coupled with a pretty clear statement of intent to build alternative road access. Indeed, in the absence of such a statement there could be doubts as to whether the Government had changed its mind, and was not prepared to proceed until the future of Hong Kong could be seen more clearly.

19

The argument against Definition B is that it is to some extent a jump in the dark, though a small jump in comparison to that of the Company. And see also paragraph 14 above. The arguments in favour are that it would represent a welcome show of confidence by the Government, and would promise the early development of a large amount of land for industry and for low density housing, while providing an option on the further development of both the tourist industry of South Lantau and the considerable remaining land potential of the North, in- cluding an option on the construction of an airport if this proved necessary.

20

While the Company itself would probably, though not absolutely certainly, accept the site and consequent investment on the basis of Definition A, it would certainly do so on the basis of Definition B. It is suggested that Honourable Members should therefore decide principally on the basis of the wider issues set out above.⠀

Public relations and publicity

21

The China Light and Power Company Limited has already sought permission to investigate the engineering problems of construc- tion of a power station on Lantau. This will involve site investigations, which will require at least a local explanation. This should at this stage be that the Company is investigating the possibility of locating a power station on this site without commitment. A more formal announcement should await this Council's decision, on development investigations on Lantau, as this would enable the Government's intentions regarding the investigation of access to and development of the island to be spelt out in more detail, and will maximise the effect of the Company's express- ion of confidence in the future.

CONFIDENTIAL

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