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. Last Updated: 07/27/2016

Airport Deal Ends Hong Kong Row

HONG KONG -- In a boost for Hong Kong, Britain and China announced an agreement Thursday on financing one of the world's biggest construction projects -- an airport that will see the colony beyond Chinese rule in 1997.

The agreement, to be signed Friday, followed years of dispute between China and Britain on the $20 billion project. It came as a welcome, albeit temporary, relief to Hong Kong's nerves, which have been battered by Anglo-Chinese wrangling on issues from sewage to democracy.

A short government statement said Britain and China would sign the agreement in Hong Kong on "overall financing arrangements for the new airport and the airport railway."

Britain and China agreed in 1991 on the need for a new airport, but then disagreed over funding. China's approval is necessary because borrowing for the airport, needed to replace the overburdened Kai Tak terminal, will be repaid after 1997, when China recovers Hong Kong from Britain.

Chinese and Hong Kong officials welcomed the agreement and expressed hope they can agree quickly on separate accords allowing the airport and railway companies to approach banks for loans.

At a packed news conference, Zhou Nan, China's senior official in Hong Kong, said China had been worried that the project would prove too expensive. He welcomed the agreement and said the airport was "for the good of Hong Kong and has been supported by the Hong Kong people."

But Zhou gave no indication that the agreement would help China and Britain repair damage done to their relationship by disputes over electoral reforms championed by Governor Chris Patten against China's wishes.

Hong Kong officials suspect agreement on the airport and other issues, including plans to clean up sewage and pollution in the colony's harbor, have stalled because of the dispute over Patten's push for more representative government.

Legislators, who have to approve the airport finance plans, said they hoped China would now agree to other delayed projects, including a new container terminal needed for Hong Kong to remain the world's busiest port. "I hope the Chinese can really separate political from practical issues," said Huang Chen-ya of the Democratic Party.

Fears of further rocky times ahead led to a muted response to the agreement on the colony's main share index, which closed up 40 points, or 0.4 percent.

The government statement did not detail the airport agreement. But officials said the government would inject 60.3 billion Hong Kong dollars ($7.8 billion) into the airport being built offshore at Chek Lap Kok and a railway that will whisk travellers to central Hong Kong.

The agreement also was expected to set a 23 billion Hong Kong dollar borrowing limit for the two government-run companies building the airport and railway.

Other parts of the project are being funded privately or as government public works programs.

Airport construction has proceeded despite the funding arguments, paid for with occasional injections of government cash.

The main supports have been built for a road-and-rail suspension bridge that, when complete, will be the world's longest.

An island has been leveled, with huge tracts of sea reclaimed for the airport terminal, and drilling has begun on a third tunnel which will run under Hong Kong's harbor.