TNAG-2466-FCO40-3590-Economic-situation-in-Hong-Kong-1992 — Page 22

Airport Pre-qualification

The Provisional Airport Authority has opened the bidding for the cargo handling and aircraft maintenance activities at Chek Lap Kok with the launch of a worldwide call for pre-qualification proposals. Under the existing arrangement at Kai Tak, Hongkong Air Cargo Terminals Ltd (HACTL) and Hongkong Aircraft Engineering Co (HAECO) have sole franchises. However, the PAA says it is not precluding the option of a single operator in each activity.

Air Cargo Up 15%

The amount of air cargo handled in Hong Kong in April climbed to 76.1 million kilograms, an increase of 15 per cent over the same month last year. Imports rose 28 per cent to 34.2 million kg. while exports were up 12.5 per cent to 35 million kg, but transhipments dropped 20 per cent to 6.8 million kg.

New Airport A Robust Business

Revenues generated by the new airport at Chek Lap Kok will rise steadily to reach_HK$22.7 billion (US$2.91 billion) a year in 2010, providing an operating profit of HK$10.39 billion (US$1.33 billion) after recurrent and capital expenditure and tax payments. Official financial projections show that annual revenues will pass HK$17.32 billion (US$2.22 billion) in 2005, sufficient to cover all the Airport Authority's costs and enable initial project debit of HK$37 billion (US$4.74 billion) to be fully repaid by that year. Dividends totalling about HK$56 billion (US$7.18 billion) are expected to have been paid to the government by as early as 2010, on a cumulative basis. This return compares with an investment by the government of only HK$16.6 billion (US$2.13 billion) equity in the Authority. The operating profits will start in 1997, the year the new airport opens.

Hutchison Bid for Cavendish

Hutchison Whampoa is making a HK$5.84 billion (US$750 million) bid to privatise Cavendish International. Hutchison has proposed to offer HK$ 5.50 for each Cavendish share, a premium of 32 per cent over its closing price of HK$4.175 on the Hong Kong Exchange on 26 May. The offer values the entire share capital of Cavendish at HK$15.94 billion (US$2 billion). It's the second time in the past 16 months that Mr. Li has attempted to privatise Cavendish - the first bid failed.