Har ka Govern
Applicatio
The Hong Kong Government has asked for a loan from 1.1.0. to finance the runway extension (estimated cost £6,08 million) on favourable terms to be negotiated, in recognition of the United Kingdom's own aviation interest in the projected development. remaining improvements (estimated cost £7.62 million) the Hong Kong Government proposes to finance from its own resources.
The
5. The following factors are relevant to the terms of the loan sought. The operation and development of the airport is to be self- financing, landing fees and passenger charges being adjusted sscordingly. The "profitability forecast" is based on repayment of the cost of the projected development over fifteen years at 7% 9.8.
interest.
Grounde of Application
6. When the application for a loan was first presented in 1968 (there had been a previous application for a grant which the Commonwealth office persuaded the Hong Kong Government to withdraw) it seemed that Hong Kong was entering a period of deficit budgets. But for the communist-inspired troubles in 1967, which delayed expenditure on capital account, the outturn of the financial year 1967/68 would have shown a deficit instead of the small surplus £89,375) in fact recorded. The "rolling" five year forecast of revenus and expenditure indicated that by the end of 1971/72 an accumulated deficit of $55 million was likely. This would run the reserves down to some £19-20 million, a figure substantially below the £61 million estimated to be required in 1971/72 to meet the minimum safety level of half of amual recurrent expenditure. In these circumstances the Hong Kong Government took the view that other sources of finance would have to be found for projects that must be regarded as less essential compared with the needs of the Colony's developing social services,
<Note:
The Colony'a financial situation has not developed along
the lines foreseen. kecovering from its set-back in 1967, the economy forwed ahead in 1968 and continues to
grow at the same high rate. An estimated deficit of nearly £lm. in 1968/69 has turned into a surplus of over £im. The buoyancy of the revenues and an
/ apparent ...