TNAG-2770-FCO40-3987-Coverage-of-Sino-British-talks-in-the-Hong-Kong-press-1993 — Page 183

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MDLI 6890

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PROJECT. THE ITEM OF CALLABLE EQUITY WOULD THUS BE ELIMINATED. THE LEVEL OF LOANS TO BE RAISED BY THE PAA AND THE MTRC WOULD BE REDUCED TO 10 BILLION DOLLARS.

5. MING PAO UNDERSTOOD THAT THE CHINESE SIDE FELT THE NEW FINANCING PACKAGE WAS HEADING TOWARDS THE RIGHT DIRECTION, BUT THERE WERE STILL TECHNICAL DETAILS TO BE CLARIFIED. THEY WERE READY TO ACCEPT THAT THE TOTAL AMOUNT OF LOANS WOULD EXCEED 5 BILLION DOLLARS, BUT THEY WOULD INSIST THAT WE SHOULD ALLOCATE MORE FUNDS FROM THE RESERVES TO THE AIRPORT PROJECT. THE REPORT SAID THAT A SENIOR HKG OFFICIAL HAD TOLD SOME ACC MEMBERS YESTERDAY THAT THE AC TALKS MIGHT HAVE TO LAST UNTIL 10 JUNE BEFORE SOMETHING COULD BE ACHIEVED.

6. QUOTING CHINESE SOURCES, SING TAO DAILY SAID THAT AS LONG AS THE BRITISH SIDE PROCEEDED IN ACCORDANCE WITH THE MOU, THE QUESTION OF FINANCING ARRANGEMENTS WOULD BE RESOLVED. HOWEVER, THE CHINESE SIDE WERE AWARE THAT AMONG THE CONTRACTS FOR THE NEW AIRPORT AWARDED, BRITISH-FUNDED COMPANIES HAD TAKEN UP A RELATIVELY LARGE SHARE.

7. WEN WEI PO IN ITS EDITORIAL TODAY STRESSED THE NEED TO BRING DOWN CONSTRUCTION COSTS OF THE NEW AIRPORT, WHICH WAS THE KEY TO RESOLVING THE FINANCING ARRANGEMENTS ACCORDING TO THE MOU. IT SAID THAT WHILE INCREASED CAPITAL INJECTION INTO THE PROJECT AND ATTEMPTS TO REDUCE DEBTS WERE DEFINITELY POSITIVE MEASURE, THE PRINCIPLE OF BUILDING AN AIRPORT OF 'LOW COST, HIGH RETURNS' COULD NOT BE OVERLOOKED AND THE SAR MUST NOT BE SADDLED WITH A HEAVY FINANCIAL BURDEN. NOTING THAT THE PAA HAD PREVIOUSLY REVISED THE AIRPORT PLATFORM PLAN, THE EDITORIAL SAID IT WAS POSSIBLE TO FURTHER CUT AIRPORT COSTS, IN PARTICULAR COSTS FOR THE AIRPORT RAILWAY. WHETHER THE RESUMPTION OF AC MEETING COULD SETTLE THE FINANCING ISSUE LAY IN WHETHER OUR PROPOSAL WOULD MEET THE MOU PROVISIONS.

MINISTERIAL MEETING

6. HK DAILY NEWS REPORTED THAT JAPAN WAS LOBBYING G7 MEMBERS TO LET CHINA TAKE PART IN THE JULY SUMMIT. THE REPORT SPECULATED THAT THIS WOULD PROVIDE A CHANCE FOR THE PRIME MINISTERS AND FOREIGN MINISTERS OF CHINA AND BRITAIN TO MEET. UNITED DAILY QUOTED SOURCES IN BRITAIN AS SAYING THE TWO FOREIGN MINISTERS WOULD MEET AT THE END OF JUNE.

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