XN000022-1975-01-14 — Page 3

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TUESDAY, JANUARY 14, 1975

SECOND. THE JAPANESE CONSORTIUM ARGUED THAT THEIR DIFFICULTIES STEMMED FROM CERTAIN UNFORESEEN DEVELOPMENTS THAT HAD AFFECTED THE JAPANESE ECONOMY AS A RESULT OF THE OIL CRISIS IN LATE 1973 AND EARLY 1974. HOWEVER, THE FACT REMAINS THAT THE EFFECTS OF THE OIL CRISIS MUST HAVE BEEN APPARENT TO THE CONSORTIUM DURING THE PERIOD BETWEEN THE HONG KONG GOVERNMENT'S ACCEPTANCE OF THE CONSORTIUM'S PRE-EMPTIVE BID (11 DECEMBER 1973) AND THE SIGNING OF THE LETTER OF INTENT (15 FEBRUARY 1974). THE PROVISIONAL AUTHORITY HAD NATURALLY ASSUMED THAT THESE DEVELOPMENTS HAD BEEN FULLY TAKEN INTO ACCOUNT DURING THE PERIOD PRECEDING THE SIGNING OF THE LETTER OF INTENT. THE CONSORTIUM COULD HAVE WITHDRAWN OR ASKED FOR MODIFICATIONS IN THE TERMS OF THE LETTER OF INTENT DURING THIS PERIOD.

THIRD, BY THE TERMS OF THE LETTER OF INTENT THE CONSORTIUM EXPLICITLY UNDERTOOK TO PROVIDE DESIGN SOLUTIONS AND PROPOSALS THAT WOULD ADEQUATELY MEET THE PROVISIONAL AUTHORITY'S DESIGN AND PERFORMANCE REQUIREMENTS. IN SPITE OF CONSTANT REQUESTS FROM THE PROVISIONAL AUTHORITY IT WAS NOT UNTIL HID-NOVEMBER 1974, NINE MONTHS AFTER THE SIGNING OF THE LETTER OF INTENT. THAT THE CONSORTIUM PRODUCED A PACKAGE OF DESIGN SOLUTIONS. THIS PACKAGE, WHICH THE CONSORTIUM CALLED A +BASIC PLAN+, WAS THOROUGHLY EXAMINED BY THE PROVISIONAL AUTHORITY'S CONSULTING ENGINEERS, THE MASS TRANSIT DEPARTMENT OF THE PUBLIC WORKS DEPARTMENT AND THE ENGINEERING OFFICERS DESIGNATE OF THE FUTURE MASS TRANSIT RAILWAY CORPORATION. THE DESIGN SOLUTIONS AND PROPOSALS PROVED TO BE INADEQUATE AND INCOMPLETE COMPARED WITH THE PROVISIONAL AUTHORITY'S SPECIFICATIONS AND, IN SOME CASES, UNSUITED AND EVEN * IRRELEVANT TO HONG KONG'S CONDITIONS.

THE FUTURE

THE GOVERNMENT IS CONVINCED THAT IF HONG KONG'S FUTURE TRANSPORT NEEDS ARE TO BE MET IT MUST HAVE A MASS TRANSIT RAILWAY.

THE NEED FOR THE MTR IS ESSENTIALLY BASED ON THE GROWING DEMAND FOR MOVEMENT FROM AN EXPANDING POPULATION WHICH, EVEN GIVEN THE MOST DRACONIAN RESTRAINTS ON OTHER THAN PUBLIC TRANSPORT, WOULD PRODUCE UNACCEPTABLE CONGESTION IN THE GREATER PART OF THE URBAN AREA IN THE 80S AND 90S. THE EXPECTATION IS THAT, EVEN IF ALL TRAFFIC OTHER THAN LARGE BUSES ARE BANNED FROM THE MAIN ROUTES IN THE AREAS TO BE SERVED BY THE RAILWAY (WHICH WOULD BE AN IMPRACTICABLE RESTRAINT), THERE WOULD NOT BE ENOUGH SPACE FOR THE BUSES TO PICK UP AND SET DOWN PASSENGERS AND TO MANOEUVRE WITHOUT CREATING UNACCEPTABLE CONGESTION. IN SUCH CIRCUMSTANCES,

IN SUCH CIRCUMSTANCES, ONLY AN UNDERGROUND RAILWAY WOULD PROVIDE A RELIABLE AND SPEEDY MEANS OF TRANSPORTING LARGE NUMBERS OF PEOPLE IN THE AREAS IT WOULD SERVE, AS WELL AS HELPING TO RELIEVE CONGESTION ON THE SURFACE AS HAS BEEN THE EXPERIENCE IN RECENT YEARS IN A GROWING NUMBER OF CITIES.

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/THIS CONCLUSION

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