0003160 G.F. 316
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(e) Method of repayment: semi-annual instalments of equal
principal repayments plus interest on the outstanding balance (but the Sinking Fund method might also be acceptable).
(f) Capitalisation of interest: interest on export credits over the grace period would be capitalised. Capitalised interest would itself be subject to the same rate of interest as for the capital sum (i.e. 6% p.a.) and would be repaid over the same period (i.e. in 24 consecutive semi-annual instalments from the end of the grace period).
Other Finance
12
Lazard Brothers & Co Ltd has offered to act as financial advisers to the MTR Corporation, and to assist in arranging bond issues, medium-term bank loans and other market finance in conjunction with the client's bankers (and possibly others selected by the client).
Construction/Equipment Aspects
13
The Group envisage construction beginning on 1st March 1974,
and lasting for six years from that date.
14
They have estimated that a peak labour force of approximately 10,000 (including about 300-350 expatriates) would be required.
15
They will assist in organising and/or providing training facilities for the MTR Corporation's operations staff. They would also provide for a period of test operations in respect of the rolling stock and E & M equipment supplied.
Additional Work Required of Consulting Engineers
16
The civil engineering sub-group propose that the Consulting Engineers should undertake the complete detailed design of the civil works involved. The E & M sub-group, on the other hand, are prepared to accept responsibility for detailed design on the basis of performance specifications to be issued by the Consulting Engineers.
Proposed Sequence of Events
17
The Group's proposal to begin construction on 1st March 1974 is predicated on the assumptions that:
(a) they would receive a Letter of Intent by 1st October 1973 signifying the client's intention to negotiate a contract with them; and
(b) the contract would be completed and signed by the beginning
of 1974 (before a complete schedule of 'target rates' for civil works has been agreed).
18
Part II
Explanatory Notes on the Cash Flow Table in Part III
The cash-flow table in Part III of this Annex has been drawn up on the basis of the Group's proposals and of certain assumptions made by the Mass Transit Steering Group.
19
The Group's price estimates (see paragraph 6 above) have been adjusted as follows to bring them roughly in line with the coverage of the prices indicated by the other three consortia:
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