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TUESDAY, AUGUST 20, 1974
REFERRING TO SUGGESTIONS IN SOME QUARTERS THAT THE MASS TRANSIT PROJECT SHOULD BE ABANDONED IN VIEW OF HONG KONG'S OTHER COMMITMENTS, MR. HADDON-CAVE SAID THAT WOULD NOT HELP VERY MUCH.
HE EXPLAINED THAT THE CREDIT LINES AND THE LOAN FINANCE AVAILABLE FOR A COMMERCIALLY VIABLE PROJECT LIKE THE UNDERGROUND RAILWAY CERTAINLY WOULD NOT BE AVAILABLE FOR HOUSING, MEDICAL SERVICES AND SCHOOLS.
HE NOTED THAT ABOUT THREE QUARTERS OF THE $800 MILLION OF THE MASS TRANSIT FUND HAD NOT DEEN SPENT OR COMMITTED.
+BUT,+ HE SAID, +SIMPLY BECAUSE EVERYTHING ELSE CANNOT BE DONE AT ONCE IS NO GOOD REASON FOR ABANDONING THIS LONG PLANNED PROJECT.+
HE CONTINUED: THE ARGUMENTS FOR AN ADDITIONAL, SUB- SURFACE, PUBLIC TRANSPORT SYSTEM REMAIN AS COGENT AS EVER AND IT IS THOROUGHLY BAD ADMINISTRATIVE PRACTICE TO CHANGE ONE'S MIND AFTER THE EVENT IN RESPONSE TO OTHER UNRELATED DIFFICULTIES.+
TURNING TO THE PROBLEM OF FINANCING THE MASS TRANSIT RAILWAY, MR. HADDON-CAVE SAID THAT TOWARDS THE CONTRACT PRICE OF $5,000 MILLION, THE JAPANESE CONSORTIUM HAD AGREED TO PROVIDE ABOUT $3,000 MILLION IN THE FORM OF EXPORT CREDITS.
HE SAID THE CONSORTIUM WAS CURRENTLY ENTERING INTO NEGOTIATIONS WITH THE JAPANESE EXIM BANK.
+I HAVE NO REASON TO BELIEVE THAT THESE EXPORT CREDITS WILL NOT BE FORTHCOMING PARTICULARLY AS THE HONG KONG GOVERNMENT HAS AGREED TO GIVE A GUARANTEE FOR THE REPAYMENT OF THIS SUM, INCLUDING INTEREST, BY THE CORPORATION,+ HE SAID.
MR. HADDON-CAVE SAID THE REMAINING $2,000 MILLION WOULD HAVE TO BE RAISED FROM INTERNATIONAL MONEY HARKETS IN THE NEXT FEW YEARS, IN THE FORM OF BONDS AND PARTLY IN THE FORM OF SYNDICATED BANK LOANS.
!
HE SAID HE WAS CONFIDENT THAT THE MARKETS COULD BE PERSUADED BY HONG KONG'S POLITICAL STABILITY, THE PRUDENCE OF ITS FISCAL POLICIES AND ITS DETERMINATION THAT THE PROJECT WOULD PAY FOR
ITSELF TO MAKE THE EXERCISE A SUCCESSFUL ONE.
ON THE QUESTION OF WHY. THE GOVERNMENT CHOSE THE JAPANESE CONSORTIUM, MR. HADDON-CAVE SAID THAT THE CONSORTIUM WAS THE ONLY ONE OFFERING A FIRM PRICE WITHIN THE GOVERNMENT'S CEILING OF $5,000 MILLION WITHOUT SUBSEQUENT COST ESCALATION OF ANY KIND.
THE OTHER BIDS SUBMITTED HIGHER CEILING PRICES.
/SECONDLY, **