Britain to seal HK airport deal

The tentative thaw which is emerging in Sino-British relations over Hong Kong will be given fresh impetus tomorrow when the British and Chinese governments formally announce that they have finally secured a deal on the financing of Hong Kong's pounds 12.3bn airport and railway project, the world's biggest single infrastructure project.

Britain thought it had an agreement four years ago when the Prime Minister, John Major, was reluctantly persuaded to go to Peking, just two years after the Tiananmen Square massacre, to sign a Memorandum of Understanding on the airport with his Chinese counterpart, Li Peng.

At the time Mr Major described the agreement as marking ''a new phase in relations between Hong Kong, Peking and London''. In practice, the new phase turned out to be a near total stalemate. Many observers have been puzzled as to why it has taken so long to conclude a minor agreement which has nevertheless ensured that the airport will not be able to open on target in 1997. A Hong Kong government official said last night the prolonged talks ''have always been a slightly bizarre negotiation about nothing''.

The delay was caused by the poor state of Sino-British relations. ''It was always held up by politics, not economic or financial factors,'' the official said.

However, a breakthrough was achieved earlier this month when Britain and China reached agreement on establishing a new court of final appeal in Hong Kong. It was seen as giving the Chinese government what it wanted in terms of limiting the court's jurisdiction and controlling judicial appointments.

China appears to be rewarding Britain for its co-operation on the court deal, producing an extraordinary symmetry as the original agreement on the court, rejected by Hong Kong legislators, came after the first 1991 airport deal and was seen as a reward for British co-operation.

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