Contract 2 : Kap Shui Mun Bridge/Ma Wan Viaduct, being a "Design and Construct" contract, allows six months for the tender period to reflect the additional time required by the tenderers in preparing their own design. Similarly, a tender assessment period of five months reflects the extra time in checking tenderers' design and construction methods. The contract is expected to be awarded in the first quarter of 1992 and the work including detailed design will take around 'four and a half years to complete.
16
The
above timetable will allow Government to consider, during the tender assessment period, whether it might be more cost-effective to award both Contracts 1 and 2 to one tenderer.
Financial aspects
Equity Participation by Private Sector
17
In consultation with our legal and financial advisers, consideration has been given to the possibility of private sector equity participation. We consider it not advisable to pursue this for the following reasons
(a)
(b)
a
pre-requisite
for inviting equity participation is the setting up a new legal entity or enlisting an existing corporation (such as MTRC or the Airport Authority when established) to "own" the Lantau Fixed Crossing. This, in essence, means we are reverting back to some form of privatisation. Either way, considerable time and work will be involved in setting up the required statutory and administrative framework. Given that the project is on the critical path to the opening of the airport, this could cause irrecoverable delay in the completion of the project and in turn affect the whole PADS programme;
The
based on the financial study undertaken by Kleinwort Benson Ltd, the Lantau Fixed Crossing is only marginally viable in terms of attracting private equity investment. potential equity investors will therefore look upon Government to provide certain assurances to safeguard their investment and to provide a reasonable return.
In the absence of such assurances,
the opportunity cost for construction companies to take an equity position in the whole Lantau Fixed Crossing Project in order to
secure a construction contract would be disproportionately high.
No comments yet.
Private notes are available after approval.