TNAG-1457-FCO40-1981-Relations-between-Hong-Kong-and-China-1986 — Page 172

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CONFIDENTIAL

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for the Pearl River Delta Special Economic Zone.

It was learned that substantial improvement of other airports in this region is not feasible, e.g. the airport in Canton is not favoured due to environmental problem and land constraints. In the long term beyond 2005, they envisage that a second parallel offshore runway at 900 m spacing (suitable for independent MLS operation) will be required and are talking of traffic volume of 40 million passengers per annum (equitable to Chicago O'Hare in 1983)!

(a) The estimated cost of initial development is US$100 million and from financial studies it is understood that the airport itself cannot repay its capital cost in 10 years, so that the project would require some form of investment from the government. It is understood that one of the main features of the proposed Shenzhen airport study is to allow foreign investment.

(e)

The American representatives privately indicated that they are not sure whether the Chinese will take over the entire implementation programme themselves after the feasibility study stage.

EDD estimate that, on the basis of information provided to them, the engineering work at Huang Tian will be less problematic than work at Chek Lap Kok.

CONFIDENTIA