TNAG-2693-FCO40-3896-Meetings-and-calls-on-Alastair-Goodlad--Minister-of-State-fo-1993 — Page 17

09-DEC-1993 17:30

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BRITISH TRADE COMMISSION

From R.F. Cornish LVO British Senior Trade Commissioner

IN CONFIDENCE

A J Lippitt Esq GEC

1 Stanhope Gate

London W1A 1EH

cc: James Chiu Esq (by hand)

GEC Hong Kong

P.03

нька 301

UJA., 1994

British Trade Commission Hong Kong

9th Floor

Bank of America Tower

18 Harcourt Road Central

Hong Kong

Tel No: 523 0176 Fax No: 845 2870

8 December 1993

A

Dear John.

Thank you for sending me a copy of Lord Prior's letter of 1 December to Li Ka-Shing. I have discussed the Cheung-Ma Railway Project with James Chiu and Joseph Chow (JMK Consulting Engineers) and, separately with Haider Barma, Secretary for Transport, and John Telford, his deputy. It is clear that there is great skepticism in the Hong Kong Government about the Cheung Kong proposal.

The factual position is that consultations on the Railway Development Study continue. Thus far they have shown that the Shatin Public Board support the Cheung Kong proposal. Based on the consultative process, the Government is likely to formulate its strategy towards the end of January. It will then seek EXCO's blessing before starting the LEGCO process.

Although nothing is decided, it looks clear that the Government's first priority will be the Western Corridor route. and its second priority will be the MTR extension to Cheung Kwan O. Thereafter, they do not appear to be in much of a hurry, pointing out that there is spare KCR capacity. They have no hangup on the principle of a privately developed line as proposed by Cheung Kong. But they very much doubt that Cheung Kong will operate it and in any case, as a responsible Government, they need to be sure that the project is in all respects viable. They certainly do not want the operator tö come back after a couple of years saying that the thing does. not work. So they need to look at overall viability as well as operating costs, replacement costs and so on.

Then

Specifically, the Government harbour strong suspicions that the Cheung Kong proposal is in essence a series of important property developments with a small railway line attached. there are a number of individual problems which they believe Cheung Kong have not yet addressed satisfactorily. Firstly their proposal apparently includes a line which runs alongside

/a street

IN CONFIDENCE

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