TNAG-2266-FCO40-3263-Richard-Allen--Chief-Executive-of-the-Hong-Kong-Provisional--1991 — Page 18

NOTE FOR THE FILE

HEB 182/10

CALL BY MR RICHARD ALLEN,

CHIEF EXECUTIVE, PROVISIONAL

AIRPORT AUTHORITY AT FCO ON 17 SEPTEMBER 1991

Mr Allen subsequently called on Mr Burns (AUSS) and

Mr Peter Ricketts (Hd/HKD). Mr Allen covered much of the

same ground as he had done with Lord Caithness but with the following additional points.

It was

Regarding possible sources of financing, Mr Allen said that

European Banks were in the strongest position (US banks were in disarray). The banks favoured the Airport Authority starting to negotiate on debt now rather that by the end of 1993 as planned. That was not possible because the Airport Authority business plan had yet to be finalised. important to get influential players ie EXIM, ADB, World Bank involved, but given the size of the project the real need was for political support. Continuing assurances that Britain and China were solidly behind the project. This would be worth emphasing in all joint communiques from eg Ministerial meetings. There was some concern that Hong Kong would not be able to raise the capital needed. The MTR needed to borrow large sums to finance the new line and to reschedule its debts beyond 1997.

Mr Allen referred to the four major airport franchises (fuel, cargo, maintenance and catering). All required substantial investment and would take 3-4 years from date of agreement on the franchise until date of operation, especially cargo handling which required complicated

BUSALC/1

TG