CONFIDENTIAL
107326
MDHOAN 1860
ANNOUNCING PROPOSALS IN HIS LEGCO SPEECH.
9.
THE GOVERNOR'S DISCUSSIONS IN PEKING WILL ALSO COVER THE HONG KONG AIRPORT. WE AND THE CHINESE SIDE ARE AGREED THAT HONG KONG NEEDS A NEW AIRPORT. THE CHINESE FOREIGN MINISTER CONFIRMED THIS AGAIN TO ME IN NEW YORK LAST MONTH. THE CHINESE HAVE BEEN DRAGGING THEIR FEET ON THE FINANCING ARRANGEMENTS. WE HAVE NOW PUT TO THEM A REVISED PROPOSAL BASED ON SOME SUGGESTIONS THEY MADE. THIS WOULD HAVE THE EFFECT OF PLOUGHING BACK INTO THE PROJECT REVENUE FROM LAND SALES ASSOCIATED WITH THE NEW AIRPORT RAILWAY. IT WOULD THEREFORE CUT BORROWING AND REDUCE THE OVERALL COST OF THE PROJECT. THE CHINESE HAVE NOT YET RESPONDED OFFICIALLY TO THESE NEW PROPOSALS, ALTHOUGH THERE HAVE BEEN SOME RUMBLINGS IN THE PRESS. IF THE FINANCIAL ISSUES CAN BE TACKLED ON THEIR MERITS, I AM CONFIDENT THAT AGREEMENT COULD BE REACHED QUICKLY. IT SHOULD BE CLEAR FROM THE GOVERNOR'S VISIT TO PEKING WHETHER THIS WILL BE POSSIBLE.
10.
I AM GRATEFUL FOR YOUR CONTINUING SUPPORT FOR OUR POLICY ON HONG KONG, AND LOOK FORWARD TO KEEPING IN TOUCH WITH YOU ON THE SUBJECT. ENDS.
11.
WASHINGTON, OTTAWA AND CANBERRA SHOULD SUBSTITUTE THE FOLLOWING INTRODUCTORY PARAGRAPH:
BEGINS: OUR NEW GOVERNOR OF HONG KONG, CHRIS PATTEN, WILL BE MAKING HIS FIRST MAJOR POLICY SPEECH TO HONG KONG'S LEGISLATIVE COUNCIL ON 7 OCTOBER. HE WILL HAVE SOME IMPORTANT PROPOSALS TO ANNOUNCE ON HONG KONG'S CONSTITUTIONAL DEVELOPMENT UP TO 1997. I WANTED TO LET YOU HAVE IN CONFIDENCE AN ADVANCE ACCOUNT OF WHAT HE WILL BE PROPOSING AND THE BACKGROUND TO IT. ENDS.
HURD
YYYY
MAIN
.HK POLICY
HKD
PUSD
FED
63
DISTRIBUTION
67
PLANNERS
RAD
PS
PS/MR GOODLAD
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