TNAG-2815-FCO40-4061-Future-of-Hong-Kong-International-Rights-and-Obligations-(IR-1993 — Page 90

ifl.rb/Oct 93/26.10

HM Treasury

*7 MON

M Power Esq

Overseas Development Administration

Room V710

94 Victoria Street

LONDON

SW1E 5DJ

Dear Mills.

Parliament Street London SWIP 3AG Telephone 071-270

69

-26 October 1993

HKC 031/10

1.DEL 1993

IMF AND WORLD BANK 1997 ANNUAL MEETINGS IN HONK KONG

We spoke on the telephone yesterday about a possible contingent liability for HMG arising out of the latest package of which the Fund/Bank have proposed by signed by

agreements\letters all the parties.

I attach copies of the texts in case you have not already seen them, Treasury Solicitor's view on the contingent liability and a draft submission I propose to put to the he Chancellor.

Any liability would of course be shared jointly between ODA for the World Bank and the Treasury for the IMF. I am advised by TOA here that the best way to reflect this would be for ODA and HMt to lay a joint minute before parliament reporting the liability.

When we

spoke yesterday, I said that I was awaiting confirmation form Hong Kong of their original estimate that the costs to be incurred on the meetings before 1 July 1997, and hence the size of the liability, would be in the region of £100,000-200,000. I have today heard via the FCO that the Hong Kong authorities considered estimate is now £3.5m ! They had not, apparently, included staff costs or deposits in the original estimate. liability would therefore be more material than we had envisaged. However, the chances of it crystallising remain remote.

The

I assume you will need to consult ODA Ministers. One possibility would be to consult ODA/Treasury Ministers in parallel. The FCO are, I understand, proposing to seek Ministerial approval to the current package of texts but there are still some outstanding points on visas which are proving difficult for the Hong Kong authorities and which they would be prefer to resolve before consulting Ministers. I should be grateful to know how you propose to proceed and to what timetable.

I am copying this letter to Kevin Tebbit and Nigel Whitney and Helen Roberts here.

to

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J CUNLIFFE

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Fax 071-270 5653

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