ENG-1993 — Page 307

THE AIRPORT CORE PROGRAMME

Implementing and Financing the ACP

The ACP is being implemented by the government, two statutory corporations wholly owned by the government, and a franchisee appointed for the WHC. The government is carrying out direct capital works projects to reclaim land and to build highways and a new town near the airport. The PAA is responsible for planning and developing the airport until a permanent statutory body is established. The Mass Transit Railway Corporation (MTRC) is responsible for building and operating the airport railway. The WHC is being designed, built and operated by the Western Harbour Tunnel Company Limited under a 30-year franchise.

The cost of the 10 ACP projects was estimated in 1992 to be $163.7 billion in MOD. (Sometimes known as out-turn prices, MOD takes into account the impact of inflation on the value of the dollar while projects are designed and built, providing a realistic projection of out-turn prices. This is particularly relevant to the ACP because most contracts are let on a fixed-price lump sum basis, which means that contract prices have been adjusted to cover inflation over the contract period.)

Within the $163.7 billion, the government's capital expenditure is estimated at approximately $60 billion. This is expected to amount, between 1992-93 and 1996–97, to 25 per cent of the government's total capital expenditure. The remaining 75 per cent of its capital expenditure will be spent on social services projects and other essential construction activities.

The ACP cost estimate is being reviewed and is expected to be reduced to $158.2 billion in MOD.

The programme provides extensive opportunities for private sector participation. Besides the franchise for the WHC, these include a range of important commercial franchises at the airport, plus commercial lending and real estate development associated with the airport and the airport railway.

Benefits for the Community

The main benefits for the community, in addition to the airport itself, will come from improved road and rail facilities, which will ease congestion in West Kowloon and open up North Lantau. The closure of Kai Tak will also provide substantial environmental benefits for the 350 000 residents living under its flight paths, who will escape the noise of aircraft. The overall benefits to Hong Kong's economy will also be substantial.

The government's proposed financial investment in the projects will yield substantial benefits for taxpayers. It is estimated that by the year 2020, the new airport, the Lantau Fixed Crossing, and the airport railway will generate over $300 billion in additional revenue for the government.

Formation of Land

The ACP involves the creation of 1 669 hectares of new land, comprising a 1 248-hectare platform for the new airport (composed of 920 hectares of reclaimed land, and the islands of Chek Lap Kok and Lam Chau off northern Lantau, which will be levelled); 67 hectares of reclamation along the northern shore of Lantau for Phase I of Tung Chung new town; a 334-hectare reclamation at West Kowloon; and a 20-hectare section of a larger reclamation adjacent to Central and Western districts on Hong Kong Island.

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