TNAG-0422-FCO40-468-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 64

the level of expenditure on Public Works Non-Recurrent which is likely to be $75 million less than the original estimate, mainly because progress on major waterworks projects has not been up to expectation.

10.

(a) Mass Transit Railway

;

Before making the customary report to honourable Members on our likely financial position at the end of the current financial year, I should give notice of my intention to invite Finance Committee next month to appropriate $500 million of this year's surplus under a new special expenditure subhead entitled "Mass Transit Railway Corporation: Equity Contribution" under Head 51 Miscellaneous Services. This sum would then be credited to a special fund established by resolution of this Council. The fund would appear as a liability in the Colony's Statement of Assets and Liabilities and withdrawals made for equity investment in the Mass Transit Railway Corporation. Until the fund is exhausted and has disappeared from the Statement of Assets and Liabilities, interest on the matching balance would accrue to General Revenue as would any cash dividends from the equity investment in the Mass Transit Railway Corporation. Although the capitalisation of the Mass Transit Railway Corporation would have a high loan gearing, we intend that the equity element should consist of about $1,500 million`in the form of cash of which perhaps two thirds would be subscribed by the Government during the years of construction of Stages 1.4 and the other one third by the private sector later on. The Government's total equity position would also include expenditure incurred on the scheme to date and the value of Crown land assigned to the Corporation.

11. If Finance Committee approve supplementary provision of the sum I have suggested, the surplus this year carried forward to the General Revenue Balance will be reduced to $222 million on the basis of the revised estimates for the year; or, more realistically, to $400 million using my prediction of what the final outturn will be.

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/Financial Position....