39-JAN-1993 18:06
ODA LONDON
*
071 917 0099
P.04
extend well beyond 1997. However the Chinese expressed concern about the cost of the airport project and its impact on Hong Kong's financial position, notably the level of fiscal reserves in 1997. Several rounds of talks with the Chinese were held in 1991. Finally agreement was reached when
Sir Percy Cradock, the Prime Minister's Personal Adviser, visited Peking in late June 1991. He and Lu Ping initialled a Memorandum of Understanding (MOU) on 30 June, and the
Prime Minister and Chinese Premier signed the document in Peking
on 3 September.
The MOU
The MOU is a detailed document which clearly states China's support for the airport project and gives the
4.
Hong Kong Government the certainty it needs to proceed with the project. It sets out that China will indicate to investors that contracts etc will be honoured after 1997. The Hong Kong Government will complete as many as possible of the airport core projects before 30 June 1997. As set out in the MOU, to facilitate cooperation on major airport-related projects, an Airport Committee has been constituted under the Joint Liaison Group. Its terms of reference are tightly defined. It is a forum for consultation about the granting of major airport franchises or contracts: with 30 days allowed for discussion. Should the Hong Kong Government wish to add a major new airport-related project not in the current core programme (which is unlikely) the Committee will discuss the question and the Hong Kong Government will proceed only if a common view is reached. The same will apply to any core programme projects for which the bulk of Government expenditure will fall after 1997.
5.
The HKG will be able to borrow generally up to HK$ 5 billion
with maturity post-1997: if it wishes to borrow more, this must
be agreed with the Chinese but they have undertaken to take a
new.airport.BACKBRIEF.JRB
2
No comments yet.
Private notes are available after approval.