TNAG-2146-FCO40-3065-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-1990 — Page 87

main considerations -

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(a) to keep the overall costs down

whilst still achieving an efficient airport and

port; and

(b) to keep public sector costs to the

minimum, by encouraging private sector participation where this makes financial sense. This not only brings in private sector

funds but also the commercial discinlines

and efficiencies of the private sector.

Cross Harbour Tunnel, the Fastern Har-

bour Crossing, the Tate's Cairn Tunnel, the

container terminals, and a range of facilities

at the Kai Tak Airport (such as catering, air

cargo terminal, aircraft maintenance) have

in the past been largely or wholly funded by

the private sector.

PRESENT POSITION

7.

5.

On the basis of data established (at the level considered appropriate for a strategic study), we estimated in 1989 that

the private sector should fund 40 per cent to

60 per cent of the cost of PADS. (If these

figures were adjusted to take into account

the recent decision that Government not the

private sector will build the Lantau Fixed

Crossing, the higher range of private sector

share decreases to 55 per cent. The lower

range does not change as it was already

based on a hypothetical scenario which

assumed that Government took over this

project.)

6.

In anticipating a substantial

private sector participation, we were very

much building on our successful experience.

In particular, it is worth noting that major

projects like the Mass Transit Railway, the

Since October 1989. financial planning has advanced on various fronts. including.

(a) the completion of the financial

study on the Lantau Fixed Crossing and the

Administration's decision to finance the

project instead of inviting bids on a 'Build,

Operate and Transfer' basis. There are

programming and cost advantages in this

approach, which enhances the certainty of

the whole programme. Moreover, a better

price could be obtained if the franchise to

operate the crossing was sold (partly or

wholly) when traffic revenue was clearer;

(b) the undertaking of two other proj-

ect financial studies to develop the optimum financing strategies for the airport railway

and the new airport at Chek Lap Kok; and

(c)the undertaking of an overall finan-

cial study on the implications of implement- ing the chosen Port and Airport Develop- ment Strategy on the Government's fiscal

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