TNAG-0772-FCO40-976-Modernisation-and-electrification-of-the-Kowloon-Canton-Rail-1978 — Page 171

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that there would be a growth in freight volumes to between 4 and 6 million tons by 1997. The net revenue from 4 million tons at present day prices would be approximately $40 million. As indicated in paragraph 10 above the KCR could only obtain the capacity to absorb such an increase in the volume of freight by electrification of passenger trains (although freight would continue to be hauled by diesel locomotives), as there would not be adequate line capacity to meet the resultant demand for 25 freight trains per day if the present traction system was retained.

Financing

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If the project is approved it would be the intention to finance it through the Public Works Programme. As, however, it is expected to be financially viable this would not exclude the use of borrowed funds if it were found to be desirable, and it is probable that significant export credits could be obtained from overseas supplying countries. In any case, the intention would be to engage consultants to advise on designs, the drawing up of contracts and their letting through international competitive tender, and to assist in project management and budgetary control.

Transport Advisory Committee

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A paper recommending the acceptance of the consultants' proposals on electrification of the KCR main line was circulated to the TAC last month. Due to pressure of business it could not be discussed at the meeting of the Committee before Christmas, but it will be raised at the next meeting on 13th January. Indications are that the Committee will give its support to the proposal and their reaction will be conveyed to Honourable Members when this memorandum is discussed.

Public Relations

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An electrified KCR will provide increased rail capacity, a faster and more frequent service, and an improved standard of travel at levels of fares similar to present levels in real terms. It should therefore be welcomed by the general public. Publicity will cover the advantages of the new traction system and will point out that overhead electrification is no more dangerous than the present tramway system.

Recommendation

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Honourable Members will be asked to advise whether the consultants' recommendation set out in paragraph 9(d) above for the

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