XN000022-1973-02-14 — Page 3

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Wednesday, February 14, 1973

"This conclusion, in turn, has strengthened the Government's belief

that the system would be financially viable, in the sense that sufficient

cash flow would be generated to enable the capital cost and accumulated

interest to be repaid from the revenue from fares and other sources, over a

given period of years, " he said.

But whatever arrangements were made to finance, construct and equip

the Mass Transit Railway, he went on, a special body would be needed to

implement the project.

Government Supervision

Mr. Haddon-Cave said an entity would also be required to operate

and maintain the system after it was constructed, but in this respect the

sheer size and nature of the project had created requirements which were in a

way "conflicting."

He explained that on the one hand the system would need to be operated

on commercial lines if its financial viability was to be assured.

"On the other hand, the magnitude of the capital requirement, the

length of the construction period, and the important role which the system

will have to play in the Government's overall transport policy in the 1980s,

all point to a greater degree of Government supervision and control than has

hitherto been applied to public utility undertakings in Hong Kong," he said.

With regard to these factors, it had been decided that the operation

of the Mass Transit Railway should be entrusted to a public corporation established

under special Ordinance.

"This corporation

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