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MONDAY, JANUARY 10, 1994
CAUSED SITE
THE SPOKESMAN SAID: "THE INCREASED ESTIMATES ARE MAINLY BY SLIPPAGES WITHIN THE PROGRAMME. FOR EXAMPLE, WHILE THE PAA'S PREPARATION CONTRACT WAS LET WITHIN BUDGET ESTIMATES (AND IS ON SCHEDULE WITHIN THE TERMS OF THE CONTRACT), IT WAS LET SEVEN MONTHS LATE.
AGREEMENT ON
"COUPLED WITH THE CONTINUING DELAY IN REACHING FINANCING ISSUES WITH THE CHINESE SIDE, THIS HAS INEVITABLY DELAYED THE START OF OTHER CONTRACTS TO BE LET IN THE FUTURE.
"CONSEQUENTLY, THE ESTIMATED EFFECTS OF INFLATION HAVE LED TO THESE ESTIMATES ARE BASED, FOR BEING ACREED IN FULL FOR BOTH
HIGHER COST ESTIMATES IN MOD TERMS. CALCULATION PURPOSES, ON FUNDING PROJECTS THIS MONTH.
OF
IN
AT
"FURTHER DELAYS IN REACHING AGREEMENT WITH THE CHINESE SIDE THE AIRPORT COMMITTER WILL LEAD TO THE RISK OF FURTHER INCREASES COSTS. IT IS ESTIMATED THAT THESE COST INCREASES COULD AMOUNT TO LEAST $2 BILLION FOR EVERY SIX MONTHS OF DELAY ON THE AIRPORT, PLUS A SIMILAR AMOUNT ON THE AIRPORT RAILWAY.
**THESE
ECONOMIC
INCREASED COST BURDENS ARE IN ADDITION TO THE DISBENEFITS TO HONG KONG OF DELAYS IN OPENING THE AIRPORT. THE DISBENEFITS HAVE BEEN ESTIMATED TO BE AT LEAST $3 BILLION FOR THE FIRST YEAR ALONE THAT KAI TAK REMAINS OPEN FROM 1997.
"AGAINST THIS BACKGROUND, THE GOVERNMENT NEEDS TO DECIDE WHETHER, AND TO WHAT EXTENT, ADDITIONAL FUNDS SHOULD BE COMMITTED ON THE AIRPORT, A TOTAL OF $14.59 BILLION HAS BEEN APPROVED BY THE FINANCE COMMITTEE SO FAR," THE SPOKESMAN SAID.
POSSIBLE OPTIONS ARE DISCUSSED IN A SECOND PAPER CIRCULATED TODAY TO LEGCO AND AIRPORT CONSULTATIVE COMMITTEE MEMBERS. THE PAPER REAFFIRMS THE GOVERNMENT'S FIRST PRIORITY OF REACHING AN AGREEMENT WITH THE CHINESE SIDE ON THE FINANCING ISSUES AND EXAMINES TWO OPTIONS, IN THE ABSENCE OF AGREEMENT WITH THE CHINESE.
THE SPOKESMAN SAID: "ONE OPTION WOULD BE TO SEEK FUNDING FOR $377 MILLION, WHICH IS THE MINIMUM AMOUNT NEEDED TO EXTEND THE PAA'S HEAD OFFICE FUNDING INTO 1994/95/ THIS WOULD MAINTAIN THE PAA AND ENABLE IT TO CONTINUE TO SUPERVISE DESIGN AND SITE PREPARATION WORK, SO THAT CONSTRUCTION WORK COULD PROCEED AT FULL SPEED ONCE AGREEMENT IS REACHED WITH THE CHINESE SIDE.
NOT
"THE OTHER OPTION IS TO TAKE ANOTHER STEP AND SEEK FUNDING JUST FOR THE PAA'S HEAD OFFICE COSTS, BUT ALSO FOR SOME IMPORTANT WORKS ITEMS. THESE ITEMS, ESTIMATED TO COST $1.29 BILLION, COMPRISE THE DESIGN PHASE OF BAGGAGE HANDLING AND AUTOMATED PEOPLE-MOVER SYSTEMS, FOUNDATION WORKS FOR THE PASSENGER TERMINAL BUILDING, AND VARIOUS CONSTRUCTION SUPPORT FACILITIES.
"THE SECOND OPTION WOULD MAINTAIN THE MOMENTUM TOWARDS COMPLETING THE PROJECT TO THE MAXIMUM EXTENT POSSIBLE BY JUNE 1997."
THESE PAPERS WILL BE DISCUSSED BY MEMBERS OF THE LEGISLATIVE COUNCIL'S SUB-COMMITTEE ON FINANCING OF THE ACP,
THE AIRPORT CONSULTATIVE COMMITTEE ON JANUARY 13.
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