CONFIDENTIAL
14
Background Noto
Cross Harbour Tunnel, Hong Kong
In 1959 business intorests in Hong Kong formed a company to investigato
A study was the poasibilition er a link borwoon Hong Kong and Kowloon. comploted (by Scott, Milson Kirkpatrick and Freeman, Fox Ltd.) in 1961 which confimed that such a link was technically and financially feasible. In 1963 tha Hong Kong Government said that it had no objection to the construction of 2 tunnel (but not a bridge). In 1965 the Hong Kong Legislative Council passod ʼn Rosolution approving to gout of a 30-yone exclusivo franchise to the Company for the construction of a four-lano tunnel on paymont of a 12 royalty on gross operating recoipts. 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 less than 25% of the capital cost of the tunnel wants to be in the form of oquity capital and the Government had the option of taking up to 25% of any oquity capital. The Resolution also laid dom an
initial faro structure for uso of the tunnel.
2.
The authorised capital of the Cross Harbour Tunnel Co., Limited (2625,000) was to be increased to 273 million to be held in the following proportions:-
Wheelock Mardon & Co., Ltd.
Hutchison Intomational Ltd.
Hong Kong Govomment
Hong Kong and Shanghai Bank
Minor Shareholders
371
3726
121
10%
21%
3.
In inviting tondors to build the tunnel the Tunnol Company stated that its shareholders would provide £7.5 million of which up to £3.75 million would bo nooded for approach roads and miscellaneous chargos. Contractors wore to be required to arrango financo for the balanco, ropayablo over a period of cight years from complotion. It was stated that no guarantco would be availablo oither from the Hong Kong Government or from any Dank. As socurity the Company offered a lion on its revenues or a mortgage of its assots or both. Tenderers could assume an averago cash flow of the order of £2 million per annun for the first five years of operation.
4. Costains tondorod on the basis of a loan of £8.1 million from Lloyds Bank (roprosenting about 64% of the contract price of £13 million) repayable ovor seven years from complotion for the U.K, clement and five years from complotion for the local costs olcnent. E.C.G.D. cover in respect of this loen wes offered subject to the following conditions:-
(a) an irrevocallo joint and soveral guarahtco from the min
sharcholders, in the Cross-Harbour Tunnol Company (Wheelock Mardon & Co., Ltd. and Hutchison Intomational Ltd.);
CONFIDENTIAL
/(b) an
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