FRIDAY, JANUARY 21, 1994
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FURTHER FUNDING FOR PROVISIONAL AIRPORT AUTHORITY APPROVED
(FRIDAY)
THE FINANCIAL SECRETARY, SIR HAMISH MACLEOD, THIS EVENING WELCOMED THE STRONG SUPPORT SHOWN BY MEMBERS OF THE FINANCE COMMITTEE FOR THE AIRPORT PROJECT WHEN, BY 38 VOTES ΤΟ TWO, THEY APPROVED $1.7 BILLION OF FURTHER FUNDING FOR THE PROVISIONAL AIRPORT AUTHORITY (PAA).
DURING THE MEETING, IN ANSWER TO QUESTIONS FROM MEMBERS OF THE FINANCE COMMITTEE, SIR HAMISH SAID:
"BACK IN MARCH AND APRIL 1992, WE PUT FORWARD PLANS FOR EQUITY IN THE TWO CORPORATIONS. WE PROPOSED $20.3 BILLION INITIAL EQUITY AND UP TO $21 BILLION OF CALLABLE EQUITY TO MEET ANY DOWNSIDE RISKS THAT MIGHT COME UP.
THAT
"UNFORTUNATELY WE WERE UNABLE TO SECURE AN AGREEMENT ON
+ BASIS. THERE THEN FOLLOWED, IN SEPTEMBER 1992, A WELL-PUBLICISED SUGGESTION BY A CHINESE OFFICIAL THAT WE SHOULD USE THE PREMIUM REVENUE FROM THE AIRPORT RAILWAY LAND GRANTS TO FUND THE AIRPORT AND AIRPORT RAILWAY CONSTRUCTION.
"BUILDING ON THAT IDEA, WE FORMULATED A SECOND FINANCIAL PROPOSAL THAT MAINTAINED THE $20.3 BILLION PAID-UP EQUITY IN OUR FIRST PROPOSAL, BUT DROPPED THE CALLABLE EQUITY ELEMENT.
"WE
LAND GRANTS
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PROPOSED THAT ALL OF THE REVENUE FROM THE AIRPORT RAILWAY - SOME $40 BILLION TO BE RECEIVED BETWEEN 1992 AND THE COMPLETION OF THE RAILWAY SHOULD ALSO BE PUT IN ADDITION AS EQUITY INTO THE TWO CORPORATIONS. IN OTHER WORDS, THAT WOULD HAVE INVOLVED BOTH THE HONG KONG GOVERNMENT SHARE AND THE LAND FUND'S SHARE OF THE PREMIA IN EQUAL SHARES THAT IS $20 BILLION FROM EACH.
"OUR
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AGREEMENT TO PUT IN OUR SHARE OF THE LAND REVENUE WAS ON THE UNDERSTANDING THAT OUR NORMAL LAND SALES REVENUE OVER THE PERIOD WAS NOT TO BE REDUCED BY CUTTING THE ANNUAL LAND DISPOSAL PROGRAMMES AGREED EACH YEAR IN THE SINO-BRITISH LAND COMMISSION. SO, THIS AMOUNTED TO $20.3 BILLION FROM OUR RESERVES, AND ABOUT $40 BILLION FROM ADDITIONAL RAILWAY LAND REVENUE,
"UNFORTUNATELY, THIS PROPOSAL WAS NOT ABLE TO SECURE AGREEMENT, EITHER. THERE WAS A RELUCTANCE TO SEE THE LAND FUND OF THE LAND PREMIA USED FOR THIS PURPOSE.
US AN SHARE
"MOVING TO THE MOST RECENT PROPOSAL, IN THE SUMMER OF LAST YEAR, WE DECIDED THAT IT WOULD BE APPROPRIATE TO MAKE A FURTHER EFFORT TO BREAK THE LOG-JAM IN OUR DISCUSSIONS.
"AT THE END OF JUNE WE TOLD THE CHINESE SIDE THAT WE WOULD BE PREPARED то INJECT THE HONG KONG GOVERNMENT SHARE OF LAND PREMIUM REVENUE FROM THE RAILWAY LAND INTO THE TWO CORPORATIONS, NAMELY ABOUT $20 BILLION. THAT WAS SUBJECT TO THE CHINESE SIDE CONFIRMING OUR UNDERSTANDING THAT OUR FORECAST LAND SALES REVENUE WOULD NOT BE REDUCED BY A SIMILAR AMOUNT BECAUSE OF HAVING FUTURE LAND DISPOSAL PROGRAMMES LIMITED BY THE LAND COMMISSION. WE OFFERED A FURTHER SUBSTANTIAL AMOUNT FROM OUR RESERVES TO SUPPLEMENT THE $20.3 EQUITY WE HAD ORIGINALLY PROPOSED.
BILLION
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