3 -
"In addition, a full market premium estimated will be paid to the Government for the land grant," he added.
The spokesman pointed out that the terms of the package was the result of lengthy negotiations between the Government, HYF and its parent company, Hong Kong Ferry (Holdings) Company Ltd (HKF).
He said the Government would now be able to proceed with the drafting of a tripartite agreement with HKF and HYF.
On details of the general terms of the pier development package, the spokesman said HKF agreed to pay for the benefit of HYF, whichever was more, $640 million or 60 percent of the sales profit from the disposal of the entire development and 50 per
cent of the rental income to be derived during the franchise period from not less than 20 per cent of the commercial gross floor area of the entire development.
"HYF has agreed to use the money to finance ferry service improvements, to keep future fare increases in line with inflation and to cover the losses that HYF would incur in operating ferry services," he said.
2010.
"HYF has also agreed to apply for an extension of its franchise from 1999 to
"A committee comprising two Government representatives and two HKF/HYF representatives will be set up to ensure that all the cash cask injection is properly applied in accordance with the terms of the tripartite agreement.
"If HYF 'walks away' from its franchise during the term of a franchise, the Government can take possession of the company's assets ferry-related assets valued at $580 million without compensation.
"The arrangements will be enshrined in a tripartite agreement to be signed between the Government, HKF and HYF."
The spokesman reiterated that the package would be of considerable benefit to the community, in terms of HYF's commitment to improve ferry services standards, to. keep fare increases in line with inflation at a reasonable level and to maintain an efficient ferry services at least up to 2010.
With regard to the disposal of the site required for development, approval has been granted by the Land Commission.
End/Tuesday, July 4, 1995