TNAG-2414-FCO40-3516-Hong-Kong-Port-and-Airport-Development-Strategy-(PADS)-fina-1992 — Page 111

7

10.05

5. The figures in these papers are estimates made for planning

purposes: the Airport Authority will obviously need to adjust its

plans on a continuous basis in future to take account of

developments.

Return on Investment

The return on equity investment by the Hong Kong Government

is determined by calculating the internal rate of returns of:

1. drawdowns of equity provided by the Government during

construction of the airport; and

2.

cash flows from dividends distributed to the Government

starting after the project debt has been paid off and

continuing until 2040.

7.

The return on the base case is estimated at 14.66 per cent,

while that for the downside case is estimated at 13.5 per cent.