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XCS(75)1
(a) selects those sections of line serving the highest
concentrations of population; and
(b) defers or reduces capital expenditure,
has been selected. Together, for a limited investment the Modified Initial System seeks to move the maximum number of people and to obtain a commercial return on investment.
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The result is an S-shaped line running from Kwun Tong to Central District (see Appendix A of the Report at Annex D). Com- pared with the Initial System, the Modified Initial System:
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(a) omits the section of the Island Line from Admiralty
Station to Western Market Station partly because it is not commercially viable until the Island Line is built and partly because two stations will cope with the reduced traffic to and from the Central District;
(b) omits the line linking Nathan Road with Lai Chi Kok (which runs below Cheung Sha Wan Road). The construction is likely to be costly and its omission will considerably simplify the Nathan Road route; and
(c) simplifies, and therefore reduces the cost of, the
Nathan Road route since the junction with Stage 3 is no longer necessary.
The following is a comparison of the cost and the likely financial results of the Initial System at the price originally put forward by the Japanese Consortium, the Initial System having regard to price escalation, and the proposed Modified Initial System (after applying the fare structure proposed in paragraph 4. 1 of the report at Annex D):
(All $ figures are in millions)
Contract
Costs
Return on Investment
%
Payback
Year
Maximum Total Outstanding Loans
$
Initial System
(original
proposals)
5,000
17.5
1989
5,300
Initial System
(revised esti-
mates with
price escala-
tion)
7,800
13.5
1994
11,000
Modified Initial
System (with
price escala-
tion)
4,900
14.5
1992
6,000
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