Accord 'nearer' on HK airport

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The Independent Online
BRITAIN and China edged closer towards an agreement on funding Hong Kong's pounds 13.5bn new airport yesterday, in negotiations that are a test for the apparant thaw in relations.

The talks failed to secure an actual deal, but officials from the two sides immediately started work on drafting documents intended to form the basis of a final agreement. Repeated failure over the past two years to reach agreement with China over the Chek Lap Kok airport funding package has dogged the project but in recent days Peking officials have sounded more conciliatory. After yesterday's meeting, the British team leader, Hugh Davies, cautioned that there had been 'perhaps not as much progress as we would have liked but we will reach an agreement, I am confident, on the basis of the progress we have made.'

Asked whether a deal could be in place by the end of this month, Mr Davies said: 'Yes. If possible, in the next few days but everything depends on the drafting group.'

Neither side would be specific about what was blocking the funding package.

In the past, the main problem has been China's rejection of the level of debt that the Hong Kong government wants to raise to fund the airport. Work is well underway, but a long-term financing package with the banks and international investment houses cannot be put in place without China's agreement. China's apparant recent strategy decision to separate the row over Hong Kong's political development from the business of sorting out practical and economic issues has created an expectation in the colony that agreement may be near. On Monday, a meeting of the Sino-British Joint Liaison Group will also reconvene amid hopes of a deal on the future of the colony's defence lands.

What officials find difficult to interpret, is the coincidence of timing of these talks with the vote next Wednesday in Hong Kong's parliament, the Legislative Council, on the political reform package of the governor, Chris Patten. Whatever the shape of the package, China remains committed to scrapping the political structures left in place by the British when sovereignty reverts to China in 1997.