CONFIDENTIAL
FM HONG KONG
TO ROUTINE FCO
TELNO 3389
CONFIDENTIAL
HKCC 182 12
OF 170143Z NOVEMBER 90
"
Pa
&ISIO
INFO ROUTINE PEKING, UKREP JLG HONG KONG
227
YRTELNO 2083: PADS: THE WAY FORWARD
251
102417
MDLIAN 7766
1. WE HAD IN FACT CONSIDERED DEPLOYING AN ARGUMENT BASED ON THE ANALOGY BETWEEN THE AIRPORT CORE PROGRAMME (ACP) AND THE MTR, BUT DECIDED IT WAS A BIT COMPLICATED. IT IS TRUE THAT THE PROPORTION OF CAPITAL EXPENDITURE ON THE ACP IN RELATION TO GDP IS NOT DRASTICALLY OUT OF LINE WITH THE CORRESPONDING PROPORTION FOR THE MTR. ON A CUMULATIVE BASIS, ACP WILL TAKE UP 1.9 PERCENT OF THE PROJECTED GDP IN THE YEARS UP TO 1997, WHILE THE MTR TOOK UP 1.2 PERCENT OF THE GDP DURING 1979 TO 1985. HOWEVER, THE COSTS ARE NOT EXACTLY COMPARABLE. WE WILL GIVE THOUGHT TO WHETHER WE CAN
REFINE THE POINT TO GIVE IT MORE IMPACT.
2. SECONDLY, THE HIGHER INCREASE IN OPERATING REVENUE FOR 1997- 98 THAN IN OTHER YEARS IS BROUGHT ABOUT BY THREE MAIN FACTORS
(A) THE ADDITIONAL REVENUE FROM THE 3 PERCENT ANNUAL RENT WITH
EFFECT FROM JULY 1997:
(B) THE ADDITIONAL REVENUE FROM A TRIENNIAL RATES REVALUATION
EFFECTIVE IN 1997-98:
(C) THE INTEREST EARNED IN THAT YEAR ON A MUCH LARGER RESERVE BECAUSE OF THE TRANSFER OF THE 92 BILLION DOLLAR SARG LAND FUND
TO THE FISCAL RESERVE.
WE WILL KEEP IN MIND USING (A) AS AN ADDITIONAL POINT IN THE NEXT ROUND.
WILSON
YYYY
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