For in nation on
10 September 1991
CONFIDENTIAL
НКВ 182/1
27
XCCI(91)44 Copy No.
п
Dr Ricketts
ти
NOTE FOR EXECUTIVE COUNCIL
PADS: FINANCING ARRANGEMENTS FOR THE LANTAU FIXED CROSSING
Mr Cox 13/1-
Mr Funde
Fustess
4/9
INTRODUCTION
This note informs Members of the invitation to submit financing proposals for the Lantau Fixed Crossing (LFC) as part of the tender invitation to construct the Tsing Ma Bridge of the Crossing.
BACKGROUND
2
On 2 October 1990 the Council ADVISED and the Governor ORDERED that the Lantau Fixed Crossing (LFC) project should be implemented using Government funds. An invitation to tender for construction of the Tsing Ma Bridge section of the LFC was issued on 31 July 1991 to five pre-qualified consortia.
3
We stated in both the pre-qualification and the tender documents our intention to invite finance offers as options to tenders to construct. Tenderers are not required to offer any finance offer, but such offers may enhance a tender if they are on terms more favourable than those currently available to Government for non-contract-related financing or if they come from sources (e.g. export credits) which might not otherwise be available to Government.
PRESENT POSITION
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Our plan is to pre-arrange a debt finance package which would be sold by tender to the private sector together with the franchise to operate the LFC in about 1996 (before the bridge is in operation). If we do not use leverage available now through the tender exercise, it might be difficult to arrange a suitable debt finance package later.
Executive Council