CONFIDENTIAL
(e)
(f)
(g)
A Master Layout Plan and site plan will be attached to the lease indicating provisional layout and identified SARA land.
The AA will make provision for a MTRC reserve for the railway lines and station to be provided on the airport island without charging a premium or rent for the land taken.
Government reserves the right to provide its own facilities, required for the operation of the airport, on the airport island without payment of rent or premium. Government will pay the construction costs of any facility so built and would, on completion, bear appropriate management and maintenance charges.
XCX(92)1
Premium
9
The question of premium requires special consideration. The AA is responsible for the cost of site formation, currently estimated at $8.5 billion. In addition, the AA will be responsible for provision of services such as water and drains and of internal roads. The total cost of reclamation and provision of roads and services, assessed at 1991 prices, will be about $17 billion, including professional fees. Since these costs will be spread over the construction period, it is necessary to discount them to reflect this. When this is done the present value of the works to be carried out is about $10.8 billion. Set against these costs are the revenues, which the Authority will receive from sub-leasing the land for airport support and airport related activities. We propose to treat the three types of land identified at paragraph 4 as follows -
(a)
Airport operation - the Administration should not require the AA to pay premium for land for airport operations as the AA will be bearing not only the cost of site formation but also the cost of constructing the airport facilities. There is an analogy with the MTRC Running Lines Lease, whereby land for railway lines and stations without development rights is granted at nominal premium.
Executive Council
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