HK advisers appeal to China over airport plan

LEADING Hongkong businessmen yesterday urged Chinese leaders to help release the brakes on the vast infrastructure projects, including the new Chek Lap Kok airport, planned for the territory.

The businessmen among the Beijing-appointed Hongkong Affairs Advisers issued a joint plea that Beijing take steps to minimise damage to the territory's economy, caused by the lingering Sino-British political row.

They urged senior mainland officials, including Mr Lu Ping, the director of the State Council's Hongkong and Macau Affairs Office, and Mr Zhou Nan, chief of the Hongkong New China News Agency, to separate economics from politics.

While stressing the need for co-operation between the two sides on Hongkong's transitional matters, they pointed out that China's support for major projects, particularly the airport, would help maintain the dynamism of the territory's economy.

The plea for ''business as usual'' came in unison from an impressive array of Hongkong's corporate tycoons, including Mr Li Ka-shing of Cheung Kong, Mr Cheng Yu-tung of New World, Mr Lee Shau-kee of Henderson Land Development, Mr Edgar Cheng Wai-kin, the late Sir Yue-kong Pao's son-in-law who runs World Wide Investments, and Mr Hari Harilela, the prominent Indian businessman.

After the 49 newly-appointed advisers received their credentials at a ceremony in the Great Hall of the People, they were photographed with the Prime Minister, Mr Li Peng, and the President, Mr Jiang Zemin, and a host of other top officials.

''We're counting on you for your opinions and good advice,'' Mr Jiang told the advisers at a dinner in their honour, also held in the Great Hall. The effect of political issues on Hongkong's economic prosperity dominated the first two of six sessions 80 advisers who have gathered in Beijing had with mainland officials.

Mr Li Ka-shing said: ''I may not be correct, but I do believe that Hongkong people are hoping that China and Britain could sit down and talk.

''[The economy] has been affected to a certain extent. I hope that Hongkong will not have too many fluctuations.'' Mr Li also said the controversy over the Container Terminal 9 should be resolved through the Joint Liaison Group (JLG), which he said should resume talks.

Mr Cheng Yu-tung urged Beijing to support the new airport plan.

A dispatch from the China News Service last night quoted Mr Lu as saying that if the British side strictly abided by the Memorandum of Understanding on the airport, China would support its construction.

Progress on many aspects of the airport plan has come to a standstill because China will not support the financing package drawn up by the Government. Its objections lie mostly in loan arrangements for the rail link.

In Hongkong, Government sources said the British side might consider drawing up yet another financing plan for funding the Provisional Airport Authority (PAA) and the Mass Transit Railway Corporation (MTRC) to get an early agreement with China.

The second package proposed by the British side last summer envisaged re-investing into the corporations the $40 billion land premiums generated by property development along the airport railway to help reduce their debts and eliminate the need for a large amount of stand-by cash.

Of the $40 billion, half of it is to be channelled to the Special Administrative Region (SAR) Land Fund as stipulated in Annex 3 of the Joint Declaration.

While proposing the British side inject more cash into the corporations to reduce the level of debts, China's main objection against the second package is the request to draw the $20 billion out of the Land Fund to finance the projects.

However, sources said that in thinking up a third alternative to finance the airport and its associated railway link, the Government would not rule out the possibility of dropping the requirement for investing the SAR Land Fund.

''I would not rule out something along that line [dropping the Land Fund requirement],'' said a source although reiterating that the second package put to Beijing was financially viable.

However, the source also stressed that the Government would be reluctant to try out any third financing plan if it was not likely to succeed.

While anxious to get ahead with the project, the source said the British side would not put any deadlines for the Chinese side to agree to resuming the JLG Airport Committee meeting or offering a reply.

The lack of agreement with the Chinese side on the financing of the airport plan to date is creating funding problems for the projects.

The next big issue would be the funding for keeping PAA headquarters running and the source said the amount the Government was seeking from the Legislative Council Finance Committee had to be realistic.

The source said, to ensure the corporation kept going, the Government had to get funding for the airport body for at least several months.

Under the first financial package, which heavily relies on debt-financing, the Government is to inject a total of $16.6 billion equity to the PAA for funding the Chek Lap Kok facility.

So far, about $14 billion has been committed and approved by Legco as a cash advance to the PAA.