BEIJING has asked Britain to put aside additional funds to cover the costs of any airport core projects not completed before the transfer of sovereignty. A source close to the Chinese negotiating team said Beijing was worried the Special Administrative Region government would have to foot the bill if any part of the airport project was not finished as scheduled in 1997. Under the Sino-British Memorandum of Understanding on the airport, Britain has pledged to leave at least $25 billion in reserves to cover core projects. Anything set aside for uncompleted projects would be in addition to this. Although Britain agreed to try its best to complete the airport core programme before June 30, 1997, the two-year row over funding has meant some parts are almost certain to be late. For instance, the Kowloon-Central section of the airport railway has been rescheduled for completion in 1998 because of a year-long delay in starting work on the Western Harbour Crossing. Airport Consultative Committee member Ho King-on revealed Britain and China were still at odds over details of financial support agreements for the Provisional Airport Authority and the Mass Transit Railway Corporation. At issue were the interest rates and payback periods governing borrowings related to the projects. Mr Ho said Beijing wanted a lower average interest rate on the loans. However, it is understood Britain sees this demand as unreasonable, insisting there is no way it can guarantee the future direction of interest rates. Mr Ho said both sides were also discussing how the agreed total of $23 billion in borrowings for the project should be split between the railway and airport authority. It is understood Beijing wants the authority to receive a greater proportion. It says the airport has more profit-making potential than the railway and could be expected to repay any loans earlier. Mr Ho said another problem in the deadlocked talks was the power granted to the body overseeing spending at Chek Lap Kok. It is understood Beijing wants the Joint Liaison Group's Airport Committee to have greater powers of supervision. The airport has long been a running sore in Sino-British relations. In the most recent outburst, China's chief of Hong Kong affairs, Lu Ping, accused Britain of problem-making by asking Beijing to back the two financial support agreements before it would endorse the borrowing limit of $23 billion.