TNAG-2727-FCO40-3933-Hong-Kong-political-parties-Association-for-Democracy-and-Pe-1993 — Page 20

3.3

The Issue of Bonds

The MTRC has maintained for short term credit ratings while long term ratings remain in investment-grade categories(1). ADPL, therefore, suggests that the MTRC could issue bonds to raise $10 billion for constructing the AR. The amount of savings deposited by the public banks is estimated to stand at $360 billion at present. Given the low bank interest rate of 1.5%, bonds yielding a interest of 4% could be very attractive.

Raising capital in Hong Kong also has its symbolic meaning. It provides a channel for the Hong Kong citizens to participate in the ACP projects. Not surprisingly, this form of participation is an opportunity for them to monitor the progress of ACP projects.

3.4

Points for Clarification

According to the clause (C) of Memorandum of Understanding Concerning the Construction of the New Airport in Hong Kong and related questions (MOU), an airport committee will discuss following matters under the auspices of the Sino- British Joint Liaison Group (JLG):

a)

b)

c)

Major airport-related franchises or contracts straddling 30 June 1997.

Airport-related debt straddling 30 June 1997.

Any major airport project other than those in the Annex to the MOU and any of the current ACP projects in the Annex for which the bulk of Government expenditure will fall after 30 June 1997.

Besides, the clause (G) of Mou also states that "both Government wish to intensity consultation and cooperation over Hong Kong issues in the approach to 30 June 1997. As part of this intensified consultation, the British Foreign Secretary and the Chinese minister for Foreign Affairs will meet twice a year to discuss matters of mutual concern and the Director of the Hong Kong and Macau office under the State Council and the Governor of Hong Kong will also hold regular meetings.

Mr

Chen Zou'er, senior officer of Hong Kong and Macau Affairs office, told ADPL that the term 'related questions' in the MOU covered matters other than ACP projects. Therefore, both governments should use above-mentioned channels to deal with matters which are concerned by both sides according to the clause (G) of MOU.

Nevertheless, the spokesman of UK foreign affairs said that the clauses of MOU only refers to the ACP projects.