ENG-1978 — Page 241

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COMMUNICATIONS AND TRANSPORT

The total estimated cost of the modified initial system is $5,800 million at prices adjusted for escalation to 1980. Of this sum, about $5,000 million is for contract costs while $800 million covers administration costs, land costs and consultants' fees. The government contribution, in return for equity, will be $800 million.

Much of the finance for the railway is in the form of export credits covering con- struction and equipment contracts placed with overseas companies, with the balance funded by both local and international loans. All debts are expected to be repaid by 1991-2.

Following the government's approval in 1977 of an extension of the modified initial system to Tsuen Wan, tenders were called by the corporation in May, 1978. The first major contracts were awarded in October and work is now under way. The Tsuen Wan extension is 10.5 kilometres long and has 10 stations. The estimated cost, in- cluding escalation to the end of 1982 when the line will become operational, is $4,100 million. It will be financed entirely by loans raised by the corporation.

During the year, the corporation entered into a joint venture with two local property developers to develop the area above Tsuen Wan depot into a commercial - residential complex with flats for 20,000 people. Sales in respect of the other three property de- velopment schemes - above Kowloon Bay depot and Admiralty and Chater stations – began during the year.

Inconvenience arising from the construction of the modified initial system lessened somewhat as civil engineering work moved underground. Close liaison continued to be maintained between the corporation and various government departments con- cerned with the construction of the railway.

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In July, the corporation was approached by the government to assist in detailed studies for a light rail system on the north shore of Hong Kong Island to replace the existing tramway, with a view to the corporation developing and operating the system.