Tradelink, the government-private sector venture to provide electronic documentation for import-export firms, faces a vital test tomorrow when the Legislative Council finance committee will decide whether to approve a $425 million loan facility to the troubled business.
According to a report by consultants of the venture, 'with funding running out at the end of May, Tradelink's position is untenable'.
Tradelink was formed by 11 firms in 1988 with the intention of gradually replacing paper documentation for the entire import-export business of about 80,000 firms.
It has staggered from one disaster to another, however, with deadlines missed due to lack of commitment from the Government and an unwieldy structure.
It has so far cost public and private purses about $157 million and has liabilities of $180 million, according to Tradelink and the consultancy report.
The loan is being asked for because the 11 firms, including Hongkong Bank, China Resources (Holdings) Co, Hongkong International Terminals, Hong Kong Telecommunications, Standard Chartered and Swire, will not agree to put in further equity.
Tradelink's acting general manager Griff Griffith said: 'Originally, it was intended that Tradelink generate an internal rate of return of 18 per cent, but that only applied from the operating agreement in 1994, six years after the initial investment. It is now clear the rate will actually only be 8 to 10 per cent.' The Hong Kong General Chamber of Commerce has already written off its investment in the project although it wishes to see it continue.
