C.S. 166
CONFIDENTIAL
機密
XCC(78)8
Copy No Page 8
of 80
of the Tsuen Wan Depot site, the most recent estimates made by the Corporation indicate that, if the Corpora- tion had to pay the premium for air space above the site in cash, it would be difficult even to make the development financially viable. On the other hand, a surplus arising from property development at Tsuen Wan could be used to meet any one or more of the following contingencies:
(i)
offset any excess construction costs;
offset any revenue deficiencies;
accelerate loan repayments; or even
(ii)
(iii)
(iv)
bring forward the date when the Corporation
begins to pay the Government as share holder
20
on behalf of the public dividends on its investment.
As it is essential to the development of the town that this site in the centre of Tsuen Wan should be fully developed, it is proposed that the Government should go some considerable way to meeting the Corpora- tion. But there are two considerations to be taken into account. The first is that, as the Corporation was not expecting to be able to improve its cash flow position as a result of development over the Kwai Chung site (paragraph 19(b) above), any improvement as a result of development over the Tsuen Wan site would be something of a windfall. The second is that, in addition to the $95 million cash outlay necessary to make the Tsuen Wan site available for development (paragraph 10 above), the Government will have a further net cash outlay of $70 million to adapt the area for use by the MTRC (paragraph 11), an outlay that would not have been necessary had the depot been sited in Kwai Chung. To take account of these considerations and the fact that the cost of the develop- ment and the return from it can only be surmised at the present time, the intention is to put the Corporation in funds to meet the premium for the air space on a temporary basis only. This would be achieved by the Government accepting redeemable preference shares, the date or period of redemption to be determined on completion of the development. Thus the option would be open to the Government, if the Corporation made a substantial cash profit on the development, to redeem the shares for cash. At the other end of the spectrum, if the Corporation made a substantial cash loss on the development, the Government could replace the preference shares for ordinary shares.
Short Term Tenancies
21
An additional issue, which is being included in this memorandum, is the problem of payments for works areas granted on short term tenancy to the Corporation. Memorandum XCC(75)45 which, inter alia, sets out the basic principles for the grant of land to the Mass Transit Railway
CONFIDENTIAL
機密