TUESDAY, JUNE 11, 1985
THE RECENT IMPROVEMENT IN LAND PRICES COUPLED WITH PAYMENTS FOR LAND PURCHASES IN CASH, RATHER THAN LETTERS 'B', HAS RESULTED IN AN UNEXPECTED FLUSH OF LAND REVENUE.
EVEN ON CONSERVATIVE PROJECTIONS, HE SAID, THE ESTIMATE OF LAND REVENUE INCLUDED IN THE BUDGET IS NOW LIKELY TO BE EXCEEDED BY AT LEAST $1 600 MILLION.
THE SPOKESMAN ALSO EMPHASISED THAT THE PROPOSED INJECTION WOULD NOT AFFECT THE GOVERNMENT'S BUDGETARY SITUATION.
+THE BUDGET OUTTURN FOR 1985-86 WILL NOT, THEREFORE, BE ADVERSELY AFFECTED, HE SAID.
WHILE THE TOTAL INJECTION FIGURE IS $5 000 MILLION, ONLY HALF IS TO BE FULLY COMMITTED IN ADVANCE. INJECTION OF THE REMAINDER WILL DEPEND ON FUTURE INTEREST RATES AND THE MTRC'S ACTUAL REVENUE RECEIPTS.
ONE OF THE MOST IMPORTANT FACTORS WHICH AFFECTED THE MTRC'S PROFITABILITY, HE SAID, WAS CHANGES IN INTEREST COSTS.
+A MOVEMENT OF ONE PER CENT A YEAR IN FLOATING RATE COSTS WOULD VARY THE CORPORATION'S ANNUAL PROFITS BY WELL IN EXCESS OF $100 MILLION, HE SAID.
THE SPOKESMAN SAID THAT FURTHER SUPPORT FOR THE MTRC WAS NECESSARY BECAUSE OF SHORTFALLS IN ANTICIPATED PATRONAGE AND PROPERTY DEVELOPMENT.
PATRONAGE AND REVENUE HAVE FALLEN SHORT OF EARLIER PREDICTIONS PRINCIPALLY BECAUSE BUSES OPERATING ON ROADS WHICH BECAME LESS CONGESTED AFTER THE MTR COMMENCED OPERATING HAVE TRIPLED THEIR CARRYINGS OVER A PERIOD OF FOUR YEARS, AND MTR FARES HAVE BEEN INCREASED LESS RAPIDLY THAN FORECAST.
THE 1984 REVENUE SHORTFALL, COMPARED WITH PREDICTIONS MADE IN 1977, WAS 37 PER CENT AND THE AGGREGATE SHORTFALL SINCE THE MTR FIRST STARTED CARRYING PASSENGERS AMOUNTED TO NEARLY $1 000 MILLION.
THE SPOKESMAN ALSO POINTED OUT THAT UP TO THE END OF LAST YEAR PROPERTY DEVELOPMENT FOR THE ISLAND LINE HAD YIELDED MUCH LESS THAN FORECAST IN 1980, EVEN WITH RECENT IMPROVEMENT IN LAND PRICES INCOME IS LIKELY TO FALL SHORT OF PROJECTIONS.
THE SPOKESMAN SAID THE PROPOSALS FOR THE ADDITIONAL INJECTION OF EQUITY WERE ACCEPTED BY THE EXECUTIVE COUNCIL TODAY (TUESDAY), AND WOULD BE PUT TO THE OPEN SESSION OF THE FINANCE COMMITTEE OF THE LEGISLATIVE COUNCIL ON JUNE 26.
/HE SAID:
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