TNAG-1175-FCO40-1477-Proposed-replacement-airport-for-Hong-Kong-at-Deep-Bay-or-Ch-1982 — Page 100

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Reference

Our attitude towards the possibility of a negotiated contract has always been that it would be necessary to convince the Hong Kong Government that a negotiated contract was in their interest, and that it was in their interest to negotiate with us, and not, say, the Japanese. The first point. is relatively simple. A negotiated contract would save about a year in building time, which would bring in its train attendant financial advantages, probably the most important of which is the early release of land at Kai Tak.

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5 The second is more difficult but, if worries about finance are uppermost in the mind of the long Kong Government, this could be to our advantage if we are prepared to play, and need not necessarily be expensive in terms of qubsidies. ECGD seem relatively relaxed about cover for the project, provided EGC or Ministers are prepared to see cover extended beyond 1997. I find it inconceivable in the context of HMG's general policy towards Hong Kong that we should insist on repayment terms to be completed by 1997. No other country has the same imperative. Equally, the ingeniuity of the private financial sector in the UK is such, that if there is a solution to the problem of the Hong Kong Government raising the finance for construction, our firms ought to be able to find it. (Lazards who are working with the UK group have a number of ideas). The IIKG have, we understand, appointed Schroder Chartered to advise them on the financial

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Ideally, we would like to be in a position to say to the Hong Kong Government:

(a) a negotiated contract will save you time, and with the 1997 date on the horizon for the commercial financial markets, time represents both money and possibly the difference between the IIKG being able to develop the airport and not being able to;

(b) a UK Group led by Taylor Woodrow is very keen to develop the site as a complete turn-key package. They are also internationally renowned, competent contractors well capable of doing the job;

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