MKK 178/1
RECE VED
28 MAY 1986
DISTRIBUTION
* TELEGRAM
LOW SY
ZCZC
HMLNAN 4980
RESTRICTED
PP EXCED
FM HKBTC TO EXCED
18091OZ APR
GRS 300
RESTRICTED
COMMERCIAL IN CONFIDENCE
FM BTC HONG KONG
TO PRIORITY ECGD
TELNO EXCED 6
OF 180910Z APRIL 86
DVANCED
R
+ pa pse Secard Harbow Tramal Наваш Тайке
(ECGD]
нко
FOR PD1
FROM SMITH-LAITTAN
HONG KONG PUBLIC SECTOR: HK DOLLAR FINANCE
1. YOUR EXCED 005.
2. IT IS NOT YET POSSIBLE TO SAY, WITH CERTAINTY, WHICH CATEGORY THE SECOND CROSS HARBOUR TUNNEL PROJECT SHOULD BE CONSIDERED UNDER. IF THE HK GOVERNMENT TAKES AN EQUITY STAKE IN THE COMPANY, IT WILL BE IN CATEGORY A.
UNFORTUNATELY, TRANSPORT BRANCH'S PROPOSALS HAVE STILL TO BE PUT TO THE EXECUTIVE COUNCIL (EXCO). PRESENT PLANS ARE TO PUT THE MATTER TO EXCO IN EARLY-MAY AND TO PUBLISH THE ORDINANCE WN THE OFFICIAL GAZETTE IN THE SECOND HALF OF MAY.
3. AM TOLD IN CONFIDENCE (PLEASE PROTECT) THAT TRANSPORT BRANCH AIM TO GIVE HK GOVERNMENT THE SAME SORT OF POWERS OVER THE OPERATION OF THE SECOND CROSS HARBOUR TUNNEL COMPANY AS THEY HAVE WITH THE EXISTING TUNNEL COMPANY. THIS WOULD SEEM TO SUGGEST, INTER ALIA, THAT HK GOVERNMENT WILL HAVE AN EQUITY INTEREST IN ONE FORM OR
ANOTHER IN THE COMPANY.
4. HOWEVER, SHOULD HK GOVERNMENT OPT NOT TO PART-OWN THE COMPANY
THE APPROPRIATE CATEGORY WOULD BE B, IE A WHOLLY OWNED PRIVATE
COMPANY FOR WHICH TOLL LEVELS ARE SET BY HK GOVERNMENT, THE
GOVERNMENTS CONTROL OF TARIFFS CLEARLY WOULD INFLUENCE THE
DEVELOPMENT PLANS AND FINANCING DECISIONS OF CATEGORY B COMPANIES (YOUR PARA 4 IN EXCED 036 REFERS). BUT THAT INFLUENCE WOULD NOT
APPEAR TO EXTEND TO THE HK GOVERNMENT'S BEING EMPOWERED TO
SPECIFY THAT CAPITAL EXPENDITURE SHOULD BE IN HONG KONG DOLLARS.
5. IF YOU MUST TAKE A DECISION BEFORE ENABLING LEGISLATION IS
ENACTED (HE END MAY SEE ABOVE) 1 WOULD JUDGE, FROM WHAT HAS BEEN
SAID TO ME IN CONFIDENCE TODAY, THAT THIS PROJECT SHOULD BE
CONSIDERED UNDER CATEGORY A.
HOLLOWAY
YYYY
HMLNAN 4980
NNNN
No comments yet.
Private notes are available after approval.