TNAG-2408-FCO40-3502-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-Brit-1992 — Page 138

HONG KONG AIRPORT

Points to make

CONFIDENTIAL

Trafalgar House/Costains (in Anglo-Japanese Consortium)

look well-placed in competition for Lantau bridge contract.

Koreans cheaper but less experienced/reliable. Tough negotiating ahead.

-

Hong Kong Government now expect to decide on contract in early April and announce it on 14 April. We have reminded Governor of need to avoid pre-election leaks, particularly

if decision goes against Trafalgar House and leads to

criticism of HMG's inadequate support for British exporters.

(Cannot ask him to delay the decision itself: London-imposed

delay would become public, causing problems here, in

Hong Kong and with Peking).

ECGD's indication of cover for Trafalgar House has played

a vital role. Ministers may need to decide on ECGD

commitment for Lantau bridge and indication for Black Point

power-station during election campaign or immediately

afterwards.

I hilly has minuted

- Chinese may make difficulties about cost over-run on

airport railway, but we can put Qian Qichen right on this on

9 March.

on this,

- US Eximbank muttering about need for firm PRC guarantees

for Hong Kong contracts etc straddling 1997. Unrealistic

(HMG will not give guarantees before 1997) and undesirable

(extra leverage for Peking; damage to HK autonomy). We hope

to get Eximbank to see sense, by spelling out provisions of Joint Declaration, Basic Law and Airport MOU. ECGD playing helpful role. But we shall follow closely, in liaison with

Treasury and Bank of England.

NC2ABR/2

CONFIDENTIAL