ENG-1995 — Page 304

THE AIRPORT CORE PROGRAMME

as possible. The Chinese side also reaffirmed its support for the new airport and related projects.

The MOU provides that an AA will be established and that the ordinance setting up the body will be modelled, as far as possible, on the MTRC Ordinance. After consultations with the Chinese side of the Airport Committee in accordance with the MOU, a Blue Bill was introduced into the Legislative Council in May and was passed in July. The Airport Authority Ordinance came into operation on December 1.

Implementing and Financing the ACP

The ACP is being implemented by the government, two statutory bodies wholly owned by the government, and a franchisee for the Western Harbour Crossing. The government is responsible for seven of the 10 projects, which cover land reclamations and the construction of highways and a new town near the new airport. The AA is responsible for building and operating the new airport. The MTRC is responsible for building and operating the Airport Railway. The Western Harbour Crossing is being designed and built, and will be operated, by the WHTC under a 30-year franchise. The 10 ACP projects are projected to cost $158.2 billion in money of the day (MOD) value (sometimes known as out-turn prices). This takes into account the impact of inflation on the value of the dollar while projects are designed and built. 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.

Under an agreement on financing arrangements for the new airport and the Airport Railway signed in November 1994, the government will inject equity of not less than $60.3 billion into the two projects. The government will therefore meet a total of $112.8 billion, or more than two-thirds of the total ACP cost, in the form of direct funding of works projects ($52.5 billion) and through equity injection ($60.3 billion) into the AA and the MTRC.

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 the West Kowloon and Kwai Tsing areas, besides opening up North Lantau. The closure of the existing airport at Kai Tak will also provide substantial environmental benefits for the 350 000 residents living under its flight path, who will escape the noise of aircraft.

The projects will also provide further local job and business opportunities. The projects have already generated more than 16 800 job opportunities for local workers during the construction period. It is estimated that the new airport and the Airport Railway alone upon opening will create 6 000 new jobs.

The New Airport at Chek Lap Kok

Development of the new airport has entered its most intensive phase. In 1995, the focus shifted from design and site formation to above-ground construction, coupled with the finalisation of many institutional arrangements and agreements essential to the completion and operation of the new airport.

After the Airport Authority Ordinance was enacted, the PAA was reconstituted as the AA when the Ordinance came into operation on December 1. It is a government-

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