As far as the Memorandum of Understanding on that part is concerned, yes, there is а limit. But it is a limit in respect of outstanding debt left to be repaid by the SAR government. It is not a limit on how much we can borrow. Between now and 1992-1997
we can borrow-repay and borrow-repay, roll over, continue doing that. There is no limit on that.
The limit is how much debt remaining to be repaid on the 30th of June, 1997, which falls to be repaid by the SAR Government. That limit is five billion and we need not consult. But if we want to raise that limit above five billion dollars
we would need to consult through the Airport Committee.
Question 2:
yes,
What per cent of the loans
loans do you expect will be Airport Authority loans which are guaranteed by the government? Wouldn't that be a fairly high percentage of the loans which
would, therefore, need approval from China? Why are banks going to want to lend? Otherwise you will have to put a major equity injection into the Airport Authority in order to get attractive rates.
Answer: Mr Yeung:
Our contribution to the Airport Authority's equity will be quite considerable. It will run into billions of dollars.
Can you give us a ball park figure?
Question 3:
Answer: Mr Yeung:
We are still trying to work this out. It depends, of course, on the Airport's Authority's own business plan. I will come to that later. But to give you an example of what happened with the Mass Transit Railway Corporation the Mass Transit Railway Corporation borrowed from 1975 onwards, and is still borrowing. But the general pattern has been for banks to lend and for only a part of the MTRC's borrowings to be covered by guarantee.
Now in the early years before the MTRC started generating income, quite a bit of those borrowings were covered by guarantee. Soon after the MTRC came into operation and started generating income а lot of those loans did not require guarantee. In fact, at the present time the MTRC has outstanding debt of some 18 billion dollars of which less than two billions are covered by guarantee.
Mrs Chan:
Could I add to that? I think that at this stage you must not assume that the Airport Authority would wish the Hong Kong Government to guarantee any of its borrowings. Indeed, we would very much hope that, with the certainty that we now have,
we now have, that we can proceed in an expeditious manner with the airport project, plus international confidence in investments, and,
and, more specifically, the Chinese support for these projects, and given that the revenue streams due to the Airport Authority would, we believe, be very robust, that the Airport Authority could well borrow on its Own without any specific government guarantees.
Question 4:
Can you give us some idea of the extent of what the capital injection will be, whether equity injections into the Airport Authority? You know, we are talking, um, a minimum of 30 billion, 50 billion?
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