0003160 G.F. 316
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(ii) site investigation costs (including soils investigations and diversions of utility services) estimated at $41 mn;
(iii) Consulting Engineers' fees, estimated on the basis of
their present fees, but adjusted to take account of the British Group's proposal to take over the detailed design of E & M supplies;
(iv)
site supervision costs, estimated at $130 mn;
(v) MTR Corporation management costs, estimated at $152 mn
over the construction period of Stages 1-4; (subsequent management costs are included in operating expenses).
(b) The assumed contract price is as set out in paragraph 19 above. (c) Replacement of equipment is assumed to take place at the end of the life of the asset concerned as predicted by the Consulting Engineers, at prices prevailing in the year of replacement.
(a)
(e)
(f)
Operating expenses are as estimated by the Consulting Engineers at mid-1970 prices, escalated at 6% p.a. Expenses in the first two years have been adjusted to take account of the cost of MTR Corporation staff transferred from construction to a maintenance function.
Operating revenue consists of:
(i)
(ii)
traffic or fare revenue, estimated by applying the fare structure briefly described in paragraph 10(a) of memorandum XCS(73)8 to the Consulting Engineers' traffic volume estimates (as adjusted for the first two years in accordance with the revised construction programme); and
other revenue (mainly advertising revenue), estimated at 5% of fare revenue.
The project cash flow represents the sum of columns (a) to (e) above.
(g) Interest Payable is estimated at 6% in respect of the ECGD credits provided by the Group, and at 8.5% p.a. in respect of other sources of finance (excluding equity). The various fees payable for the ICGD credits have also been taken into account.
(h) Equity contributed by the Hong Kong Government to the capital
of the MTR Corporation is assumed to be $800 mn.
(i) Contractor's Finance is as indicated by the British Group. (j) The figure for market finance is a residual figure and
represents the system's need for market finance.
The distribution of expenditure and income between years has been determined in relation to the construction programme and completion dates indicated by the consortium.
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The exchange rate used for the purposes of the cash-flow table, (i.e. £1
HK$13.02) was the agreed merchant selling rate for sterling quoted by the Exchanges Banks' Association on 3rd July 1973.
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