**
(D) WHILE THEREFORRE AN AIRPORT IN CHINA MIGHT MEET HK'S NEEDS IN
TERMS OF AIR TRANSPORT (LEAVING ASIDE THE POSSIBILITY OF DISRUPTION BY POLITICAL OR OTHER DISORDER) AND THERE WOULD BE NO DIFFICULTY IN SECURING TRAFFIC RIGHTS FOR UK AND HK AIRLINES THERE, OUR PRESENT INTERNATIONAAL BARGAINING POSITION BASED ON LANDING RIGHTS FOR OTHER AIRLINES IN HONG KONG WOULD 60. THIS WOULD BE SERIOUS FOR BA BUT DISASTROUS FOR CPA, CPA WOULD HAVE TO DEPEND ON WHAT SUPPORT CPG WAS PREPARED TO GIVE IT AND IN PRACTICE IT WOULD HAVE
TO BECOME ANOTHER CHINESE AIRLINE:
(E) THE ONLY POSSIBLE SITE CLOSE TO THE BORDER WOULD INVOLVE
FLYING OVER FAIRLY HEAVILY POPULATED AREAS OF HONG KONG
AND CHINA AND SO WOULD PROBABLY NOT BE SUITABLE FOR USE
24 HOURS A DAY (THOUGH HOW MUCH WEIGHT THE CPG WOULD ATTACH TO THE PROBLEM OF NOISE IS DEBATABLE). THERE WOULD ALSO BE OBSTRUCTIONS THAT COULD REDUCE THE CAPACITY OF THE AIRPORT, THE BEST SITE FROM THE POINT OF VIEW OF FREEDOM FROM ENVIRONMENTAL CONSTRAINTS SEEMS TO BE SOME 25 MILES NORTH OF THE BORDER CLOSE TO THE PEARL RIVER ESTUARY. BUT IT WOULD NOT BE PRACTICABLE IN TERMS OF ITS DISTANCE FROM URBAN HONG KONG. EVEN FOR THE SITES CLOSER TO THE BORDER, ACCESS WOULD BE A PROBLEM. THE DISTANCE WOULD BE GREATER THAN TO CHEK LAP KOK: AND TO BUILD ADEQUATE HIGHWAYS WOULD BE COSTLY. HOWEVER, WITHOUT A PROPER SURVEY IT IS DIFFICULT TO BE SPECIFIC ABOUT HOW GREAT THE PROBLEMS CONNECTED WITH SITES IN CHINA WOULD BE:
(F) IT IS MOST UNLIKELY THAT AGREEMENT COULD BE REACHED WITH
CHINA AND AN AIRPORT CONSTRUCTED IN ANYTHING LIKE THE TIME IT WOULD TAKE TO BUILD AN AIRPORT AT CHEK LAP KOKI (G) THE POLITICAL ARGUMENT FOR AN AIRPORT IN CHINA IS DUBIOUS
UNLESS THERE IS A SURRENDER OF SOVEREIGNTY TO HMG FOR A PERIOD BEYOND 1997, A REMOTE POSSIBILITY (SEE (C) ABOVE). FOR HONG KONG, EVEN THE GOVERNMENT OF HONG KONG, SIMPLY TO SECURE A LEASE OF LAND IN CHINA FOR USE AS AN AIRPORT EXTENDING BEYOND 1997 WOULD DO LITTLE TO GUARANTEE. THE FUTURE OF HONG KONG ITSELF, MUCH GREATER CONFIDENCE WOULD DERIVE FROM THE ARRANGEMENTS NECESSARY FOR AN AIRPORT SITED IN HONG KONG TO BE VIABLE (PARAGRAPH 7 ABOVE). THOUGH
A MAJOR JOINT PROJECT COULD MAKE FOR CONFIDENCE, THE FIELD OF AIR TRANSPORT IS A PARTICULARLY DIFFICULT ONE IN WHICH TO REACH AGREEMENT. THERE IS A DANGER THAT FAILURE TO REACH AGREEMENT WITH CHINA WOULD BE EXTREMELY DAMAGING TO CONFIDENCE: OR THAT TO AVOID SUCH FAILURE IT WOULD BE NECESSARY TO MAKE THE FAR REACHING CONCESSIONS REFERRED TO IN (C) AND (D) ABOVE,
(H) UNLESS COMPLETELY SATISFIED AS TO THE FINANCIAL SECURITY
NONE OF THE COMPANIES PROVIDING SERVICES AT KAI TAK WOULD BE PREPARED TO INVEST IN NEW FACILITIES IN CHINA (NOR IN CHEK LAP KOK EITHER).
CONFI
CONFIDENTIAL
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