CONFIDENTIAL
056371 MDHIAN 7965
THE PROSPECTS OF SLIPPAGE AND INCREASED COSTS IF WE DO NOT GO AHEAD. WE ARE THEREFORE CONVINCED THAT IT WOULD BE BEST TO AWARD THE CONTRACT, WHILE KEEPING UP OUR EFFORTS TO REACH AGREEMENT WITH THE CHINESE SIDE,' SAID THE SPOKESMAN.
THE FINANCE COMMITTEE WOULD BE ASKED TO APPROVE AN ADDITIONAL ADVANCE TO THE PAA OF HKD8.63BN FROM THE CAPITAL INVESTMENT FUND. THIS WOULD ENABLE THE PAA TO MEET THE FULL CONTRACTUAL COMMITMENTS AND ASSOCIATED EXPENSES FOR THE SITE PREPARATION CONTRACT, PLUS OTHER AIRPORT PLANNING AND OPERATING COSTS AND COMMITMENTS FOR THE PERIOD TO JUNE 1993 WITHOUT BORROWING. TOGETHER WITH HKD7.3BN ALREADY APPROVED, THE GOVERNMENT'S TOTAL ADVANCE TO THE PAA WOULD COME TO HKD15.96BN.
'THE TOTAL ADVANCE TO THE PAA OF HKD15.96BN IS WITHIN THE HKD16.6BN EQUITY WHICH THE HONG KONG GOVERNMENT PROPOSED ITS ORIGINAL FINANCING PLAN TO INJECT INTO THE PAA. SINCE THE GOVERNMENT'S FORWARD BUDGETING HAS ALREADY ASSUMED THIS COMMITMENT OF EQUITY, THE GRANTING OF THIS ADDITIONAL ADVANCE WILL NOT HAVE ANY IMPACT ON THE GOVERNMENT'S SOCIAL SPENDING, ITS OTHER EXPENDITURE PROGRAMMES, NOR ITS FORECAST RESERVES, THE SPOKESMAN.
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THE PAA ANNOUNCED ON JULY 31 THAT IT HAD SELECTED THE AIRPORT PLATFORM CONTRACTORS JOINT VENTURE TO CARRY OUT THE CONTRACT, WHICH INVOLVES FORMATION OF THE 1,248-HECTARE SITE. THE CONSORTIUM HAD SUBMITTED THE LOWEST TENDER ON A FIXED PRICE LUMP SUM BASIS, WITH A PRICE OF HKD9.041BN.
THE PROPOSED FUNDING WOULD BE DISCUSSED WITH MEMBERS OF BOTH THE LEGCO AD HOC GROUP ON THE FINANCING OF THE ACP AND THE AIRPORT CONSULTATIVE COMMITTEE. THE CHINESE SIDE OF THE JLG AIRPORT COMMITTEE HAS BEEN INFORMED OF THE DECISION.
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