Question Four: Can you give an indication of when these rands that you say will be generated from land sales from the reclamation at Kai Tak will be realised?
Mr Macleod: They are spread over quite a long period. Obviously the Kai Tak side of it would come after the opening of the new airport, by definition. Some of the land which will become available on the West Kowloon Reclamation would be much earlier than that. And some of the land which would become available on Lantau would also be during the period up to '97.
Question Five: So, whilst most of it will be able to offset the expenses of the airport it will not be able to be applied to the construction of the airport?
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Mr Macleod: That is right. We haven't, as it were, tied the two things closely together.
What we have to try and draw attention to is the fact that what we are concerned with here isn't simply expenditure that there is a revenue side of the picture. The revenue side is partly land sales. It is partly that some of the projects themselves generate income. Obviously, the fixed crossing will generate a toll revenue. Or perhaps later a sale of a franchise revenue. Clearly an airport has revenue, both from landing charges and from commercial operations, rather lucrative duty free shopping and so on. were are not just concerned with expenditure. We are concerned with revenue, we are concerned with investment, and that is why we tend to come back to these things.
Question Six: Surely there are parties who are concerned with expenditure such as Hong Kong's taxpayers and the Chinese. What is it that you are telling to them to assure them that this airport will not be a big credit risk after 1997. There seems to be a lot of confusion on the Chinese side as to exactly what Hong Kong has at its disposal to pay for this project.
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Mr Macleod: The Financial Secretary in his recent speech in Legco gave the figures. I think they are pretty clear ones. That on the one hand you have these figures here, the period up to 97
about 79 billion part of which will be met by the private sector. On the other hand we have the existing government fiscal reserves of over 70 billion dollars and we also have, of course, the Land Fund which will be gradually building up to a figure of, also as it happens, of over 70 billion dollars by about 97. So, if you look at those figures and then remember the revenue side of the picture as well you begin to see, think, certainly we believe it to be the case, that we can well afford these projects.
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Question Seven: (inaudible) ...the PRC government has expressed quite strongly that they don't agree the government to draw the fiscal reserves to build the airport.
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