CONFIDENTIAL
Background Noto
Cross Harbour Tunnol, Hong Kong
In 1959 business intorcsts in Hong Kong formed a company to investigato the possibilitios of a link borwoon Hong Kong and Kowloon. A study was complotod (by Scott, Wilson Kirkpatrick and Frooman, Fox Ltd.) in 1961 which confirmed that such a link was technically and financially feasible. In 1963 tho Hong Kong Government said that it had no objection to the construction of a tunnel (but not a bridge). In 1965 tho Hong Kong Logislative Council passed a Rosolution approving the grant of a 30-yoar exclusivo franchise to the Company for the construction of a four-lanc tunnel on payment of a 12% royalty on gross oporating receipts. In addition the Company was to pay for the way leave rights on and rent for Crown land and to contribute to the cost of connecting roads. Not loss than 25% of the capital cost of the tunnol was to be in the form of oquity capital and the Government had the option of taking up to 25% of any oquity capital. The Rosolution also laid down an
initial fare structure for uso of the tunnel.
2.
The authorised capital of the Cross Harbour Tunnel Co., Limitod (625,000)
was to be increased to £7 million to bo hold in the following proportions:-
Whoolock Mardon & Co., Ltd.
Hutchison Intornational Ltd.
Hong Kong Govornont
Hong Kong and Shanghai Bank
377% 37골%
12%
10%
22%
3.
Minor Shareholders
In inviting tondors to build tho tunnol the Tunnol Company stated that its shareholders would provido £7.5 million of which up to £3.75 million would
be needed for approach roads and miscellaneous charges. Contractors wore to bo
required to arrange financo for the balanco, ropayablo over a period of oight yoars from completion. It was statod that no guarantoo would bo availablo cithor from tho Hong Kong Govornmont or from any Bank, As security
the Company offered a lion on its revenues or a mortgage of its assots or both.
Tondorers could assume an average cash flow of the order of £2 million por
annum for the first five years of operation.
4. Costains tondorod on the basis of a loan of £8.1 million from Lloyds Bank (roprosonting about 64% of the contract price of £13 million) repayablo
over seven years from complotion for the U.K. olomont and five years from
complotion for the local costs clomont. E.C.G.D. cover in respect of this
loan was offorod subject to the following conditions:-
(a) an irrevocablo joint and several guarantoo from the min
sharoholdors in the Cross-Harbour Tunnel Company (Whoolock Marden & Co., Ltd. and Hutchison International Ltd.);
CONFIDENTIAL
/(b) an
No comments yet.
Private notes are available after approval.