TNAG-2967-FCO40-4246-Future-of-Hong-Kong-British-Consulate-General-inclusion-of--1993 — Page 62

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Background

CHEUNG MA RAILWAY PROJECT

1.

In March 1993, Cheung Kong (Li Ka Shing's company) proposed building a 16.5 km light railway connecting Cheung Sha Wan in northwest Kowloon and Ma On Shan in the eastern New Territories (the Cheung Ma railway). Property development was proposed at 5 locations along the route, the profits from which would help fund the railway. Cheung Kong asked for a 30 year franchise to build and operate the system.

2.

Lord Prior raised the proposal when he met the Governor in April. We understand that GEC and Balfour Beatty are contemplating a joint effort to win the project by offering to build the railway on a turnkey basis.

3. HKG have advised that the proposal is rather short on facts. Its financial viability, transport merits and environmental acceptability have yet to be fully demonstrated. The proposed alignment is not favoured in the government's recently completed Railway Development Study (which proposes a route from eastern Kowloon to Ma On Shan for completion in 2011). HKG wrote the company on 17 May seeking more information and have yet to receive a reply.

Li Ka Shing is keen to see the project proceed as soon as possible. But a decision on the Cheung Ma project will have to await decisions on the Railway Development Study which is currently subject to public consultation and which will in due course need to be discussed with the Chinese (as the bulk of the proposed expenditure falls after 1997).

BRITISH CHAMBER OF COMMERCE IN HONG KONG

5. The DTI are in favour of including the British Chamber of Commerce in the new Consulate General building to complement the work of the Consulate General's commercial department. However, neither they nor we see any reason why it should be given rent free accommodation after 1997, by which time we expect it to be a more successful body, attracting a wide range of membership and better able to finance itself.

6. We have recently agreed that the BCC can be given more space in the new building i.e. an increase from 107 sq.m to 200 sq.m.

7. The provisions of the Private Treaty Grant do not allow us to rent or sub-let space without prior reference to the Hong Kong Director of Buildings and Lands. We are preparing instructions for the Senior British Trade Commissioner to approach Hong Kong on this.

bground.railwa.ADMIN

JEB

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