TNAG-0669-FCO40-818-Policy-on-housing-and-resettlement-in-Hong-Kong-1977 — Page 101

C.S. 166

CONFIDENTIAL

機密

· 5 -

XCC(76)85

borrowings arise directly from the Authority's execution of the Govern- ment's housing policies, the payment of interest is an unnecessary com- plication in the cash transactions.

13

In all the circumstances, in order to put the Authority in a position where it will not need to borrow more than is actually required to finance new estates, it is proposed:

(a)

(b)

that the value of any land vested in the Authority should be regarded as a further investment in the Authority by the Government (the value would be determined in the same manner as is eventually decided upon for the new estates financed through the Public Works Programme and referred to in paragraph 8 above); and

that borrowings from the Development Loan Fund from 1st April 1976 should be interest-free (but, as a corollary, drawings will be allowed strictly on the basis of cash requirements).

The consequences of the Authority's new capital structure and revised cash flow arrangements

14

If the Authority's debt capital is converted into a permanent capital stock (paragraph 6 above) and the extent of its borrowings from the Development Loan Fund is reduced (by the proposals outlined in paragraph 13 above), the Authority's cash outgoings will be considerably reduced by:

(a) the amount of interest currently being paid on the

outstanding balance of past loans from the Develop- ment Loan Fund;

(b)

(c)

the interest which would be payable on fresh borrowings from the Development Loan Fund that would be required to enable the Authority to pay for the new estates financed through the Public Works Programme and for new land grants; and

the interest which would be payable on fresh borrowings from the Development Loan Fund for new construction.

J.

15

In the circumstances it is proposed that:

CONFIDENTIAL **