TNAG-0098-FCO40-134-Construction-of-a-Cross-Harbour-Tunnel-1968 — Page 139

ANNEX A

LETT-R from Financial Secretary, ilong 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) 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);

(b) 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, The intereat 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 an 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.