EXPORT CREDIT FINANCE
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AMOUNT
Mr Hadden-Cave queried the amount of finance that was proposed by the consortium: the tabular projections showed an amount of HK $2403m and the consortiums presentation mentioned finance for 68% of the cost. The figure of HK $2403m represented 68% of the consultant's evaluation of project cost inclusive of land acquisition and consultants charges.
Mr Kindersley recalled that the percentage of cost which could be covered by export credit finance had been discussed in some detail in London in November. Amount could not really be determined in the absence of knowledge of contract price; the dominant point is that finance equivalent to 100% of the UK content is to be made available.
Messrs Kindersley, Scott and Newall all stressed that the consortium approach would maximise UK content. On civil engineering consortium could organise a capital rather than labour intensive approach. It was doubtful even if on a fragmented approach all the contracts were placed with British firms whether the UK content would be anything like as high as on a consortium approach.
EXPORT CREDIT FINANCE
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CURRENCY
Mr Hadden-Cave enquired whether the consortium would insist up on a sterling contract and a sterling loan, and observed that such would be acceptable to Government anyway. The reason for the enquiry was not vouchsafed.
EXPORT CREDIT FINANCE
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TERMS OF FINANCE
Mr Hadden-Cave referred to the consortium's terms for finance viz interest at 6% p.a. commitment commission of 11⁄2 negotiation commission of 0.10% and an annual management commission of 0.5% and queried when repayment of the loan would start and over what period it would be payable. Mr Sandberg stressed that the issue of a grace period as regards both principal and interest up to completion of stage 4 was very important to Government.
Mr Kindersley referred to the consortiums presentation which set out the position and indicated that the level of negotiation and management commissions could be a matter for negotiation. Repayment of principal was indicated as in 24 half yearly instalments over 12 years from completion of each phase, When a Financial Agreement was being drafted the contractual construction programme would be known and the dates for repayment of the loan would then be determined. If in the event major delays occurred on the construction then any request for a rescheduling of the repayment dates could be examined. Mr Sandberg considered that if the responsibility for delays were the consortium's fault then repayment dates should be adjusted to accord with actual completion dates.
Mr Hadden-Cave enquired whether the consortium would require Government guarantee. Mr Kindersley said this point was covered in the original presentation and emphasised that the overall financial package which had been put forward was on the basis there would be one contract with the British consortium.
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