TNAG-2413-FCO40-3515-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-fina-1992 — Page 48

14

b)

use that

of Kai Tak surplus

in June

the 1997,

on the assumption

the airport project is completed on time Kai Tak surplus (all all costs) will of Government

revenues after

cease to

Revenue.

subtracting

source

as a exist

To

enable the AA to meet its debt

service obligations

in the event of a delay it will be necessary

in project completion,

AA.

to provide for the surplus generated by the extended operation of Kai Tak to flow to the of the Special Government the

not would to receive event,

Tak, this arrangement is

Since Administrative expected, in any

revenues

Region

Kai from

have

these

not considered to have created any contingent liability for the future Government:

24.

c)

increased passenger event of project

terminal charge delay,

in the

the other main

revenue

the increasing

passenger

d)

support for debt service obligations

will be from

terminal charge beyond the $50 (at March 1991 prices) assumed in the 'base case'; and

lower traffic

deferral of second

construction of deferred since need to

the this

runway

-

in the event of the growth,

timing for the second runway could be timing is linked to the This traffic demand. with cope deferral of costs would significantly assist the cashflows in coping with events.

Additional Government

such adverse

equity would be required to the AA in a "low case"

support the financial position of scenario because the level of debt has been maximized in the "base case". It would therefore probably not be possible to more debt. It is by raising "low case" deal with the

of keeping to a a strategy considered that nevertheless,

equity and maximizing private initial Government minimum

"base

is correct for the in

case" borrowings sector following reasons :

the

accords

our with

of

contribution

overall objective it (a)

seeking the greatest possible

from the private sector to the funding of the project: