4 February 1993
BY FAX
RESTRICTED
Foreign & Commonwealth
Office
20
London SWIA 2AH
Telephone: 071-
Mr M C Sze
Secretary for Constitutional Affairs Central Government Offices
Hong Kong
Dear Michael,
PRIVATE TREATY GRANT FOR THE COLVIN HOUSE SITE
I am not sure to what extent your office has been tracking progress on the negotiations between the British Trade. Commission (BTC) on behalf of HMG and the Building and Land Department (BLD) over the terms of the Private Treaty Grant (PTG) for the Colvin House site. We have resolved various problems over the last year, but differences remain which cause us considerable concern and which prevent us from agreeing to the PTG as now drafted. Preparation of the site for construction is scheduled to start in April; we are of course anxious that an agreed text be ready for signature as soon as possible - by early March at the latest. With apologies for burdening you with these complications, I am writing to explain our difficulties and to ask for your advice and assistance in moving things forward.
Briefly, our main problem is that the PTG as now drafted would not provide what we judge to be adequate protection in the event of future expropriation. Special Condition 14 of the PTG deals with this subject. In examining the PTG we have 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.
HKD 406/1
colvin.NAT
RESTRICTED
JEB
RECEIVER
05FEB 1993
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