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used the same yardstick as for any of our major new projects overseas. We feel strongly that we must secure protection for our investments in Hong Kong equivalent to that which we would expect to receive for a major project anywhere else in the
world. It is Ministers' assessment that we have not yet achieved this in Hong Kong: hence my letter.
The BLD tell us that they do not have the authority to move from their current proposals which follow fairly closely the standard wording for PTGS in Hong Kong. We have thus reached an impasse in our negotiations.
To give you a better idea of the points at issue, I enclose the BLD text for Special Condition 14 together with our proposed redraft. You will see that our differences revolve around the formula for assessing compensation. The BLD draft does now include a reference to the Government complying with obligations (including on expropriation) under international law, but we need to pinpoint more precisely the way compensation will be assessed. We want this formula to make
clear that compensation would be for the full costs of
equivalent reinstatement in alternative accommodation of a similar standard and for all ancillary expenditure incurred in
moving. (We also want to see scope for a form of arbitration to establish the amount of compensation.) This is the main sticking point for us and our primary concern although as you will see from our version of Special Condition 14 there are other changes which we are seeking to the BLD draft.
The BLD was a practical channel for negotiations which we have
been happy to use up until now. But we are breaking new
ground in making arrangements for the future Consulate General
and the PTG which will be in force until 2047. We recognise
the awkwardness in Hong Kong but we conclude these provisions needed, even if they go beyond what has been established as
colvin.NAT
JEB
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