XN000022-1988-06-08 — Page 2

WEDNESDAY, JUNE 8, 1988

PURPOSES OF TATE'S CAIRN TUNNEL BILL OUTLINED

THE TATE'S CAIRN TUNNEL BILL 1988, WHICH SEEKS ΤΟ STATUTORY EFFECT ΤΟ THE TUNNEL FRANCHISE AND TO DETERMINE OBLIGATIONS THAT THE TATE'S CAIRN TUNNEL COMPANY MUST PERFORM, INTRODUCED INTO THE LEGISLATIVE COUNCIL TODAY (WEDNESDAY) BY SECRETARY FOR TRANSPORT, THE HON MICHAEL LEUNG.

GIVE

THE

WAS

THE

MOVING THE SECOND READING OF THE BILL, MR LEUNG SAID THE TUNNEL WOULD BE FINANCED AND CONSTRUCTED BY THE COMPANY FORMED BY A CONSORTIUM OF BRITISH, CHINESE, JAPANESE AND LOCAL BUSINESS INTERESTS.

IN RETURN, THE COMPANY WOULD BE GIVEN A FRANCHISE TO OPERATE THE TUNNEL FOR 30 YEARS FROM THE START OF CONSTRUCTION.

THE BILL ALSO STIPULATED THAT THE CONSTRUCTION TUNNEL WOULD BE 37 MONTHS.

PERIOD OF THE

MR LEUNG SAID THE BILL HAD 11 PARTS AND WAS MODELLED ON THE EASTERN HARBOUR CROSSING ORDINANCE.

PARTS I TO V DEALT WITH THE LENGTH OF THE FRANCHISE, COMPANY STRUCTURE AND THE METHOD BY WHICH THE COMPANY SHOULD ROYALTIES TO GOVERNMENT, MR LEUNG SAID.

TILE

PAY

THE RATE OF ROYALTY WAS 2.5 PER CENT OF OPERATING RECRIPTS FOR THE FIRST FIVE YEARS AND FIVE PER CENT THEREAFTER. IN ADDITION, THE COMPANY SHOULD PAY A FURTHER ROYALTY IF THE NET OPERATING RECEIPT EXCEEDED THE AMOUNT PROJECTED.

THE GOVERNMENT WOULD HAVE THE RIGHT TO APPOINT TWO DIRECTORS TO THE BOARD OF THE COMPANY.

PARTS VI AND VII PROVIDED FOR THE REMEDY OF DEFECTS BY THE COMPANY AND ITS OBLIGATION TO KEEP THE TUNNEL IN A STATE OF REPAIR TO THE SATISFACTION OF THE DIRECTOR OF HIGHWAYS.

THEY ALSO EMPOWERED THE GOVERNOR IN COUNCIL TO MAKE REGULATIONS GOVERNING THE SAFE AND EFFICIENT OPERATION OF THE TUNNEL, AND TO TAKE OVER THE TUNNEL IN THE INTEREST OF PUBLIC SECURITY.

THEY ALSO PROVIDED THE COMMISSIONER FOR TRANSPORT POWER TO INSPECT THE TUNNEL AND FOR BY-LAWS TO BE DRAWN UP AND APPLIED IN THE TUNNEL AREA, SUBJECT TO APPROVAL BY THE LEGISLATIVE COUNCIL.

PART VIII DEALT WITH TOLLS, AND MR LEUNG SAID, THE BILL SPECIFIED A TOLL REVIEW MECHANISM.

"ANY TOLL INCREASE WILL NEED THE CONSENT OF THE GOVERNOR IN COUNCIL AND WILL NOT BE GRANTED AS LONG AS THE TUNNEL COMPANY REMAINS REASONABLY REMUNERATIVE," HE SAID.

/"THE INITIAL