45
WEDNESDAY, APRIL 1, 1992
The planned financial arrangements for new Airport and
the Airport Railway are based on a Government equity investment of $13.6bn into the Airport Authority and $3bn
into the MTRC.
The government will also provide support in other ways,
for example by following past practice of granting land to the MTRC at full market value so that profits from property development can be used to reduce the need for Government equity.
As the
the MTRC,
sole
the
shareholder of the Airport Authority and
government must also ensure that the
corporations have a sufficiently comprehensive financial package to enable them to raise loans in the private sector
without needing Government guarantees. This involves demonstrating, as a form of insurance, that the Government
will provide necessary financial support in the most
adverse circumstances.
It has been decided that the most cost-effective form
of insurance is for the Government to provide "callable equity", which can be drawn on by the corporations in such circumstances. This has been estimated at $5.9bn (1991
prices) for the Airport and about $7bn for the Airport Railway. These figures are not shown in the table of costs because they are only contingent liabilities.
are
Details of the latest government estimates and plans included in a paper, An Update on the Financial Aspects
of the Airport Core Programme. This paper has been
presented to the Airport Committee and is to be discussed
tomorrow (Thursday) morning at meetings of the LagCo Ad Hoc Group and the Airport Consultative Committee.
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