CONFIDENTIAL
(a)
(b)
the terms offered were not better than terms currently available in the market and did not appear to offer more than could be obtained by approaching the market at a later date, when more construction/institutional progress would be visable; and
the offers failed to meet our aim of transferring the debt unconditionally to the franchisee. They were available on the basis that either the Government bororows directly or that the Government fully guaranteed the borrowings of the franchisee. Such guarantees would create a contingent liability for the future Special Admnistrative Region Government. Given the present negotiating position of the Chinese, these offers were unattractive.
XCC(979
33
CTB advised on 26 March 1992 that none of the finance offers should be pursued. All tenderers were informed of this.
FINANCIAL AND STAFFING IMPLICATIONS
34
In July 1991, Finance Committee approved a project estimate for the Lantau Fixed Crossing, within which $6,230 million (March 1991 prices) was attributed to the Tsing Ma Bridge. This latter provision includes $5,197 million for construction works, $510 million for consultancy fees, resident site staff and project management, and $523 million for contingencies. It excludes allowances for inflation and interest.
35
As the tender price for the Anglo-Japanese Consortium for the Tsing Ma Bridge construction works is $7,144 million (at money of the day prices), we shall need to seek the Finance Committee's agreement to increase the project estimate before the contract is signed. We believe that approval can be secured, because the money-of-the-day equivalent of the figure of $5,197 million is $7,186 million, which exceeds the tender price of $7,144 million. Even excluding the contract contingency sum of $523 million approved by Finance Committee, the tender has come in well within the engineer's estimate.
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Private notes are available after approval.