TNAG-0424-FCO40-470-Construction-of-an-underground-railway-system-in-Hong-Kong-1973 — Page 260

0003160 G.F. 316

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- 5 -

Add contingencies (15% for civil works

and 7.5% for E & M)

Less original provisions made by the consortium for:

HK$ mn

(3,399)

381

3,780

Contingencies

27

Cost of establishment, project

management, etc.

230

257

3,523

Add:

Exchange rate adjustments (cf.

paragraph 6 above and paragraph 22 below)

255

Provision for unforeseen

circumstances

500

Cost of establishment, project

management, etc.

327

Cost escalation from 1st May 1973

to date of completion of

construction (at 8% p.a.)

1,170

2,252

Assumed contract price

5,775

20

as follows:

The column headings used in the cash-flow table are explained

(a) the Corporation's own cost consists of:

(i)

land acquisition costs, estimated at $200 mn at mid-1973 prices, less possible resales of surplus land estimated at $50 mn at mid-1973 prices;

(ii) site investigation costs (including soils investigations and diversions of utility services) estimated at $41 mn;

(iii)

(iv)

(v)

Consulting Engineers' fees, estimated on the basis of their present fees, but adjusted to take account of the consortium's proposal to take over the detailed design of the system;

site supervision costs, estimated at $130 mn;

MTR Corporation management costs, estimated at $152 mn over the construction period of Stages 1-4; (subsequent management costs are included in operating expenses).

(b) The assumed contract price is as set out in paragraph 19 above.

(c)

Replacement of equipment is assumed to take place at the end of the life of the asset concerned as predicted by the Consulting Engineers, at prices prevailing in the year of replacement.

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/.... (a)