1965-HKRS30-8-55_Part05 — Page 5

CROSS HARBOUR TUNNEL.

Resolution made and passed by the Legislative Council on the 11th day of August, 1965.

Resolved that this Council approves in principle the grant of a franchise to construct and operate a tunnel across the harbour between Wan Chai and Hung Hom in accordance with the basic conditions set down in the Schedule.

SCHEDULE

(1) The Victoria City Development Company (or such other company es may with the approval of the Company and Government be substituted for it) (hereinafter referred to as "The Company") to be granted an exclusive franchise to construct and operate a four-jane vehicular tunnel between Wan Chai and Hung Hom.

(2) The franchise to bear no rights for the construction of a second tunnel on

the same or any other route.

(3) The franchise to run for 30 years from the date (hereinafter referred to as the "start of construction") on which permission is given by Government to commence physical_construction works on the tunnel slid. There is to be no right of renewal thereafter.

(4) (a) A. royalty of 124% on gross operating receipts to be payable for the period of the franchise provided that on application by the Company the annual cash payment during the first ten years of operation of the tunnel, may be reduced so that it less than 121%, but not less than 74%. Any arrangements for reduced royalty are to be reviewed annually. The difference between the amount due at 124% and the actual cash payment at the reduced rate to be credited to Government in the accounts of the Company and the balance to sam compound interest at 7% per annum compounded quarterly. This account to be liquidated not less than 5 years before the end of the franchise.

(6) Royalty payments to be paid quarterly in arrears within one month

of the quarter to which the operating receipts relate.

(e) "Operating receipts" to include all revenue received by the Company in consideration of goods and services offered but to exclude income earned on investments and interest received on current assets.

(5) (a) Government is to assume liability for any compensation which it may be decided to pay to the ferty companies arising from the 1956 Government statement.

(6) The Hong Kong and Yaumati Ferry Company Limited and the Star

Ferry Company Limited to be given the option of laking up to 1% each of the equity capital of the Company. In the event that either ferry_company" does not take up the option in full the difference may be offered to the other ferry Company. All options are to be kept open for one month from the date of offer.

(6) The Company to pay from the start of construction an annual rent of $75,000 to Government for way-leave over the Crown land Gincluding sea-bed) occupied by the tunnel itself and its approaches as determined under sub-paragraphi (25) below, subject to Government retaining full development rights over the land in question to the extent that such