CONFIDENTIAL
quality of management and a proven ability to perform on price and time. There is strong UK interest in 3 of the groups, one, involving Costain and Trafalgar House, another led by Balfour Beatty and the third involving Mowlem.
Airport Project Costs
3. The revised estimate for the cost of the airport
platform, the airport and its equipment is HKD 43.6 bn (at
March 1991 prices). This is an increase of 15% over the
1990 estimate of HKD 37.8 bn, although the cost of the
airport care project as a whole has gone up by only 1.6%
from HKD 97 bn to HKD 98.6 bn. Part of the reason for the
increase in the cost of the airport could be due to the
decision to increase the size of the platform from 1000 to
1275 hectares and to establish a runway separation of 1525
metres.
Airport Financing
4. The cost of the airport platform, airport and equipment will be financed as follows: HKD 13.8 will be in the form of
an equity contribution by Hong Kong Government, HKD 3.9 bn
will be cost of Government facilites including air traffic
control and control tower etc. Private investment in such
facilities as cargo and catering will amount to HKD 10 bn.
The remainder, HKD 15.9 bn will be debt.
5. In tendering for the platform contract the PAA would be looking for finance proposals for up to HKD 2 bn. The financial aspects are of major concern. Mr Allen will tell Ministers that the project is separate from HKG and will be independentally run. He has told Heap (BTC) that he wishes to concentrate on this aspect in his discussion with Ministers. There will no government guarantees from Hong Kong for the platform and lending will be against the project on a commercial risk basis. He will be meeting Malcolm Stevens (ECGD) to discuss financial support for the project.
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CONFIDENTIAL