Examples of private tenancies would be aircraft maintenance and aircraft catering undertakings. Examples of Government tenancies would be facilities for the Royal Hong Kong Auxiliary Air Force, the Post Office and the Royal Hong Kong Police Force.
51.
The next stage will be to have these cost estimates refined in the light of the detailed results of the studies, referred to in (a) to (c) of paragraph 48 above, on a year by year basis and expanded to include operating costs. Costs of the magnitude given in the preceding paragraph in respect of a project which, all things being equal, is certain to be able to generate revenue sufficient for it to be run on a sound commercial basis, indicate a strong possibility of loan financing. So, once the pattern of expenditure is cstablished, the step thereafter would be to determine what the revenue would be on the basis of the traffic forecasts.
52.
From an analysis of this information and on the basis that, taking one year with another, revenue must be sufficient to meet all expenditure including financing costs and loan repayments, it will then be possible to deduce the level of financial outgoings which could be met from not operating revenue, that is to say, the sort of loan finance that might be practicable.
FURTHER STUDIES, INVESTIGATIONS AND PLANNING REQUIRED BEFORE A DECISION ON A REPLACEMENT AIRPORT CAN BE TAKEN
53.
$
To sum up, it is recommended that the following studies now be undertaken generally in accordance with the programme at Annex B:
(a)
(b)
(c)
a civil engineering design study by consultants, instructed by the Public Works Department, for a land formation scheme for the replacement airport;
an airport Master Planning study by Consultants, instructed by the Director of Civil Aviation, to include studies of the impact on the environment;
a full cash flow analysis of income and expenditure (adequate for conclusions to be taken by the Government on the feasibility of loan finance) to be undertaken by consultants, instructed by the Director of Civil Aviation advised by the becretary for Monetary Affairs;
CONFIDENTIAL