Welcome to the new Independent website. We hope you enjoy it and we value your feedback. Please contact us here.

Peking wins over HK airport

(First Edition)

HONG KONG (AP) - In a move highlighting China's power over Hong Kong, the territory's government yesterday announced it had agreed to Chinese demands to pay for the greater part of a new airport for the territory with cash.

The announcement brought the two parties a step closer towards building what could be one of the great engineering feats of the 1990s. The plan, costing 83.2bn Hong Kong dollars (pounds 5.9bn), includes the construction of one of the world's longest bridges.

K Y Yeung, the colony's Secretary for the Treasury, said Britain put forward a proposal that draws heavily on suggestions offered by the Chinese. Under the proposal, the government would largely pay for the project with ready cash instead of taking out loans, he said.

Mr Yeung said maximum debt, originally placed at HKdollars 73bn, would fall by about 70 per cent, to HKdollars 22.9bn. He said the government would also inject an additional HKdollars 40bn into the project.

'The result would be like buying land and building a house with cash and not taking out a mortgage - not a good economic decision in Hong Kong, where interest rates are low,' said Martin Lee, the leading democratic activist in the territory.

Helmet Sohmen, a leading Hong Kong businessman, said: 'There are no economic reasons behind these negotiations. The Chinese government wanted to force concessions because they want to save face. They want to show their power.'

Wu Jianmin, the Chinese Foreign Ministry spokesman, said in Peking that he had no immediate comment on the British plan.