TNAG-2446-FCO40-3562-Political-parties-in-Hong-Kong-1992 — Page 18

UNCLASSIFIED

R

paras 12x13

pny / Pout Parkkis

053677

MDLIAN 3413

UNCLASSIFIED

FM HONG KONG

TO PRIORITY FCO

TELNO

2384

OF 230746Z SEPTEMBER 92

INFO ROUTINE HKGO LONDON, PEKING, UKREP JLG HONG KONG

INFO ROUTINE HKGO WASHINGTON, HKGO NEW YORK, HKGO SAN FRANCISCO INFO ROUTINE HKGO GENEVA, UKMIS GENEVA

HONG KONG FUTURE: PRESS COVERAGE AND SUMMARY

(12

J

23.9)

1. THE AIRPORT AND THE GOVERNOR'S VISIT TO LONDON WERE FEATURED.

.

AIRPORT

2.

THE PAPERS (15.9) GAVE GOOD COVERAGE TO A SEMINAR ON THE AIRPORT. REPORTS NOTED THE CHINESE TEAM MEMBER OF THE AIRPORT COMMITTEE, HU HOU CHENG, SAID THAT THE EXISTING FINANCIAL ARRANGEMENTS WERE INCONSISTENT WITH THE MOU. THE SECRETARY FOR TREASURY, KY YEUNG, SAID AT THE SAME SEMINAR THAT HKG WAS CONSIDERING CHINA'S SUGGESTION TO INCREASE GOVERNMENT INJECTION AND WOULD GIVE A RESPONSE AT THE NEXT AC MEETING. HE SAID IT WAS NOT NECESSARY TO PUT A CAP ON THE COSTS OF THE CORE PROGRAMMES AS NOT ALL CONTRACTS HAD BEEN LET AND ABOUT A THIRD OF THEM WOULD NOT BE FIXED-PRICE CONTRACTS, AND THERE WAS ALREADY A LEGISLATIVE MECHANISM IN PLACE TO CONTROL COSTS.

3. THE AC MEETING RECEIVED GOOD COVERAGE (17.9). IT WAS NOTED THE BRITISH SIDE HAD PRESENTED A PROPOSAL. IT WAS UNDERSTOOD THAT WHILE THE BRITISH SIDE HAD AGREED TO INCREASE ITS CAPITAL INJECTION, IT ALSO CALLED ON THE CHINESE SIDE TO HELP FUND THE PROJECT WITH SAR GOVERNMENT'S SHARE OF LAND PREMIUMS. CHINESE TEAM LEADER, GUO FENGMIN, SAID AFTER THE MEETING THAT THE CHINESE SIDE WOULD STUDY THE BRITISH PROPOSAL CAREFULLY.

4. DETAILS OF THE BRITISH PROPOSAL WERE DISCLOSED AT A PRESS CONFERENCE BY THE SECRETARY FOR TREASURY, KY YEUNG. IT WAS SUGGESTED THE 40 BILLION LAND PREMIUMS GENERATED BY THE SALE OF 65 HECTARES AROUND THE RAILWAY SHOULD BE REINVESTED IN THE AIRPORT AUTHORITY AND THE MTRC. THIS WOULD ENABLE A SUBSTANTIAL REDUCTION IN THE AMOUNT OF BORROWING REQUIRED AND ELIMINATE THE NEED FOR 21 BILLION TO BE SET ASIDE FOR THE TWO CORPORATIONS TO DRAW ON LATER IF NECESSARY. THE PROPOSAL WAS MADE IN RESPONSE TO CHINESE CONCERN THAT THE FUTURE SAR GOVERNMENT WOULD BE LEFT WITH

1

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