Wednesday, June 7, 1972
will have to be increased as the programme is updated. The fact is that the
mass transit railway when fully completed will cater for only one third of
public passenger journeys that people are expected to make by the mid-1980s
(about 21⁄2 million journeys out of a total of 7 million) although, admittedly,
it will carry about half of all passengers in the more densely populated areas
where the railway will run. In doing so, efficiently and swiftly, it will
enable us to maintain that degree of mobility of people and goods vehicles
without which our economic and social life would be endangered.
Good Chance
"Secondly, the Government has decided that there is a good chance
that three of the four questions I posed in my winding up speech in the budget
debate, and which I said had to be answered before a decision could be taken
whether or not to go ahead the Government has decided that three of these
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four questions can be answered affirmatively.
That is to say, we believe,
first, that a substantial sum of public money can be committed to assist in
financing the project; secondly, that the railway can be constructed without
undue diaruption; and thirdly, that the system can be operated in such a way
as to generate a sufficient cash flow to service the investment and cover
operating costs. So the way is now clear to see whether an affirmative answer
can be given to the fourth question, namely, whether sufficient outside capital
finance can be obtained on appropriate terms as regards interest rates and
repayment arrangements. To some extent the possibility of raising finance
will depend on how much finance has to be found. On the basis of mid-1970
prices, we reckon that the minimum net capital requirement will be $5,000 million.
/But