U.S.
IS.C.M
Tonnal file
SATURDAY FEBRUARY
S. company may ance harbour
nnel project
An American financial company has offered to Ance the construction of Hongkong's cross-harbour tunnel project..
This was disclosed last night by Mr Antonino G. Martinez, President of the RP Investment and Foreign Funds Corporation of Manila, on his arrival from the Philippines.
Mr Martinez said the ToMMills Brokerage Co Inc of Chicago had agreed to finance the project with U.S.$30m at 6% cent interest over a period of 20 years
without any bank or Government guarantee.
"
per
The Filipino businessman said he would be leaving for the U.S. today, in company with two directors of Cross Harbour Tunnel Ltd. to sign a contract with the American companies.
Col the Hon J.D. Clague, Vice-Chairman of Cross Harbour Tunnel Ltd, last Mr Antonino Martinez Right confirmed that the company had begun negotia- tions with a Chicago invest- ment company that had offered to put up the money for the project.
which had agreed to finance the tunnel project.
At the preliminary dis- cussions, it had been stated that the financial company had agreed to finance the project at 8 per cent interest for ten
but years,
in October last year, Mr Martinez said he was able to get the finance at 6% per cent for 20 years and with- out any guarantee.
"When I was in Hongkong last week I had several dis- cussions with the 'T'unnel officials and everything had been agreed that we go to Chicago on February 10," Mr Martinez said.
"When I arrived here to- day, I was given to under- stand that the Board of Directors of the Tunnel Co will hold a meeting tomorrow before we leave," Mr Mar- tinez said.
were
as
Mr Martinez told a press Mr Martinez said the break- conference: "Arrangements down of shares of the Tunnel were made for me to come in percentage to Hongkong to accompany follows: Mr R. F. J. Brothers and Mr A. Warburton of the Cross- Harbour Tunnel Ltd to Chi- cago to finalise the agree- ment."
Contractors
is
"After the contract signed, the whole amount may be funded and relcased after 30 days," Mr Martinez sald.
He said that construction of the tunnel would be done by Richard Costain Con- struction Ltd of London, which the Cross-Harbour Tunnel Co Ltd had contract- ed for the immediate con- struction of the project.
Mr Martinez also said it had been agreed that the ToMMills Financial Co would put an equity of US$2.6m in cash as their contribution to the project and that his own company would put US$100,- 000 as shares.
"This is one of the condi- tions of the funding of the $30m which require no bank. and Government guarantee," he said.
he
Mr Martinez said that had had many
discussions and negotiations with the senior officials of the Tunnel Co and particularly with Col the Hon J. D. Clague since October last year.
He said that his office, with a branch office in Hongkong, epresented ToMMills Fin- ancial Corporation of Chicago
The Hongkong Government 25 per cent, the Hongkong and Shanghai Banking Corporation 10 per cent, Hutchison Inter- national Ltd 29.50 per cent, Wheelock Marden Co Ltd 29.50 per cent, the Kwong Wan Ltd 5 per cent and Si Elly Kadoorie Successors Ltd, 1 per cent.
Financing
from
four sources'
The initiative on the building of the proposed cross-harbour tunnel has
in swung
the company's favour over the past month.
Col Clague, confirming that negotiations had begun with the American company, revealed that Cross-Harbour Tunnel Ltd now had the option to get the required contractor financing from any one of four sources the other • three being French consortium, Swiss interests and Britain's Export Credit Guarantee Depart- ment.
nor
a
He could not, however, say when negotiations might be finalised
which party might have the most chance of success.
He added: "We are very happy with the developments. The initiative is now with the company."
The SCM Post, which has been keeping a close watch on recent Tunnel Company moves both in Hongkong, Britain and Europe, is able to say from its sources that there is no possibility of any joint French-British backing of the finance and the com- pany would make it a choice of either getting the money solely from London or Paris if it did not decide upon ac- cepting Swiss or American capital.
New interest
It is believed the ECGD, under prodding from White- hall, has become so interest- ed in re-opening the negotia- tion with the company which broke down late last
year]; when the company considered the British terms were too stringent and therefore un- acceptable, that it has sent a man to Hongkong and he is at present here talking to the company.
The American offer result- ed from negotiations which began about a fortnight ago.
The tunnel, which has been projected since 1964, has been estimated to cost HK$280m.
When the company announ- ced late in 1965 its intention to proceed with the work, it said it was hoped to have the tunnel opened by 1971.
The long-term Road Study revealed by Government just before Christmas showed that the tunnel was taken into account by Government's con- sultants in their study of Hongkong's road needs for the next decade.
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