TNAG-1172-FCO40-1453-Future-of-Hong-Kong-1982 — Page 143

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Mr Evans

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X AND Y

Seen byter Auf

Mutagen

TRONG KONG NEW AIRPORT

CC

ir Caines Hr Benjamin Hr Stevens Tr March Mr Muir Mr Clift

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CAIR BT Hong Kong OT4

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Mr Caines met Mr Brenridge, Financial Secretary Hong Zong and Sir Jack Cater (Hong Kong office in London) this morning. Mr Benjamin and I were present. The principal subject of discussion was the now airport. Mr Brenridge said that the new airport was one (or possibly two) of about five of six major developments that were being talked about in Hong Kong at present, and, in his view, Hong Kong should only proceed with say three or four of them and they had yet to determine their priorities. Apart from other considerations, it raised difficult questions on the development of the

territory. Mr Bremridge made it clear that the airport was not a pressing priority as far as he was concerned and he said that his own view was that the Hong Kong Govenrment would need a lead on the future of long Kong before it committed itself to this investment. It would be extremely damaging to confidence in Hong Fong if it attempted to raise the finance for the development and failed to do so. He did not think that the decision to proceed would be. taken before 1984 for that reason. He said that he had already received approaches from developers with ingenious financial solutions and that the Hong Kong Government had appointed Schroder and Chartered to advise them on the financial issues.

created

He said that he wanted to see an Authority to be responsible for the airport developments in the same way as the MTRC had been responsible for the development of the Mass Transit system. Steps had not yet been taken to set this up. On the subject of a negotiated contract, Ir Cainen ran over the points in my minute, stressing that we entirely accepted that the advantage of a negotiated contract and the advantage of negotiating with the UK would hav to be very apparent before there was any chance of success. Mr Breinridge in return frequently mentioned the need for a satisfactory settlement ander the Multifibre Agreement. also said that PRC contractors were interested in the construction of the airport and would certainly need to be involved, though the Hong Kong Government would negotiate with the PRC on this. (This of course fits in with our contractors' approach to the project). Another mainland China complication could arise over air traffic.rights, particularly with the post 1997 situation in mind where the PRC might claim the traffic rights for themselves. This would certainly be a feature, in Mr Brenridge'a view, of any discussion: about the long term future of Hong Yong, but it could also get dragged into the question of the development of the airport itself. Je will need to keep in touch with Mr Stevens CAIR over this, should it arise, abd

CONFIDENTIAL