MTR airport proposal 'considered'

THE Government has already taken into account a Mass Transit Railway Corporation proposal on funding of the airport rail link which would do away with the controversial need for callable equity.

The MTRC has suggested replacing the $12.5 billion callable equity, the major sticking point in Sino-British negotiations on financing for the airport, with a huge cash injection into the rail company from Hongkong's Land Fund.

According to legislator Mr Albert Chan Wai-yip, the Government was unwilling to reveal details of the plan, but maintained that the MTRC's views had been considered.

The Secretary for the Treasury, Mr Yeung Kai-yin, was quoted as saying the latest funding proposal already addressed Chinese concerns over callable equity and cost-effectiveness.

On Chinese objections to using Land Fund cash, Mr Yeung reiterated that the British side was willing to listen to China's views on the proposal to inject a total of $40 billion into the railway body and the Airport Authority instead.

While welcoming the MTRC proposal, a member of the Chinese Airport Committee team, Mr Chen Keqiang, said no date for the next round of talks by the Airport Committee could be fixed.

He reiterated China's objection to Hongkong's earlier proposal that Beijing should consider using half of the Land Fund proceeds derived from land sales along the airport railway to finance the project.

But Mr Chen noted that the issue of callable equity was only part of the problem of the whole airport financing plan, adding that the Hongkong Government should put forward new proposals to lower the total cost of the whole airport project.

He said China had consistently called for the abolition of the callable equity provision of the airport railway project.