G.r. 316
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15.
In addition, there are 54 firm (ie. Category A} public works projects which will straddle 1997 and which the Chinese have not been consulted on. Contracts have been signed for 18 of these. In all, expenditure on these 54 projects amounts to HK$6 billion. That for the 18 signed contracts amounts to HK$ 902 million. The reason the Chinese have not been consulted is that these contracts are small. But the total Category A expenditure already agreed for the next 5 years, and which has post 1997 implications, is HK$81.5 billion (HK$49.1 billion excluding the ACP).
16.
We should continue our discussions with the Chinese on the non-ACP franchises and major contracts, and also on the one major ACP franchise, the Western Harbour Crossing (which China has already accepted in principle). We should stress the point in their own statement that they will take a positive attitude towards post 1997 investment. If they block particular franchises we should not seek to hide this fact. We should contrast it with their statement about a positive attitude.
17.
The Chinese also have lists of franchises straddling 1997 which were either granted before 1984, or between 1984 and the time we started discussion of franchises in the JLG. We should not ourselves take the initiative to ask whether these are acceptable. If the Chinese want to consider them again they will no doubt let us know.
18.
What is more difficult is the smaller government contracts straddling 1997 which, in aggregate, will amount to over HK$80 billion. The views of members on whether we should initiate discussions on these on a regular basis would be welcome. The best answer might be to wait for a few months and see whether the Chinese pursue the matter (they made the same statements in the airport negotiations but dropped the matter when the MOU was signed).
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