TNAG-1987-FCO40-2820-Presentation-of-UK-policy-on-Hong-Kong-to-the-media-1989 — Page 11

a

conservative

calculated approach, of HCV is 19.4% while HKCC's 14.4% is 17.0%. The difference of 2.4% is 50%

the result of many factors, such as different royalty schemes streams and investment levels.

(ii)

(iii)

(iv)

revenue

According to the consultants, both HCV and HKCC have not concluded their financing arrangement s as it is unrealistic to assume that they could do SO before obtaining the licence. The consultant s advised that the funding requirements of the project for capital investment and operating cost would be highest in 1995 for both bidders.

In their original submissions, HCV and HKCC have made proposals for financial commitment for $4.2 billion and $4.0 billion respectively. However, the consultant s have advised that given the most pessimistic scenario, actual funding requirements would be more than the commitments provided by the bidders.

and

the

the

To give Government a greater assurance of the successful execution implementation of the project, consultant s suggested that financial commitments of the preferred bidder be raised to the order of $5.5 billion. This should be made in an appropriate form of guarantee Government. It is intended that this should be pursued in the negotiations.

Fees and Royalty Payment

(b)

(i)

(ii)

>

to

On 27 June 1988 after considering memorandum XCC (89)91, Members agreed that the successful licensee should not be charged fees for the laying of cables under public streets unleased Government land.

or

In line with the recommendation of the Broadcasting Authority wireless TV broadcasting

fee of $1,000

licence

payable annually by broadcasting licensee.

for the licences, a should be

the

CTV

CONFIDENTIAL