}
We in CRE are in possession of a copy of Volume 1 of the final report by Freeman Pox and Partners. If anyone would like to consult this rather bulky volume perhaps they would let me know and we can take the necessary arrangements. This report is currently being considered in Hong Kong but even if its recommendations were simply to be accepted as they stand wo should not be all that much further forward with the key questions: the contracting party; the terms of contract and the method of finance. in the latter question the report notes three possible sources: international development funds (ADB, IBRD); the Hong Kong Government; commercial borrowing (not spesifically contractor or equipsent credits). It believes that international finance is unlikely and that commercial sources would find the total unmanageable, leaving either the Government itself or a combination of Government and commercial finance. Kozever it adds "a recomendation on the most appropriate method of financing the project is not within our terms of reference since mstters of government policy are involved". Va hove none reason to believe that the Colony's Transport Advisory Committee #ill confirm that the Government needs to bear a significant part of the direct capital cost, to guarantee the whole system financially and to provide the operating authority - whatever sources are invited to contribute the balance.
According to the report it is intended that construction of the system shall be by contracts awarded after international competition and that the procedure for placing the contracts (which should be auch as to encourage keen competition for orders on an equitable basis) will have to be established early in the design period.
The length of the construction period and the total costs are of course in doubt and will not become clearer until basic decisions have been taken on the recommendations. The report deals with the project in two parts, an "initial" system (assuming basic decisions taken by mid-1971 this would give
a construction period of 1973 to December 1978) and a "preferred" system involving an additional 5j yeurs construction from mid- 1971 to December 1985.
The estimated combined capital axpenditure is broken down roughly as follows:
f millions
Lard
Con- struct on
Plant & duipment
Total
Initial Bystem
3.3(net)
93.4
34.3
131.0
Freferred cysten
(additional
expenditure) _7.3(net)
52.2
170.9
TOTAL
10.6(not) 204.8
85.5
£301.9
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