XN000022-1977-08-10 — Page 8

WEDNESDAY, AUGUST 10, 1977

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CHIEF SECRETARY GIVES DETAIL EXPLANATION

OF MTR EXTENTION TO TSUEN WAN

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THE ACTING CHIEF SECRETARY, THE HON. PHILIP HADDON-CAVE DEFENDED THE DECISION TO EXTEND THE MASS TRANSIT RAILWAY SYSTEM TO TSUEN WAN DURING THE RESUMED DEBATE IN THE LEGISLATIVE COUNCIL TODAY.

HE ANSWERED THE POINTS RAISED BY THE SEVEN UNOFFICIALS WHO SPOKE DURING THE DEBATE WHICH BEGAN TWO WEEKS AGO, UNDER EIGHT SEPARATE HEADINGS:

CASE FOR AN MTR

ON THE NEED FOR A MASS TRANSIT RAILWAY, MR. HADDON-CAVE SAID OTHER OPTIONS SUCH AS A SURFACE MASS TRANSIT SYSTEM, DOUBLE DECKING THE MAIN ROADS IN THE URBAN AREA, BUILDING MORE AND WIDER ROADS, WOULD EITHER NOT BE SUFFICIENT TO DEAL WITH THE PROBLEM OF CONGESTION, OR WOULD BE MORE COSTLY, OR BOTH,

+FURTHERMORE, MOST OF THESE OPTIONS WOULD NEED TO BE PAID FOR FROM GENERAL REVENUE, WHEREAS THE GREATER PART OF THE COST OF THE MASS TRANSIT RAILWAY WILL BE MET FROM LOANS WHICH WILL BE REPAID FROM REVENUE, + HE SAID.

HE POINTED OUT THAT THE MORE SEVERE RAOD CONGESTION IN LONDON ANY TOKYO DESPITE THE IR EXTENSIVE MASS TRANSIT SYSTEMS WAS CAUSED BY THEIR MUCH HIGHER RATIO OF REGISTERED PRIVATE CARS TO THE POPULATION AND LOW PROPORTION OF PASSENGERS CARRIED BY PUBLIC TRANSPORT.

MTR AS AN INVESTMENT

THE ACTING CHIEF SECRETARY DENIED THAT THE MTR WAS A HUGE GAMBLE, POINTING OUT THAT A DECISION TO PROCEED WITH THE PROJECT WAS TAKEN AFTER YEARS OF STUDY BY TRANSPORT AND ENGINEERING EXPERTS AND FINANCIAL ANALYSTS.

HE POINTED TO THE CONFIDENCE IN THE MTR SHOWN BY INTERNATIONAL BANKERS WHO HAD BACKED THE INITIAL SYSTEM BY PROVIDING ALL THE MEDIUM AND LONG TERM FINANCE AND MORE RECENTLY WERE WILLING TO FINANCE THE TSUEN WAN EXTENSION ON MORE FAVOURABLE TERMS, PREPARING AT THE SAME TIME TO DISPENSE WITH A GOVERNMENT GUARANTEE IN RESPECT OF THAT PORTION NOT COVERED BY EXPORT CREDIT GUARANTEE ARRANGEMENTS.

IF THE MTR WAS EVER A GAMBLE, THE ODDS HAD SHORTENED AND WOULD FURTHER SHORTEN WITH THE TSUEN WAN EXTENSION, MR. HADDON-CAVE SAID. HE EXPLAINED THAT THE EXTENSION WOULD INCREASE THE RATE OF RETURN FOR THE COMBINED SYSTEM FROM 13-1/2 PER CENT TO 15 PER CENT, SO THAT THE CORPORATION WOULD BE IN A POSITION TO REPAY ALL LOANS 10 YEARS AFTER THE OPENING OF THE EXTENSION COMPARED WITH 12 YEARS FOR THE INITIAL SYSTEM ALONE.

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