e benefits not only of the transfer of the Land Fund into the Leserves but also, every year, that is to say the Hong Kong, the SAR government, would have the benefit of the full land premia, not as at present only 50 per cent.
So, stretching over that period we get a perfectly acceptable and healthy situation with adequate reserves.
Question 22: By removing the port from the original plan, does that mean the government will scrap such projects?
No, it doesn't, but I am glad you raised it because that might have been a conclusion. There are a number of points about the port projects.
The first is that they were one of the projects, and of course there is a number of different port projects, that stretched quite well beyond 1997. So they are not,
in any significant sense, an immediate, major, call on our own expenditure. Another point about port projects is that a much higher proportion of those costs will, anyway, be borne by the private sector. I mean, you are familiar with the fact that we already build
build container
container terminals,
terminals, essentially, through the private sector. And, thirdly, it is not so clearly bound to any particular date. There is an urgency about having an airport because of the congestion at the existing airport, or the projected congestion at the existing airport.
The port is a gradual increase in capacity which can be implemented as demand makes itself evident. So we have a much more flexible situation on the port. It is spread over a longer timescale and the proportion of actual government money involved is less. That is why it doesn't appear in the list of things which we have to do to get the airport up and running - the first
runway.
Question 23: But by not including it in the new estimates, in effect, you are just pushing it off and saying, because the government will participate in the development of these projects.
Mr Macleod: Well, we are not including it in this list which revolves around the airport. That doesn't mean that we are not spending any money on port developments in the period to 97. In fact, we are providing some money. In our present forecasts we assume some spending on the port. But it is not huge. And it isn't really related to this key aim - which is the airport.
Mr Macleod, to what extent will the government have to draw upon its reserves to finish these [inaudible] projects?
Question 24:
Mr Macleod: As we have said a number of times, we will have to draw on the reserves to some extent. There is no doubt about that. And we will draw on it through having a
on it through having a few years of deficit budgeting. That, indeed, was in the last budget speech and in the back of the last budget speech you will see the normal projections there of the medium-range forecasts which go about four years ahead. You will see the reserves going down somewhat.