XN000022-1984-02-29 — Page 7

WEDNESDAY, FEBRUARY 29, 1984

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SIR JOHN SAID REVENUE FROM PRIVATE TREATY GRANTS HAD FALLEN MARKEDLY BELOW EXPECTATIONS IN FISCAL 1983, PRINCIPALLY BECAUSE OF THE RESCHEDULING OF THE DATES ON WHICH SITES ON THE ISLAND LINE WERE TO BE GRANTED TO THE MASS TRANSIT RAILWAY CORPORATION.

HE POINTED OUT THAT THE ESTIMATED TOTAL LAND REVENUE FOR FISCAL 1984 WOULD BE CONSIDERABLY DISTORTED BY THE FINAL INSTALMENT PAYMENT DUE OF $1.9 BILLION IN RESPECT OF EXCHANGE SQUARE.

+OTHERWISE THE TOTAL LAND REVENUE -- WHICH DOES NOT REPRESENT ONLY LANDS SALES SHOULD BE OVER $2 BILLION, MUCH THE SAME AS I NOW EXPECT TO RECEIVE IN RESPECT OF 1983-84, + HE SAID.

SIR JOHN SAID THE 1984-85 LAND SALES PROGRAMME WOULD MAINTAIN THE DISTINCTION BETWEEN SITES INTENDED TO BE PUT ON SALE DURING THE YEAR (33 HECTARES) AND SITES TO BE PUT ON SALE ONLY IF A DEVELOPER INDICATED A FIRM INTEREST (32.1 HECTARES).

HE ANTICIPATED REVENUE OF $730 MILLION FROM SALES BY AUCTION OR TENDER, $1 BILLION FROM PRIVATE TREATY GRANTS, AND $570 MILLION FROM MODIFICATIONS AND REGRANTS.

THE GOVERNMENT, HE EXPLAINED, HAD DECIDED IN 1983 THAT FROM APRIL 1, 1984, LETTERS B WOULD BE MONETISED AND THEIR USE EXTENDED TO PAY FOR LAND PURCHASES AT AUCTIONS AND IN TENDERS FOR PRIVATE TREATY GRANTS, FOR MODIFICATIONS AND EXCHANGES AND FOR OTHER LAND-RELATED TRANSACTIONS IN THE NEW TERRITORIES.

HE SAID THAT IT WAS AGREED AT THE SAME TIME THAT, EXCEPTIONALLY, CONSIDERATION WOULD BE GIVEN TO OFFERING CERTAIN MAJOR SITES IN THE URBAN AREA WHERE PAYMENT BY MONETISED LETTERS B WOULD BE ACCEPTABLE.

+TWO OF THESE HAVE BEEN INCLUDED IN THE 1984-85 PROGRAMME. IT IS ESTIMATED THAT LETTERS B TO THE VALUE OF ROUGHLY $400 MILLION MIGHT BE REDEEMED IN THE COMING YEAR AS A RESULT OF MONETISATION. THE ESTIMATE OF REVENUE RECEIVABLE HAS BEEN REDUCED ACCORDINGLY, HE SAID.

THE TOTAL ESTIMATED LAND REVENUE OF $4.2 BILLION IN 1984-85 WOULD UNLIKELY BE REPEATED IN THE FOLLOWING YEAR, HE SAID.

+BEARING IN MIND THAT THIS ESTIMATE INCLUDES THE EXTRAORDINARY INSTALMENT PAYMENT OF $1.9 BILLION AND THE PAYMENTS OF PRIVATE GRANT PREMIA FOR THE ISLAND LINE, LAND REVENUE IN 1985-86 CANNOT BE EXPECTED TO BE ABOVE $2 BILL FON. CONSIDERABLE REDUCTION IN PROBABLE REVENUE FOR 1985-86 HAS OBVIOUS IMPLICATIONS FOR NEXT YEAR'S BUDGET, SIR JOHN WARNED.

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