Transport infrastructure

Road and rail transport links to the new airport are obviously required and a fixed crossing to Lantau Island

will be needed to carry such links. The total estimated

cost of all transport infrastructure is HK$27 billion (at 1989 prices), about 50% of which would be funded by the Hong

Kong Government and the rest by the private sector.

5.

Lantau Urban Development

The Hong Kong Government will be responsible for creating the land and providing the infrastructure for residential,

commercial and industrial areas on Lantau at an estimated

cost of HK$15 billion. Like the port, this will be incremental development phased to meet demand.

Overall cost in relation to the Hong Kong Government's

financial position

On the basis of the detailed financial studies conducted

so far, the total expenditure likely to fall to the Hong

Kong Government over the next 15 years is expected to be

about HK$50 billion. The cost of the projects will continue to be refined as studies progress. If the Hong Kong

Government thought that the projects or their costs were becoming unmanageable, they would re-examine them.

The Hong Kong Government's reserves currently stand at over

HK$72 billion. This excludes the SAR Government's Land Fund

which stands at about HK$20 billion and will probably double

between now and 1997. The Hong Kong Government will not, of course, pay for its share of the costs simply by spending

its reserves but will maximise the amount derived from

general revenue and external sources (eg loans) in order to

BIFADF/4

CONFIDENTIAL

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