TNAG-2411-FCO40-3506-Proposed-airport-in-Macao-(Macau)-1992 — Page 8

Mr Roger Watts

AEF 2

HM Treasury

Room 81/1

Parliament Street

I hope,

MACAO AIRPORT

HKA 182/4

Foreign & Commonwealth

Office

15

London SWIA 2AH

Telephone: 071-270 2673 Facsimile: 071-270 3443

19 August 1992

рагоря

1.

Please refer to Norman Lambert's letter to you of 17 August about bank guarantees for Macao Airport in which he said we might be commenting.

2.

Our concerns were set out in our telegram number 1236 to Hong Kong. Their telegram 2136 in reply agreed with our approach

We think the format both copied to Paul McIntyre. we suggested meets ECGD's concern for security, and safeguards our and Hong Kong's position.

Jus

B

www

David Seddon

Economic Relations Department

CC:

Mr T Downing BOE/IFD

Mr P Casey DTI/PEP

Mr P Rose ODA/CCAD

Mr M Faulkner MOD/IFA DESO

Mr Lambert ECGD/PD3 Mr Furness, HKD

8-711

dti

the department for Enterprise

Overseas Trade Services

Mr S Wood

HM Treasury

Parliament Street

London SW1P 3AG

HKA 182/4

14

20/8

May

Department of

Trade and Industry

Ashdown House

123 Victoria Street London SW1E 6RB

Enquiries 071-215 5000

Telex: 8813148DIHQ G

Fax: 071-828 3258

Direct line

Our ret 071-215 6284

Your ret

Date

18 August 1992

Dear Stephen

I have seen Norman Lambert's letter to you of 17 August, which requests comments on the Macau airport project.

This contract, while relatively small in cash value terms would be very important in securing influence and a reference project in civil aviation in the Hong Kong/China region. This is, of course, a region where air traffic is growing rapidly, leading to a need for increased airport capacity. It is hoped that if this project could be secured, it would lead to further ATC and other civil aviation navigational and communications equipment contracts in Hong Kong, Malaysia, Thailand, mainland China, Korea and Indonesia. If we were to lose out to the French on this initial contract, our credibility and future propects would suffer and the French influence would increase dramatically.

I note that ECGD have already opted for the security outlined in your para 2(a) and the Chairman of their Advisory Council has endorsed this view. The only remaining problem would, therefore, seem to be whether it is acceptable in political terms to seek a guarantee from the Bank of China for the period after 1999.

I think we should not confuse too much the attitude of the UK While there are to Macau post 1999 with Hong Kong post 1997. undoubted parallels, the economy of Macau in no way compares with that of Hong Kong. It would stretch credulity for the Chinese to read into our concern over the repayments on a contract in the Macau a lack of faith in their future attitude towards Hong Kong. Furthermore, the French have already been offered a Bank of China guarantee, and seem likely to accept it. We should therefore merely be seeking parity of treatment between the ECAS concerned with the project.