13
Air Traffic Control Charges
44.
As mentioned in paragraph 20(c), the Government will defer requiring payment by the AA of charges for air traffic control and meteorological services at the airport for SO long as is necessary to enable the AA to meet its debt service obligations. The charges will only be deferred; the АА will repay Government in full, in due course, including interest.
Summary and Conclusion
45.
The Government's objective has been to complete the airport project in the most cost-effective way possible. In order to do this, it is necessary to optimize the benefits of drawing on funding support from non-Government sources. The creation of the PAA/AA provides an appropriate vehicle for raising debt through syndicated loans, export credit and other financial instruments.
It is pertinent
46. PAA/AA and
to note that the position of the the nature of the airport project are fundamentally different in
many respects from the MTRC and the airport rail project. The PAA/AA, unlike the MTRC, is a new corporation with no financial track record. For the airport project, pre-completion risks are of greater significance than for the airport rail, since during this period the PAA/AA will have no major revenues of its own to cushion adverse events (in contrast to the MTRC). On the other hand, after completion, the AA will have a relatively secure revenue stream (inheriting Kai Tak's traffic).
47.
Independent financial advisers have concluded that the project cashflowS expected are likely to be robust enough to enable the AA to raise a substantial amount of debt without requiring a full Government guarantee. The same cashflows forecast the provision of an attractively high level of return on the equity which the Government will need to provide.
·
a
48.
In order to enable the AA to raise the amount of debt required
range of Government support measures falling short of providing full debt guarantees will, nevertheless, be required. The package of support measures proposed is designed to avoid all but the most theoretical of
contingent Government liabilities which might continue to exist beyond 30 June 1997. circumstances, it is Government contingent fall away before then.
expected funding
In all but the most severe that the liability for any support for the project will