XN000022-1991-07-19 — Page 4

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FRIDAY, JULY 19, 1991

IN ADDITION, THE AIRPORT RAILWAY WAS COSTED AT $12.5 BILLION. THE FIGURE EXCLUDES THE COST OF THE RAIL RESERVE IN THE LANTAU FIXED CROSSING AND THE NORTH LANTAU EXPRESSWAY WHICH IS INCLUDED IN THE ROUGH ORDER OF COSTS OF THESE TWO PROJECTS. THE COST WILL BE RECOVERED FROM THE OPERATOR OF THE AIRPORT RAILWAY IN DUR COURSE.

TO SUPPORT THE AIRPORT RAILWAY, PART OF THE CENTRAL AND WAN CHAI WATERFRONT WILL NEED TO BE RECLAIMED AT A COST OF $1.8 BILLION.

THE GRAND TOTAL OF $98.6 BILLION EXCLUDES CONTINGENCY PROVISION FOR ANY ACCELERATION OF WORKS THAT MAY BECOME NECESSARY TO ENSURE THE PROPER INTERFACING AND INTEGRITY OF THE PROGRAMMING WORKS UNDER THE ACP.

OF

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AND

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"THE GOVERNMENT'S FINANCING STRATEGY FOR THE ACP AIMS TO OVERALL COSTS DOWN WHILE ACHIEVING AN EFFICIENT AIRPORT SUPPORTING INFRASTRUCTURE IN THE MOST COST EFFECTIVE MANNER; AND PUBLIC SECTOR COSTS TO THE MINIMUM BY ENCOURAGING PRIVATE SECTOR PARTICIPATION WHERE THIS MAKES FINANCIAL SENSE,' THE PAPER SAID.

FOUR PROJECTS HAD PARTICULAR POTENTIAL FOR PRIVATE SECTOR PARTICIPATION: THE NEW AIRPORT, THE LANTAU FIXED CROSSING, THE AIRPORT RAILWAY AND THE WESTERN HARBOUR CROSSING.

THE FINANCIAL ASSESSMENT OF THE LANTAU FIXED CROSSING HAD SHOWN THAT IT WOULD BE MORE RELIABLE, AND PROBABLY CHEAPER OVERALL, TO BUILD THE CROSSING AS A GOVERNMENT PROJECT RATHER THAN A PRIVATISED ONE.

THE OF THE

HOWEVER, THE GOVERNMENT MAY SELL A FRANCHISE TO OPERATE CROSSING, PARTLY OR WHOLLY, AT OR NEAR THE TIME OF COMPLETION WORKS.

THE FINANCIAL ASSESSMENT OF THE AIRPORT RAILWAY, COMPLETED EARLY THIS YEAR, HAD SHOWN THAT THE PROSPECTIVE OPERATOR, THE MASS TRANSIT RAILWAY CORPORATION, WOULD REQUIRE SOME FINANCIAL SUPPORT, SUCH AS ADDITIONAL EQUITY FROM THE GOVERNMENT, IF THE RAILWAY IS TO BE COMMISSIONED AT THE SAME TIME AS THE AIRPORT.

FOR A

THE AMOUNT MIGHT BE MINIMISED IF COMPLETION WAS DELAYED FEW YEARS. FOR ABOUT THREE YEARS AFTER THE OPENING OF THE NEW AIRPORT ROADS COULD HANDLE TRAFFIC.

HOWEVER, THIS WOULD INCREASE CONGESTION ALONG THE NATHAN ROAD CORRIDOR, LAND PREMIA WOULD BE LESS IN LANTAU AND THE OPERATION OF THE AIRPORT AND BUSINESSES MIGHT BE ADVERSELY AFFECTED. NEGOTIATIONS WITH THE MTRC WILL START SOON, THE PAPER SAID.

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THE FINANCIAL CONSULTANCY ON THE NEW AIRPORT ITSELF CONTINUING, WITH A DRAFT FINAL REPORT EXPECTED AT THE END OF THE YEAR.

RECENT WORK, IN WHICH THE PROVISIONAL AIRPORT AUTHORITY HAS BEEN CLOSELY INVOLVED, HAS FOCUSED ON WAYS OF IMPROVING THE COMMERCIAL VIABILITY OF THE AIRPORT THROUGH A MODULAR AND PHASED APPROACH TO CONSTRUCTION AND A MORE COMMERCIAL APPROACH то ENHANCING REVENUES.

/THE PRESENT