TNAG-0639-FCO40-787-Construction-of-underground-railway-system-in-Hong-Kong-(Mas-1978 — Page 40

C.S. 166

CONFIDENTIAL # #

XCC(77)54

Copy No: Page 14 of 18

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of &

Conclusions

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Although forecasts of traffic volumes and movement cannot be accurate and although the consequences of inserting a mass transit railway into the public transport and traffic patterns of Hong Kong have yet to be experienced, the need for an improved public transport system in the heavily populated and congested Tsuen Wan corridor, despite the improved road network already planned, has been demonstrated in paragraphs 8 to 14 above. This corridor is already one of the most heavily congested parts of the road network in Hong Kong and will become more so in the future as the population of the Western New Territories increases. Meeting the future demand for public transport in the corridor by surface modes alone will be very difficult and would add to the already serious problems of traffic congestion. In such circumstances, a considerable deterioration in the standards of public transport could not be avoided. This would have severe economic and social consequences,

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These transport arguments explain why an extension of MIS to Tsuen Wan is predicted to attract sufficient additional patronage to add more to revenue than to costs, Although, in the initial period, the Corporation's maximum outstanding debt and the Government's financial commitment to the MTR would be increased, the MIS, together with the Tsuen Wan extension, is expected to be significantly more viable than the MIS on its own, with the result that the payback period for the combined system would not be increased. Furthermore, experience has been gained in the construction of the MIS (which is proceeding on programme and within budget) and local and interna- tional finance is readily available. So, many of the uncertainties that faced the Corporation when the decision was made in 1975 to proceed with the construction of the MIS would not be present in any decision to build the Tsuen Wan extension.

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The conculsion is that extending the MIS to Tsuen Wan would be justified on both transport and viability grounds.

Timing

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Although there may be some physical difficulties in constructing the extension, due to the existing traffic, these are likely to be no greater than those already being experienced with the MIS and large sections of the works involved would cause no disruption. There is no doubt, however, that the longer construction

CONFIDENTIAL #2