ENG-1981 — Page 229

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COMMUNICATIONS AND TRANSPORT

three to five minutes during off-peak periods. While the weekday passenger volume aver- aged around 700 000, more passengers were carried on Saturdays while Sundays and public holidays had the lowert patronages. A record figure of 996 000 passengers was carried on Thursday, November 24, 1981 as a result of extended operation over Christmas Eve. About 40 per cent of the passengers are carried across the harbour. It is anticipated that the MIS will carry up to one million passengers a day by the mid-1980s.

High interest rates on commercial borrowings prevailed throughout the year and had a severe financial effect upon the corporation in view of its loan/equity gearing of 8:1. Largely because of this the government agreed to purchase in cash a further $3,500 million equity in the corporation which reduced the loan/equity gearing to a more normal ratio of 2:1.

The Tsuen Wan Extension (TWE) is expected to start service in May 1982 - some six months ahead of schedule - and will provide a link to the growing industrial town of Tsuen Wan in West Kowloon. It will be 10.5 kilometres in length and branches from the Modified Initial System at the northern end of the Nathan Road. It will incorporate 10 stations. The cost of the extension is $4,100 million and it is anticipated that it will be completed on budget.

After opening of the Tsuen Wan Extension it is anticipated that the combined MIS/TWE system would attract at least 1.1 million passengers daily and that would grow to 1.8 million by the mid-1980s.

As was the case with the MIS, the financing for the construction of the Tsuen Wan Extension is in the form of export credits covering construction and equipment contracts placed with overseas companies, with the balance being funded by local and international banks. All loans raised to finance the construction of the MIS and TWE are expected to be repaid by 1992-3.

Three property developments being undertaken by the corporation were completed during the year. These were commercial developments above Admiralty and Chater stations, and a residential and commercial development above its depot at Kowloon Bay. Work on four others - at Argyle and on the TWE at Kwai Fong and Kwai Hing and above the depot - continued.

A great deal of work was undertaken during the year in designing a third underground line for Hong Kong Island - to be called the Island Line. Government gave the go ahead to proceed with the construction of this line in December 1980. Several pre-works contracts were let during the year with the first major civil engineering contracts being awarded in December. The bulk of the major civil engineering contracts will be awarded during the first quarter of 1982.

The line - along the island's crowded northern shore - will link Chai Wan with Western Market and will feature 14 stations. It is estimated that the cost of the Island Line in 1980 dollar terms, not including interest charges, will be $7,000 million.

The financial approach for the construction of the Island Line will be different from that followed on the MIS and TWE. It is intended that property development profits will be used to pay for the construction cost and that the remainder of the money necessary will come from government equity and Export Credit Finance in Hong Kong dollars and at fixed rates of interest. Fourteen major property development sites have been earmarked and, during the year, eight agreements were signed with property developers. The largest site is at Tai Koo Shing where a development featuring both private and government housing will be constructed to accommodate 40 000 people. It is anticipated that the majority of the Island Line between Chai Wan and Admiralty will be completed in mid-1985 with the remainder from Admiralty to Western Market in 1986.