TNAG-0097-FCO40-133-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 34

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LETTER from Financial Secretary, Hong Kong to Chairman of the

Cross Harbour Tunnel Company, Ltd.

16 December, 1967

I am directed to refer to correspondence resting with your

letter of 30th November last and to inform you that the Government,

after carefully considering the present position regarding the

financing of the proposed Cross Harbour Tunnel, is prepared to

propose to the Legislative Council the maximum contribution from

public funds as follows :-

(a)

(b)

the contribution to the Equity capital of the Company

of 25% of the total equity up to the maximum of

Hong Kong Dollars 27.5m (excluding interest accruing

during the period of construction);

a sum of Hong Kong Dollars 12m (approximately) to be

spent by the Public Works Department on approach roads,

etc., to be repayable after the commercial loan of

£10m from Lloyds Bank has been repaid. 5

The interest charged on, and the repayment terms of, this loan

to be subject to negotiation. I am to emphasise that these

proposals are conditional upon approval of the Finance Committee

of the Legislative Council and that they represent a maximum

contribution from public funds.

I am further to say the Government is not prepared to

guarantee the Company's bank loan on the terms laid down by the

Export Credits Guarantee Department.

I should be grateful if you would inform me as soon as

possible, but not later than 31st March, 1968, whether or not

your Company wishes to proceed with the project on the foregoing

basis.

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