China set to approve land plan

THE airport-related Central-Wan Chai Reclamation contract is set to secure China's backing amid a more flexible and positive attitude towards the Chek Lap Kok projects.

As negotiators from the Joint Liaison Group Airport Committee resume talks today, more positive signals have emerged that China is prepared to support the reclamation plan if doubts on some details can be resolved.

British officials are understood to be keen that Beijing approve as soon as possible the 21-hectare reclamation, which will house the Central terminus of the airport railway. It is unclear whether China's blessing will come as early as today.

China's willingness to be more flexible with the 10 airport core programmes was signalled by its approval two weeks ago of the Western Harbour Crossing - the first of the three privatised airport projects to clear diplomatic hurdles.

The validity of the bids for the reclamation, already extended four times, is due to expire on Sunday and, if no agreement is reached by then, the Government will have to decide whether it should seek another extension.

Asked whether there would be a delay in the project if no deal was secured before next week, a government spokesman said: ''It's too early to make any firm projection.'' It is understood that one of China's major concerns, requiring clarification from Britain, is the possible linkage the reclamation has with the redevelopment of HMS Tamar.

Beijing remains uncompromising on the defence land issue and is extremely sensitive about possible relocation of the present British Forces headquarters - the Prince of Wales Building at Tamar.

After years of tough negotiations, China is adamant that the Prince of Wales Building should be kept as the military headquarters.

Sources said the Chinese side was concerned that approval of the reclamation might be interpreted as an endorsement to pull down the Prince of Wales Building.

It is understood that British negotiators will seek to dispel the worries and make clear the reclamation has nothing to do with the Tamar redevelopment plan. The contract does not cover the Tamar area.

Britain argues that the reclamation, apart from housing the Central terminus of the airport railway, has further development potential which will generate huge economic benefits.

The more difficult parts of the Airport Committee negotiations which remain are the financing package for the airport and its associated rail link.

It is understood China still considers inadequate the level of equity injections to the future Airport Authority and the Mass Transit Railway Corporation proposed by Britain.

Beijing maintains the Hongkong Government can further increase the level of equity injections given the huge reserves the territory has accumulated over the past few years.