CONFIDENTIAL
XCC(71)33
(a)
Capital: to be subscribed in the following proportions:
%
Jardine, Matheson & Co Ltd
30
Butterfield and Swire (Hong
Kong) Ltd
30
Hong Kong and Kowloon Wharf
soq and Godown Co Ltd::
$15
+
Hong Kong and Whampoa Dock !
+
Co Ltd
15
Hong Kong Government
10
100
SUI (19
The two principal potential subscribers envisage a total capital requirement in the opening years of an ollue of $8-10M, but this cannot be accurately determined
(b)
(c)
(d)
(e)
until the Consultants' report is received. It is envisaged that the consortium would seek to raise as much as possible by borrowing from the banks.
Return on Capital: charges to be subject to Government approval and fixed so as to enable the consortium to achieve, taking one year with another, an average approximate return on capital employed of 15% p. a. after tax, but before deduction of loan interest, or some other formula designed to produce the same effect, It is accepted by all concerned that there must be a scheme of control.
Board of Directors: all the participants would expect to be represented on the board, probably in rough proportion to their shareholdings.
Provision of Fixed Assets: the Government to provide the hardstandings for aircraft and taxiways, roads, vehicle parking facilities and airlines', agents' and consolidators' office building, the cost to be recovered through airport charges; the consortium to provide the fabric of the building and the equipment. (In paragraph 7 of memorandum XCC(70)41 it was envisaged that the Government would provide the fabric of the building and the operators the equipment, but it is now felt that, since the types of equipment to be used may affect the design and use of the building and vice versa, the consortium should have control over the design and construction of the building as well as the purchase of equipment and be responsible for the maintenance of both).
Royalty: it is not proposed that any royalty should be levied on the consortium's profits, but it may be necessary to levy a charge on throughput as a con- tribution towards Government's expenditure on the associated capital works,
CONFIDENTIAL
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