Pending that agreement, the Authority's activities continue to be funded by advances from the Hong Kong Government. The position as at the end of October 1992 was that the Authority had spent HK$1,886 million of such advances, out of a committed total which then stood at $7,330 million. Since the unspent balance would not have been sufficient to fund the Site Preparation Contract and associated costs, the Hong Kong Government sought a vote of further funds from the Finance Committee On 27 November, additional funding was of the Legislative Council. duly voted bringing the total of committed amounts available for drawing to HK$12,143 million. This is sufficient to enable the Authority to complete the Site Preparation Contract and associated site works, and to meet other design and planning costs and commitments it must incur between now and 30 June 1993 in order to maintain its programme. By that date, the Authority will of course only have spent a small proportion of the HK$12,143 million, but on the other hand substantially all of it will have been committed; it follows that at that time, further commitments of funds will be needed to enable the Authority to award future design and construction contracts.
Between now and mid-1993, we earnestly hope that a clear and satisfactory agreement on airport financing will indeed be reached. Despite current political difficulties, we have no reason to doubt the commitment of the parties to last year's Memorandum of Understanding. The need for a replacement airport in Hong Kong is growing more obvious and urgent as every month passes.
As and when agreement is reached, the advances already committed will be converted into equity, which will be topped up by Government to whatever level of capitalization is eventually settled; as you know, the minimum suggested amount has been $16,600 million. Our estimate of the Authority's total costs to airport opening remains unchanged at HK$48,200 million before financing costs. The exact level of equity eventually agreed will determine our borrowing needs over the next four years. It remains the case that at the lowest likely level of capitalization, our forecast expenditure to stay on programme for airport opening in mid-1997 will be able to be met from equity until the second half of 1994, as previously advised. As a matter of prudence, however, it would be our firm intent to make a first approach to markets as soon as all credit pre-conditions were met. Apart from the essential agreement with China, the most important of these is the enactment of the law ("Ordinance") governing the Authority's permanent functions.
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