TNAG-1741-FCO40-2457-Visits-by-Sir-David-Wilson--Governor-of-Hong-Kong--to-the-UK-1988 — Page 67

CONFIDENTIAL

ANNED

A.

1.

Governor's Visit to Shenzhen

3 March, 1988

Conversation with Yuan Geng

On the hovercraft to Shekou, Yuan Geng raised a number

of points with the Governor. First, he referred to China

Merchants' plans for their Tsing Yi site. He had written a letter to the Secretary for Lands and Works. The Governor said that Mr Barnes would reply after his return from abroad.

2.

Secondly, Yuan brought up the Terminal Seven tender. He clearly recognized that he had lost the bid, and that the Government's decision had to be made on economic grounds. He

commented, however, that HIT would have to pass on the costs of their very high bid to the shipping lines in the form of higher

handling charges.

3.

Thirdly, Yuan said that, while he did not wish to

criticize Hong Kong Government, he thought that too many coastal sites were going to residential development. This pushed up the prices of land for port development and related facilities. In this context, he expressed interest in the site

of the desalter (which is to be decommissioned).

4.

Finally, Yuan broached a proposal for a new deep water channel from the western end of Lantau to Castle Peak and

Shekou, to be dredged and operated by China Merchants, charging tolls to ships using the channel. The Governor noted the proposal with interest, but commented that he knew of no precedent for such an operation and wondered how in practice tolls could be collected (Secretary for Transport will minute

separately on the proposal).

CONFIDENTIAL