TNAG-2143-FCO40-3062-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 75

0.1.0

3

We

have no doubt that the

Lender exercise

1

construction

will attract a larger number of well qualified

contractors, and that the added competition wil! result

a very keen price for the bridge.

The Construction

Contract approach also opens up

another attractive option for financing the project at a

later stage, that. is to call for competitive bids for the

franchise to operate the bridge after it is completed.

view is that such a tranchise would be attractive and the

proceeds

Our

from the tender exercise could at least match the

cost. of construction.

Thus we have total confidence in the

projects long-term viability.

IL

the

bidders

the project were to be tendered on a BOT basin,

would base their judgement of its viability on

three main factors: the cost of construction, the revenue

which in turn depends on traffic forecasts and the level of

tolls, and the perceived risks involved. We are advised

that there can be a high degree of certainty over the cost

but. that prospective bidders might not

of

construction,

have the same degree of confidence with regard to the other

The continuing crisis in the Gulf and the

1.Wo factors.

world

climate.

economic

situation

have

not helped the commercial

Page 75Page 76