XN000022-1991-12-04 — Page 15

WEDNESDAY, DECEMBER 4, 1991

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FUNDING OF NEW AIRPORT EXPLAINED

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THE PART OF THE COST OF THE AIRPORT PROJECTS WHICH WILL BE FUNDED AS GOVERNMENT CAPITAL EXPENDITURE WILL TAKE UP ONLY ABOUT ONE QUARTER OF THE TOTAL CAPITAL EXPENDITURE IN THE SIX YEARS OF CONSTRUCTION, THE FINANCIAL SECRETARY, THE HON HAMISH MACLEOD, SAID

TODAY (WEDNESDAY).

REPLYING TO A QUESTION BY THE HON FELICE LIEH-MAK IN THE LEGISLATIVE COUNCIL, MR MACLEOD SAID OVER HALF OF THIS AMOUNT WAS ATTRIBUTABLE TO PROJECTS SUCH AS WEST KOWLOON RECLAMATION AND ROUTE WHICH WOULD HAVE TO BE IMPLEMENTED EVEN WITHOUT THE NEW AIRPORT.

REGARDING THE PERCEPTION THAT THE AIRPORT CORE PROJECTS RESPONSIBLE FOR PROPOSED CUTS IN PUBLIC EXPENDITURE WHICH DEPRIVE THE COMMUNITY OF ADEQUATE ESSENTIAL SERVICES, MR MACLEOD THE REALITY WAS QUITE DIFFERENT.

3

WERE

MIGHT

HE SAID THE GOVERNMENT WAS PLANNING OVERALL FOR REAL GROWTH PUBLIC EXPENDITURE, NOT "CUTS".

SAID

IN

"THE PRIME CONSTRAINT ON HOW MUCH MORE CAN BE SPENT ON NEW SERVICES IS IN FACT THE RELATIVELY LOW ECONOMIC GROWTH WE ARE CURRENTLY EXPERIENCING.

**WHERE THE CONFUSION ARISES IS THAT, GIVEN BIDS FOR NEW SERVICES ALWAYS EXCEED AVAILABLE NEW MONEY, WE ARE REQUIRING DEPARTMENTS ΤΟ FIND MODEST SAVINGS IN WHAT THEY SPEND ON EXISTING SERVICES, SO THAT MORE CAN BE SPENT ON NEW SERVICES, HE SAID.

TI

"WHILST THE COST OF THE AIRPORT PROJECTS IS SUBSTANTIAL, NEEDS TO BE KEPT IN PERSPECTIVE," THE SECRETARY SAID.

IT

"MOREOVER, THE AIRPORT PROJECTS ARE A VITAL ENGINE OF FUTURE ECONOMIC GROWTH, HE SAID.

**

THE SECRETARY NOTED THAT THE ESTIMATED COSTS AND THE FUNDING ARRANGEMENTS FOR THE AIRPORT CORE PROGRAMME (ACP) WERE GIVEN ΤΟ MEMBERS OF FINANCE COMMITTEE IN JULY THIS YEAR.

"THESE PROJECT ESTIMATES TOTALLING $98.6 BILLION AT MARCH PRICES REMAIN OUR BEST ESTIMATES AT THIS STAGE, HE SAID.

1991

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MR MACLEOD POINTED OUT THAT THE FUNDING SPLIT BETWEEN GOVERNMENT AND THE PRIVATE SECTOR WAS THE BEST ESTIMATE OF THE ATTAINABLE LEVEL OF PRIVATE SECTOR FUNDING.

"OUR GENERAL AIM HAS BEEN то ATTRACT PRIVATE INVESTMENT WHEREVER THIS MAKES SENSE. USUALLY THIS MEANS THAT A PROJECT WOULD GENERATE A SUFFICIENT RETURN ON INVESTMENT, HE SAID.

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HARBOUR

MR MACLEOD SAID THIS MEANT IN ESSENCE THE WESTERN CROSSING WOULD BE A BUILD, OPERATE AND TRANSFER FRANCHISE ARRANGEMENT.

/THE AIRPORT