TNAG-2412-FCO40-3507-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-pres-1992 — Page 43

AIRPORT RAIL FINANCIAL PACKAGE

(Paper

handed over to the Chinese on 11 February and to the ACC on 16 April 1992; draft agreement with the MTRC handed over to Chinese on 20 March 1992.)

Main Features

*

*

-*

*

*

The

Airport Railway (AR) will cost $22.16 BN (1991) [$33.5 BN (MOD)] to build.

The Government will provide total equity to the MTRC of $16.2 BN (MOD). $3.7 BN

(MOD) will be paid up in 1993.

The Government will undertake to pay the balance as callable equity of up to $12.5 BN (MOD) to meet specified adverse risks (cost over-run, high inflation, no property development profit, low revenue from existing operation, low revenue from the AR operation and high interest rates.)

The Government will make up revenue lost to the MTRC if the AR opening is delayed because of delays in Government's works. Maximum up to two years with 2 months' grace period. Maximum contingent liability is estimated to be $1.5 BN (MOD)

MTRC will be allowed to develop commercial property in connection with the AR stations. They will pay full premium to the Government ($42 billion at 1991 prices). Normal sharing with the SARG land fund.

Government will forego dividends from the MTRC until equity is restored.

Airport Rail : p. 1 of 2