TNAG-0944-FCO40-1163-Future-of-Hong-Kong-1980 — Page 55

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want to follow this with another lease to a non-Chinese organisation.

This would obviously be more attractive to investors.

PERIODIC LEASES

4. One method of avoiding naming any specific date might be to

issue periodic leases for one year which would be automatically

rolled forward annually and have no termination date unless the land

in question were required for 'public purposes'. This has political

and legal attractions although investors may find such leases less

useful than long-term fixed leases.

FIXED TERM LEASES

5. The alternative would be a fixed-term lease running beyond 1997,

say for 25 years. Under British law there would need to be a legal

basis for this to meet a challenge eg by a sub-lessee. The alter-

natives would be to wait until such a challenge occurred and then

legislate by Order in Council, or to pass legislation now. Such

legislation would be very simple and would not need to refer to

continuing British administration.

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