TNAG-2254-FCO40-3238-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-gene-1991 — Page 26

CONFIDENTIAL

014715

MDHIAN 2461

NORTH EAST LANTAU. SUPPORTING TRANSPORT INFRASTRUCTURE WOULD BE BUILT TO CONNECT THE PORT AND AIRPORT ON LANTAU WITH THE URBAN AREAS OF HONG KONG AND KOWLOON INCLUDING TWO MAJOR BRIDGES CONNECTING LANTAU TO KOWLOON VIA MA WAN AND TSING YI ISLANDS, TOGETHER WITH ROAD AND RAIL LINKS ALONG NEW RECLAMATIONS IN BOTH WEST KOWLOON AND HONG KONG ISLAND. THE ESTIMATED COST FOR THE (NEXT WORD UNDERLINED) TOTAL PROJECT (40 PERCENT OF WHICH WAS FOR THE PORT PROJECT) WAS ABOUT HKD127 BILLION (GBP8.6 BILLION) AT 1989 PRICES FOR THE PERIOD UP TO 2006.

7. RECENT AIR TRAFFIC FORECASTS INDICATING THAT KAI TAK WOULD REACH CAPACITY BY 1994, EVEN WITH ALL ONGOING IMPROVEMENTS COMPLETED, HAVE REINFORCED THE URGENCY OF THE NEED TO OPEN THE NEW AIRPORT AS EARLY AS POSSIBLE. THE HONG KONG GOVERNMENT HAVE DEVELOPED A PROGRAMME OF WORK IDENTIFYING THOSE PROJECTS WHICH ARE ESSENTIAL TO THE OPENING OF THE NEW AIRPORT BY 1997. THIS PROGRAMME WAS SET OUT IN A BRIEFING PAPER PASSED TO THE LEGISLATIVE COUNCIL IN DECEMBER OF 1990. THE PAPER ALSO SETS OUT THE HONG KONG GOVERNMENT'S CURRENT FINANCIAL POSITION IN ORDER TO ILLUSTRATE THE CONFIDENCE IT HAS IN ITS ABILITY TO FUND THE PROGRAMME. A COPY OF THE PAPER IS AT ANNEX A.

DISCUSSIONS WITH THE CHINESE

8. WE AND THE HONG KONG GOVERNMENT HAVE SOUGHT TO ENCOURAGE THE CHINESE GOVERNMENT TO SUPPORT THE PROJECT. DURING MR MAUDE'S VISIT TO PEKING IN JULY 1990 THE CHINESE PRIME MINISTER, MR LI PENG, ACKNOWLEDGED THAT HONG KONG NEEDED A NEW AIRPORT BUT MADE IT CLEAR THAT THE CHINESE GOVERNMENT COULD NOT GIVE A SUBSTANTIVE VIEW UNTIL THEIR OWN EXPERTS HAS ASSESSED THE FEASIBILITY OF THE PROJECT.

9. A TEAM OF CHINESE EXPERTS VISITED HONG KONG IN OCTOBER 1989 FOR DISCUSSIONS, IN PARTICULAR ON THE FINANCIAL AND TECHNICAL ASPECTS OF THE PROJECT. A FURTHER ROUND OF TALKS WAS HELD IN PEKING IN EARLY JANUARY.

10. THE GOVERNOR OF HONGKONG VISITED PEKING ON 21-23 JANUARY. HE HAD USEFUL DISCUSSIONS WITH CHINESE LEADERS. THE CHINESE REITERATED THAT HONG KONG NEEDED A NEW AIRPORT, BUT MADE IT CLEAR THAT FURTHER EXPERT TALKS WOULD BE NEEDED BEFORE THEY DETERMINED THEIR ATTITUDE TOWARDS IT. ONE MAJOR CONCERN OF THE CHINESE HAS BEEN THE PROJECTED AMOUNT OF THE HONG KONG GOVERNMENT'S RESERVES ON 1 JULY 1997. A FURTHER ROUND OF TALKS WILL BE HELD IN LATE FEBRUARY.

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