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22
13
XCS(73)8
In parallel with the process of negotiating the construction and equipment contract, steps will need to be taken to establish the MTR Corporation, and appropriate arrangements made to enable the Corporation to function effectively. It is essential that the Chairman of the Board of Directors, the General Manager and a nucleus of supporting staff should be appointed at an early date, if necessary before the legislation formally establishing the Corporation is enacted. Moreover, as was stated in paragraph 29 of memorandum XCC(73)10 at Annex A, it is expected that the Corporation would need to engage the services of agents or advisers to assist its own staff in the performance of some of its tasks, at least in the initial years. In particular, it is envisaged that:
23
(a)
(b)
the Corporation would continue to engage the services of the present Consulting Engineers, on an appropriate brief;
a financial management/advisory group would need to be set up to assist in organising and raising the substantial amount of finance (other than export credits and Government equity) required for the project.
Ideally, the arrangements for engaging agents or advisers should be made by the Corporation itself. However, in view of the time which is likely to be required for the Corporation to be legally established and adequately staffed, such arrangments may have to be entered into by the Government initially. In particular, it is considered
that:
(a)
(b)
(c)
having determined the modifications which would require to be made to the Consulting Engineers' work programme (see step (a) in paragraph 20 above), the Steering Group should proceed to negotiate with the Consulting Engineers a revised brief and appropriate adjustments to the scale of fees;
pending the conclusion of the revised consultancy agreement, the Consulting Engineers should continue to be employed on a month-to-month basis, on the understanding that any fees paid to them during this interim period would be deducted from the overall fee finally agreed; and
as soon as possible, the Steering Group should resume discussions with the two merchant banking houses referred to in paragraph 14(a) of memorandum XCC(73)10 at Annex A. which are quite independent of any of the
four consortia, with a view to determining, at the appropriate stage and in consultation with the Government's bankers, the composition of the financial management/ advisory group referred to in paragraph 22(b) above. (These two houses are Kleinwort, Benson Limited and N. M. Rothschild and Sons Limited).
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