TNAG-0424-FCO40-470-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 236

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18.

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the balance of advantage would seem to lie in adopting a multi-contract approach. This is, to some extent, necessarily a subjective judgment; strictly speaking, a final determination of the balance of advantage cannot be made with certainty until more information as to prices and credit terms is available, particularly from the various consortia which have submitted single-contract proposals. Unfortunately, however, it is probable that to await all the necessary information would further delay the whole project. A multi-contract approach (whatever the size of each contract) and a single-contract approach would create entirely different requirements insofar as the programme of work on the design and specification of the system is concerned. In the former case, detailed designs and specifications for the early stages would have to be drawn up in preparation for letting the first contracts. In the latter case, however, outline designs for the whole of the first four stages would be required before a single contract could be tendered for by competing consortia. These two different approaches cannot be run in tandem, and one or the other will have to be chosen very quickly if the project is not to be unreasonably delayed.

Institutional Arrangements for Operating the MTR

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Whatever arrangements are made to finance, construct and equip the system, an authority would need to be established to oversee and co-ordinate the design, construction and equipment of the MTR, and to operate and maintain the system after construction. Bearing in mind that:

(a)

a significant element of equity capital should

be injected in the earlier years, for the reasons stated in paragraph 18 above;

(b)

this equity should be provided entirely by the Government initially, in view of the long pay-back period, although the private sector might be invited to participate in the equity at a later stage; and

(c)

the MTR will be at the core of the Government's overall transport policy in the 1980s,

it is considered that the authority should be subject to a greater degree of Government supervision and control than the Cross Harbour Tunnel Company and other public utilities.

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It is accordingly proposed that the authority should be a statutory Corporation, created by Ordinance. It should be directed

by a Board, the Chairman and members of which would initially be

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