TNAG-2142-FCO40-3061-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 85

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046726 MDLIAN 7354

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FM HONG KONG

TO ROUTINE FCO

TELNO 1406

OF 301045Z APRIL 90

AND TO ROUTINE PEKING

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PADS: BRIEFING FOR NCNA

15 MAY 1990

1. FINANCIAL SECRETARY SAW PAN ZENGXI, NCNA VICE DIRECTOR, ON 27 APRIL TO GIVE A FURTHER BRIEFING ON THE PORT AND AIRPORT DEVELOPMENT STRATEGY. PAN WAS ACCOMPANIED BY COLLEAGUES FROM NCNA RESEARCH AND FOREIGN AFFAIRS DEPARTMENTS.

2. SIR PIERS JACOBS HANDED OVER COPIES OF ALL EIGHT FEASIBILITY STUDIES TO WHICH WE HAD MADE REFERENCE IN EARLIER BRIEFINGS OF THE CHINESE. BEFORE DOING SO, HE GAVE A BRIEF INTRODUCTION TO EACH OF THE CONSULTANCIES AND STRESSED THAT THEY DEMONSTRATED HOW MUCH DETAILED AND CAREFUL CONSIDERATION HAD TAKEN PLACE OVER MANY YEARS. HE NOTED HOWEVER THAT THE SPECIFIC COSTINGS WERE FAIRLY BROAD ESTIMATES, AND THAT AS THE SITUATION EVOLVED REVISIONS WOULD BE NECESSARY. IN CONCLUSION HE EXPRESSED THE HOPE THAT, HAVING STUDIED THE FACTS, THE CHINESE WOULD BE ABLE TO MAKE CLEAR THEIR SUPPORT FOR THESE LONG-TERM PROJECTS WHICH WERE DESIGNED TO BUILD UP A SECURE ECONOMIC FOUNDATION FOR THE FUTURE SAR.

3. PAN THANKED THE FS FOR THE BRIEFING AND DOCUMENTATION. HE SAID THAT THE CHINESE SIDE ACCEPTED THE ESTIMATES ON KAI TAK AND AGREED THAT IT SEEMED LIKELY TO REACH CAPACITY BY 1994, EVEN WITH THE WORK WE WERE DOING TO EXPAND THAT AIRPORT. THEY AGREED THAT A NEW AIRPORT WAS NECESSARY. THEIR CONCERN WAS OVER THE SHEER SCALE OF THE WHOLE PROJECT, AND THE QUESTION OF WHETHER IT MIGHT IMPOSE A FINANCIAL BURDEN ON THE FUTURE SARG.

4. IN REPLY, SIR PIERS JACOBS SAID THAT WE WERE CONFIDENT IN HONG KONG'S FUTURE AND EXPECTED IT TO CONTAIN DEVELOPING. ON THAT BASIS WE WERE ABSOLUTELY SURE THAT SOMETHING THE SIZE OF THE PLANNED PROJECT WAS REALLY GOING TO BE NEEDED. AS TO THE QUESTION OF FINANCE, WE HAD DONE OUR CALCULATIONS VERY CAREFULLY CHE POINTED IN PARTICULAR T THE FINS CONSULTANCY). HE SUGGESTED THAT AS A COMPARISON THE CHINESE MIGHT STUDY THE MASS TRANSIT RAILWAY WHICH WA A STATUTORY BODY SIMILAR TO THE PLANNED AIRPORT AUTHORITY. IT HAD AN EXCELLENT INTERNATIONAL REPUTATION AS A GOOD BORROWER. WE

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