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Question 7: Mr Tsang, my question pertains to the size of the surplus and to the railroad development scheme. Your surplus for this year came in at a bit over $15 billion. Some people had predicted between 24 and 25 (billion). But I notice that in the MTRC Annual Report there is deferred profit of $9 billion. I am wondering why that wasn't returned to the government as a dividend and I am wondering if it wasn't returned as a dividend because it would have ballooned the size of your surplus?
Mr Donald Tsang: I think that conspiracy theories abound on the accounting arrangement. I have never said about 20 or 25 billion dollars. That has been speculated in the media. I'm sorry in disappointing you by some more reliable forecasts we have made for the coming year. Our forecast is about $15 billion for 1996/97. As far as the dividend from our various corporations is concerned, they give it to me at the time which they think fit. These are statutory bodies not entirely within my control but I can assure you, Francis, there has been no conspiracy at all deliberately trying to fiddle our books for the purpose.
Question 8: I am not suggesting that there was a conspiracy Mr Tsang. I am just wondering whether in fact if it had come over it would have pushed up the size of the surplus and added pressure to you. But the second and perhaps more important point?
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Mr Donald Tsang: Okay, well my colleagues have volunteered to talk about the MTRC. Let me say this. I just want to say that these investments have been made unexpected revenue to come to Hong Kong Government. But you see what is the point of deferring a statement? If I did that, if I deferred it, it would just further increase the surplus I am forecasting for 1997/98. In other words the chicken will certainly come home to roost at some stage wouldn't it?
Mr K C Kwong: On the MTRC profits, in fact I think you are referring to the upfront payment they have received for the property development along the airport railway. But because of the need to abide by the accounting rules established by the Hong Kong Society of Accountants not all of the up front payments can be recognised in the books in the current year, they can only be recognised in phases depending on the progress of the works. So they have already recognised in their books as much as they could but not all of the many billion dollars could be recognised and therefore in assessing the dividend that we should demand from them we can only take into account the profits which they can recognise.
Mr Donald Tsang: There you are. From the mouth of the Director of the MTRC Board.