ZCZC
HMLNAN 1524 CONFIDENTIAL
PP OTTER
FM HKBTC TO OTTER
14084OZ APR
GRS 700
CONFIDENTIAL
FM BTC HONG KONG
TO PRIORITY DTI
TELNO OTTER 82
OF 14084OZ APRIL 87
FIRE!) +75/3@
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21/4
FOR WHEELER PEP
AND CRUICKSHANP OT2
PROPOSED ROAD/AIRPORT DEVELOPMENT
GORDON WU TOLD ME TODAY THAT HIS IS DUE TO SEE THE CHIEF SECRETARY
AND THE FINANCIAL SECRETARY AGAIN ON 16 APRIL. HIS IMPRESSION
AFTER THE LAST MEETING WITH THE HONG KONG GOVERNMENT COMMITTEE
WAS THAT THEY WERE TAKING THE PROJECT SERIOUSLY THOUGH THERE HAD
BEEN A HINT THAT THE AIRPORT ELEMENT MIGHT BE A LONG HAUL'`.
HOWEVER WU SAID HE WAS CONCERNED THAT THE HONG KONG GOVERNMENT
MIGHT NOW DECIDE TO COMMISSION A LENGHTY STUDY WHICH WOULD CASUE
THE WHOLE THING TO LOSE MOMENTUM. HE THOUGHT SUCH A DELAY WOULD
PLEASE OTHER BUSINESS INTERESTS WHO WERE ANXIOUS TO ELBOW HIM OUT
OF THE WAY. HE SHOWED ME A COPY OF THE MISDIRECTED JARDINE TELEX
(MY LETTER OF 3 APRIL TO BENJAMIN).
2. WU CITED AS AN EXAMPLE OF A HONG KONG GOVERNMENT STUDY A
PORT DEVELOPMENT STRATEGY THAT HAD TAKEN TWO YEARS TO PRODUCE.
IT HAD BEEN COMPLETED IN MAY 1986 AND WU HAD JUST SEEN A COPY.
INCIDENTALLY IT ESTIMATED A TOTAL THROUGHPUT FOR THE PORT OF 180M
TONNES BY THE YEAR 2001 WHICH WAS MUCH HIGHER THAN WU'S ESTIMATE.
TO THIS EXTENT THE STRATEGIC STUDY SUPPORTED THE NEED FOR A VERY
LARGE PROJECT. HOWEVER ALL THREE OF THE OPTIONS SUGGESTED IN THE
GOVERNMENT STUDY (BASED ON NEW CONTAINER TERMINALS AT STONECUTTERS
ISLAND) HAD BEEN QUERIED BY THE HYDRAULICS LABORATORY IN THE UK.
WU THOUGHT THIS WAS THE REASON THAT THE GOVERNMENT HAD NOW APPOINTED
PINNIES TO MAKE A NEW. STUDY OF VICTORIA HARBOUR.
3. WU SUGGESTED THAT THE LONGER THE HONG KONG GOVERNMENT TOOK TO
THINK ABOUT HIS PROJECT THE LESS CHANCE THERE WOULD BE OF SIGNIFICANT BRITISH INVOLVEMENT. HE REASONED THAT NEARER TO 1997
THE CHINESE AUTHORITIES WOULD WANT A GREATER INVOLVEMENT BY CHINESE CONTRACTORS. ALSO AS TIME WENT BY, THE LOCAL DEVELOPERS
AND THE BANKERS MIGHT NOT BE SO KEEN. THERE WOULD BE LESS CHANCE THAT HE COULD NEGOTIATE THE WORK WITH A BRITISH CONSORTIUM OF CONTRACTORS, SUPPLIERS AND SPECIALIST CONSULTANTS. HE WOULD PREFER THE UK-NEGOTIATED PATH (WITH SOME INVOLVEMENT FROM WITHIN HONG
KONG AND A FEW CHINESE CONTRACTORS) BUT THIS WOULD BECOME LESS OF A PRACTICAL PROPOSITION THE LONGER IT TOOK FOR THE HONG KONG
GOVERNMENT TO REACH A DECISION.
4. WU AND ELLIOTT (WHO WAS ALSO PRESENT ) SAID THAT FOR THE
MOMENT THEY WOULD BE PLEASED TO HAVE THE NAMES OF ANY COMPANIES
WHO MIGHT BE INTERESTED IN FORMING A BRITISH CONSORTIUM.
THE COMPANIES WOULD NOT BE REQUIRED TO PUT UP EQUITY BUT THEY
WOULD HAVE TO BE WILLING TO SIGN PERFORMANCE GUARANTEE BONDS.
THERE WOULD BE A NEED FOR CONTRACTORS, SPECIALIST CONSULTANTS AND SUPPLIERS (AIRPORT EQUIPMENT, COMMUNICATIONS, CRANES, SOFTWARE ETC). THE PROJECT MANAGERS WOULD BE HOPEWELL/COSTAIN.
5. I HAVE INVITED WU TO THE UK TO ATTEND THE POWER PLANT
EXHIBITION FROM 22 JUNE. HE BELIEVES HE WILL BE ALE TO ACCEPT.
THERE WOULD BE AN OPPORTUNITY DURING THAT WEEK FOR HIM TO TALK
TO THE DEPARTMENT AGAIN ABOUT THE PROJECT. ELLIOTT IS READY TO
VISIT LONDON AT ANY TIME.
6. COMMENT: WU WAS SUGGESTING VERY CLEARLY THAT THE UK GOVERNMENT
SHOULD APPLY SOME PRESSURE. I THINK HIS MAIN CONCERN IS THAT THE
LONGER THE HONG KONG GOVERNMENT TAKE TO CONSIDER THE PROJECT THE
MORE TIME IT WILL GIVE OTHER BUSINESS INTERESTS TO PUT FORWARD
SLIGHTLY DIFFERENT PROPOSALS AND PERHAPS TO EASE HIM OUT OF THE PICTURE. HIS CONCERN MAY BE JUSTIFIED. I WILL TALKS TO THE FINANCIAL SECRETARY ABOUT THE GOVERNMENT'S PRESENT VIEW.
HOLLOWAY
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HMUNAN 1524
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