TNAG-2145-FCO40-3064-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 189

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SUMMARY RECORD OF MEETING BETWEEN FCO AND DTI OFFICIALS,

12 OCTOBER

HKC 182/2

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Mr Extness

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Those present

Mr Andrew Burns, AUS

Mr Alan Paul, HKD

2 ONOV1990

Mr Christian Adams, PEP, DTI

Mr Richard Rogers, PEP, DTI

Ms Rosalind Marsden, HKD

Mr David Love, OT2, DTI

Mr John Morris, HKD

1. The following were the main points which arose in

discussion:

Airport

2. Mr Burns said that British companies would not succeed in getting contracts for PADS unless they could match the credit terms offered by others. The Treasury had agreed that ECGD could make an indicative offer of terms to meet

Schroders' deadline. But the Treasury were still insisting that a positive response from the Chinese Government should be an essential prerequisite of ECGD assuming the project

risk.

3

Mr Adams said that, as the Treasury had also pointed

out, the problem was that all UK banks took the view that

Hong Kong and China should be treated as a single risk after

1997. Japanese banks were also reluctant to provide finance for the airport without a Chinese Government guarantee. wondered whether this issue should be raised in the JLG.

4.

He

Mr Paul said that the inheritance by the SARG of the HKG's financial obligations had already been discussed at JLG XVI. But the JLG was not the right forum for detailed discussions on PADS. The meeting with Chinese experts in Hong Kong offered the best hope of convincing the Chinese of

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CONFIDENTIAL