XN000022-1975-05-07 — Page 2

WEDNESDAY, MAY 7, 1975

M.T.R. CORPORATION BILL PASSED

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LEGISLATION SETTING UP THE MASS TRANSIT RAILWAY CORPORATION TO BUILD AND RUN THE $5,800 MILLION MODIFIED INITIAL SYSTEM WAS FORMALLY PASSED IN LEGISLATIVE COUNCIL TODAY, REMOVING THE LAST LEGAL HURDLE TO THE GIGANTIC PROJECT.

ONLY ONE UNOFFICIAL MEMBER, THE HON. LO TAK-SHING, VOTED AGAINST THE BILL WHICH WILL COME INTO EFFECT ON A DATE TO BE APPOINTED BY THE GOVERNOR,

THE BILL WAS PASSED WITH THREE AMENDMENTS. THE FIRST VESTED THE AUTHORITY FOR GOVERNMENT GUARANTEES OF THE CORPORATION'S BORROWINGS IN THE LEGISLATIVE COUNCIL, INSTEAD OF IN THE EXECUTIVE COUNCIL.

THE SECOND EMPOWERED THE GOVERNOR TO GIVE DIRECTIONS OF A GENERAL CHARACTER TO THE CORPORATION IF HE CONSIDERED THAT THE PUBLIC INTEREST SO REQUIRED. THIS PROVISION IS DESIGNED FOR EXCEPTIONAL CIRCUMSTANCES, NOT EVERY DAY USE, AND THE GOVERNOR WOULD BE ASSISTED BY THE EXECUTIVE COUNCIL BEFORE EXERCISING THIS POWER.

THE THIRD AMENDMENT REMOVED STAMP DUTY ON THE TRANSFER OF PROPERTY FROM THE PROVISIONAL AUTHORITY TO THE CORPORATION. THIS EXCEMPTION APPLIES ONLY TO THAT TRANSFER AND THE CORPORATION ITSELF WILL BE SUBJECT TO TAXATION IN THE SAME WAY AS OTHER COMMERCIAL UNDERTAKINGS.

IN MOVING THE SECOND READING OF THE BILL, THE ACTING ATTORNEY GENERAL, THE HON. G.C. THORNTON, RE-ITERATED THE GOVERNMENT'S FIRM BELIEF THAT THE UNDERGROUND RAILWAY IS A VITAL NECESSITY TO HONG KONG IN ORDER TO AFFORD MAXIMUM RELIEF FROM CONGESTION ON THE ROADS IN THE YEARS AHEAD.+

IT WAS RECOGNISED, HOWEVER, THAT THE SYSTEM WAS BUT A VALUABLE PALLIATIVE - NOT A CURE TO HONG KONG'S TRANSPORT PROBLEM, HE ADDED.

ON THE VIABILITY OF THE SYSTEM, MR. THORNTON EMPHASISED THAT THIS HAD CONSISTENTLY BEEN AT THE HEART OF GOVERNMENT THINKING FOR THE PAST THREE YEARS AND THE GOVERNMENT WAS CONVINCED THAT THE SYSTEM WAS VIABLE,

AS TO THE ESTIMATED COST OF THE PROJECT, MR. THORNTON SAID THIS HAD BEEN PREPARED ON CONSERVATIVE LINES, INCLUDING PROVISION FOR BOTH COST ESCALATION AND UNFORESEEN CONTINGENCIES.

SINCE THE ESTIMATES WERE PREPARED FIVE MONTHS AGO, WORLD INFLATION HAD SLOWED DOWN AND LOCAL BUILDING COSTS HAD FALLEN, HE SAID. +THERE ARE GOOD REASONS THEREFORE TO BELIEVE THAT THE ESTIMATE FOR THE TOTAL CONTRACT PRICE AND NON-CONTRACTUAL COSTS OF $5,800 MILLION REMAINS CONSERVATIVE.+

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