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FM HONG KONG
TO DESKBY 27130OZ FCO
TELNO 612
OF 271015Z FEBRUARY 91
INFO DESKBY 280100Z PEKING
INFO IMMEDIATE UKREP JLG HONG KONG
MIPT: PADS : THE WAY AHEAD : HONG KONG AGENDA
1. WE NEED A STATEMENT OF CHINESE SUPPORT FOR A NEW AIRPORT AT
CHEK LAP KOK. AGREE THAT AS MUCH AS POSSIBLE OF IT WILL BE BUILT
BEFORE 1997.
2. CHINESE PARTICIPATION. BANK OF CHINA TO PARTICIPATE IN THE ORGANISING OF LENDING. BAN ON CHINESE FIRMS' PARTICIPATION IN
PADS PROJECTS TO BE LIFTED.
3. HONG KONG GOVERNMENT TO BE IN EFFECTIVE CONTROL OF THE AIRPORT
PROJECTS IN ORDER TO ENSURE THE GOOD AND ECONOMIC MANAGEMENT.
4. RESERVES.
I) ASSUMING HKG REMAINS IN EFFECTIVE CONTROL OF THE AIRPORT PROJECTS AND RETAINS ITS EXISTING FINANCIAL POWERS EG NO CHINESE VETOES ON AA OR PRIVATE BORROWING, WE CONFIDENTLY EXPECT THE TOTAL OF THE FISCAL RESERVES AND LAND FUND BETWEEN NOW AND 1997 NOT TO FALL BELOW HKD 75 BILLION AT MONEY OF THE DAY PRICES, IE, AT LEAST 10 PER CENT MORE IN REAL TERMS THAN AT END OF 1984/85. IF IT SEEMS LIKELY THAT THE TOTAL OF THE RESERVES WILL DROP BELOW THIS FIGURE, THE HONG KONG GOVERNMENT WILL CONSULT WITH THE CHINESE GOVERNMENT.
II) IN 1997 WE FORECAST THAT THE SARG WILL HAVE FISCAL RESERVES (IE HKG'S FISCAL RESERVES AND LAND FUND) OF BETWEEN HKD 102 BILLION (FOR OPTION 2) AND HKD 120 BILLION (FOR OPTION 4). THIS WOULD BE BETWEEN 49 PER CENT AND 75 PER CENT GREATER IN REAL TERMS THAN AT END OF 1984/85. SINCE A MAJOR NEW AIRPORT WHICH WILL SERVE HONG KONG FOR GENERATIONS WILL HAVE BEEN LARGELY COMPLETED, THIS WILL BE A VERY SATISFACTORY SITUATION.
III) BETWEEN 1997 AND 2006, WHEN BENEFITS FROM THE AIRPORT PROGRAMME WILL BEGIN TO ACCRUE TO THE SARG, AND THE SARG BENEFITS
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