G.F. 323
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Results of Cash Flow Analysis
18.
All the figures in Table 2 below include elements for inflation,
escalation and foreign currency fluctuations.
19.
Maximum outstanding loans are reached in 1981 (HK$5,590 million)
and thereafter revenue is sufficient gradually to reduce this figure.
From 1989 onwards gross revenue exceeds all costs including debt
servicing, leaving a positive net cash flow after redemptions available
for transfer to Government.
20.
Table 3 shows the drawdown of the various loans described
in paragraph 17. This does not represent a planned strategy of
borrowings, but merely the outcome of the availability of funds and
the order in which they are to be drawn, as fed into the computer.
The main features are that the export credit loans and local bank
syndicate are fully drawn; the permitted volumes in the local bond
market are fully drawn until 1980s and, thereafter, in smaller amounts.
Just under half of the international bank syndicated loan is drawn,
and the undrawn portion represents slightly more..than the amounts
predicted to be available in the foreign long and medium term markets.
Thus, it is reasonably clear that sufficient funds are available during
the construction period. Borrowings indicated in Table 3 from 1981
1.
onwards would be mainly for re-financing.
Payback and Rates of Return
21.
It can be seen that by 1991 the accumulated surplus exceeds
loans outstanding, showing that by that date all borrowing could have
been repaid, leaving a surplus thereafter.
The internal rate of return
on the project (i.e., that rate of discount at which the stream of
gross revenue minus capital costs and operating costs equals zero) is
some 13% p.a.
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