TNAG-1777-FCO40-2531-Public-transport-system-in-Hong-Kong-various-ordinances-1988 — Page 53

HONG KONG

LEGAL REPORT

TATE'S CAIRN TUNNEL ORDINANCE 1988

(No. 50 of 1988)

Enclosure No. 2

The purpose of this Ordinance is to give legislative effect to the grant of a franchise to Tate's Cairn Tunnel Company Limited (the Company) to construct a road tunnel through Tate's Cairn. The Ordinance will be supplemented by agreements which will be signed before it is brought into operation: an agreement dealing with the construction of the works (the project agreement), and 2 guarantee agreements (the guarantee agreement and the further guarantee agreement).

2. Part II grants a franchise to the Company to construct the tunnel and other works comprised in the project and to maintain and operate these for 30 years from the start of construction.

3. Part III deals with assignments and mortgages. Sections 6 and 7 prohibit the assignment or other disposal of the franchise rights except with the prior consent of the Governor in Council. The Governor in Council, however, is not required to authorize the charging of the franchise rights by way of security, but the security cannot be enforced without his consent.

4.

Part IV contains provisions dealing with the Company. Section 8 entitles the Government to appoint

2 directors to its board and provides that its minimum

share capital on the road operating date shall be $600,000,000. Section 9 requires the Company to pay a royalty to the Government on the operating receipts and, if these receipts are greater than the projected operating receipts, a further royalty.

5. Part V deals with the duties of the Company in carrying out the project. All construction works are to be at the expense of the Company (section 12). The Part also provides for the start of construction (section 13) and the period within which the works are to be constructed. The period is 37 months from the start of construction and can be extended by the Governor in Council or, in the case of certain contingencies specified in the project agreement, the Director (section 14). The works will, in general, not be subject to the Buildings Ordinance (section 16).