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Wednesday, February 28, 1973
SPECIAL FUND FOR MASS TRANSIT RAILWAY
Most of this year's surplus is to be used for setting up a special
Mass Transit Fund.
In his Budget speech today the Financial Secretary, the Hon. C.P.
Haddon-Cave, said he would ask the Finance Committee next month to appropriate
$500 million of the 1972/73 surplus under a new special expenditure subhead relating to the mass transit underground railway project.
If approved, this sum would be credited to a special fund-
established by resolution of the Legislative Council and be used for capital investment in the Mass Transit Railway Corporation, Mr.. Haddon-Cave said.
He said that although the capitalisation of the Corporation would have a high loan gearing, it was intended that the capital element should consist of about $1,500 million in the form of cash,
Of this amount, he added, perhaps two-thirds would be subscribed by the Government during the years of construction of the first four stages of the mass transit scheme and the other one-third by the private sector later on,
"The Government's total equity position would also include expenditure incurred on the scheme to date and the value of Crown land assigned to the Corporation," he said.
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Mr. Haddon-Cave explained that until the fund was exhausted and had disappeared from the Colony's Statement of Assets and Liabilities, "interest on on the matching balances would accrue to General Revenue as would any cash dividends from the equity investment in the Mass Transit Railway Corporation".
The proposal, if approved by the Finance Committee, would have the effect of reducing the revised estimated surplus of $722 million to 3222 million, or more realistically, to $400 million based on the prediction that the surplus might reach $900 million.
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