Government also announced that about 40% of the expenditure is to be funded from the Public Sector while the remaining 60% will be funded by the Private Sector, on a BOT (BUILD-OPERATE-TRANSFER) basis.
The secret of success in a BOT system is that the owner will spell out what he wants and the BOT CONTRACTOR will take complete responsibilities in the organization, design, supply, construction and financing of the project. There is only one single source of responsibility. This is always insisted by the banking community before they will finance these schemes, otherwise the designers, suppliers and contractors can all blame other parties for any faults, changes, delays and cost overruns. The banks will have no way of holding which or any party responsible. It is like ordering a Jumbo 747--- Boeing will take complete charge on the design, supply, manufacture of the 747, comply with all the specifications at a set price and deliver the plane on time. If for whatever reasons Boeing cannot comply with the specifications, or is late, Boeing will just to have to pay damages. The banks will gladly finance such a purchase. But if the Jumbo 747 is to be designed by A, suppliers are B and erectors are C, without a single source of responsibility on time or cost overruns, the banks will simply say no.
The current Government thinking on the implementation of the PADS SCHEME is not to have one or only a few major BOT packages but to have the project fragmented into multiple consultancies and contracts, slipping BOT'S in whenever it is expedient (see appendix No.1). These consultancies contracts, and subsequence BOT CONTRACTORS' agreements will be administered by several different Government Departments. The interphasing and co-ordination of all these contracts must be horrendously difficult and complicated. Certainly this will neither lend itself to efficient management nor fast track construction. No doubt the Legal Department will strengthen its staff to cater for all the claims associated with administering all these contracts as every party will blame others for the delays. Claims lawyers will be a growth industry for Hong Kong.
It has been reported in the local newspapers that a HK$ 2,000M request for the funding of consultants for PADS is pending in the Finance Committee. Of course this request is only the first of the many to come.
Despite of the memo, the Jardine Group and the Keswicks have always been a staunch supporter of the Consortium, as evidenced by their pledge to take up 5% equity in the Consortium. Other Consortium members include many other prominent Hong Kong, British mainland Chinese and Japanese entities. The list is a very long one, with a lot of world class banks confirming their keen interest to participate in the financing of a BOT project on the much needed Hong Kong Airport project. The Consortium is grateful for the support it receives.
Hopewell Holdings Limited of course is one of the most experienced BOT CONTRACTOR in the world, having completed and is involved in various projects in several countries. (see Table No. 2)
Although Hopewell's experience and track records have been impressive, and the Hopewell Consortium has already registered its interests with the Government as a BOT CONTRACTOR, but whether "a group led by JM and other Hongs would be viewed as a more satisfactory partner for Government is still the official Hong Kong Government's policy, as told to JM by the Deputy Secretary for Economic Services, can only be confirmed in the future awards of the BOT contracts.
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