TNAG-0565-FCO40-660-Construction-of-an-underground-railway-system-in-Hong-Kong-1975 — Page 84

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- 8.

The three countries not mentioned above whose contractors

may tender for E and M contracts, namely, Belgium, Holland

and Switzerland, are expected to offer 80 - 90% of export

value repayable over 10 - 12 years from contract completion.

Since the completion dates for most contracts are in the

second half of 1979 and early 1980, the first repayment of

the export credits would take place during the first half

of 1980. All the terms mentioned above precede any serious

negotiation and are, therefore, minimum terms. In addition,

offers of finance relating to the import element of contracts

have been received from other sources.

For the purpose of the current cash flow estimates, it

has been assumed that 85% of the total offshore value will

be available, to be redeemed in equal annual instalments from 1980-88, at an overall cost of just over % p.a. (including

expenses).

(b) Local: Hong Kong dollar funds have the advantage of avoiding

any currency exchange risk, but are not normally available

at long term. It is thought that a commitment can be

obtained for a line of credit of HK$500 million for 5-7 years

repayable in 1982 at an average overall cost of some 10%

p.a.; such a line could be drawn at any time during the

construction period.

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