RUNWAYS WOULD BE ABOUT £620 MILLION (1979 PRICES). ALL THE REQUIREMENTS LISTED IN PARAGRAPH 4 WOULD BE MET. THE DIFFICULT ONE WOULD BE (C). TO PROVIDE ACCESS TO CENTRAL HONG KONG WOULD INVOLVE BUILDING THREE BRIDGES AND AN ACCESS ROAD FROM THE MAINLAND TO LANTAO ISLAND AT A COST OF £286 MILLION (1979 PRICES) WHICH, AS IT WOULD PERMIT SUBSTANTIAL DEVELOPMENT OF NORTH LANTAO, WOULD BY NO MEANS BE WHOLLY A CHARGE TO THE AIRPORT.
6. THE APPROACH TO AN AIRPORT AT CHEK LAP KOK FROM THE WEST WOULD INVOLVE FLYING OVER CHINESE WATERS UP TO WITHIN ABOUT 3,580 METRES OF THE RUNWAY. SO BEFORE THE HKG CAN TAKE ANY DECISION TO PROCEED WITH THE PROJECT, IT WILL NEED TO BE SURE THAT THE CHINESE GOVERNMENT WOULD HAVE NO OBJECTIONS.
7. THE CHINESE GOVERNMENT'S CONCURRENCE IN THE PROJECT WOULD ALSO BE ESSENTIAL IN THE CONTEXT OF FINANCING THE REPLACEMENT AIRFORT. HKG DOES NOT YET HAVE SUFFICIENT DATA TO COME TO A CONCLUSION ON A FINANCING PLAN FOR THE PROJECT, BUT A BLEND OF GOVERNMENT CAPITAL AND LOANS RAISED ON THE INTERNATIONAL MARKET WILL CLEARLY BE NECESSARY. HOWEVER, IT IS UNLIKELY THAT LOAN FINANCE COULD BE RAISED BY THE HONG KONG GOVERNMENT IN THE ABSENCE OF SOME ASSURANCE ABOUT THE FUTURE OF HONG KONG
AFTER 1997.
8. IT WILL SHORTLY BE NECESSARY TO MAKE CHINA FORMALLY AWARE OF THE PROJECT. AS WELL AS THE NEED TO DEAL WITH THE QUESTION IN PARAGRAPH 6 CONCERNING THE OVER-FLYING OF CHINESE WATERS, IT WOULD BE NECESSARY TO INVOLVE THE CHINESE IN CERTAIN PLANNING MATTERS SUCH AS THE UTILISATION OF AIR SPACE AND POSSIBLE FACILITIES DEDICATED TO TRAFFIC BOUND FOR CHINA. AT THIS STAGE IT MIGHT BE FOSSIBLE TO SEE WHETHER CHINA WAS INTERESTED IN PARTICIPATING IN THE FINANCING OF THE PROJECT.
9. IT IS POSSIBLE THAT DISCUSSION OF THESE IMMEDIATE PRACTICAL AND TECHNICAL ISSUES MIGHT LEAD TO BETTER COMPREHENSION ON THE PART OF THE CHINESE OF THE FACTORS GOVERNING CONFIDENCE - IN THE COMPARATIVELY SHORT TERM IN HK. THIS IN TURN MIGHT EASE THE FINANCIAL PROBLEMS REFERRED TO IN PARAGRAPH 7.
THE POSSIBILITY OF SITING THE REPLACEMENT AIRPORT IN CHINA: 10. MEANWHILE, CERTAIN HONG KONG BUSINESSMEN VISITING CHINA HAVE SUGGESTED TO OFFICIALS OF THE CHINESE GOVERNMENT THAT THE AIRPORT BE SITED IN CHINA RATHER THAN HONG KONG. IN SPITE OF THE SERIOUS IMPLICATIONS OF SUCH A SUGGESTION, THEY HAVE MADE IT WITHOUT CONSULTATION WITH ANYONE IN THE HKG. THE OFFICIALS IN CHINA APPEAR TO HAVE TAKEN IT SERIOUSLY. THERE ARE INDICATIONS OF INTEREST BY PROVINCIAL OFFICIALS IN GUANGDONG AND VICE-PREMIER GU MU MENTIONED THE POSSIBILITY TO THE FINANCIAL SECRETARY DURING THE LATTER'S VISIT TO PEKING IN MAY 1980. WE ALSO KNOW THAT VICE-MINISTER CHEN SHAOZHONG OF THE 3RD MINISTRY
CONFIDENTIAL
2
/OF
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