Private sector paid its share
CHRIS DAVIS The Western Harbour Crossing cost three times as much to construct as the Eastern Harbour Tunnel and 20 times more than the Cross Harbour tunnel which opened in 1972.
The tunnel and associated infrastructure was the only Airport Core Project funded by the private sector. By inviting the private sector to raise the $7.5 billion required to build, operate and transfer (BOT) the crossing, the Government saved sufficient money to finance 150 standard-sized primary schools, 28,000 public housing units or 125 secondary schools.
Patrick Ho, the Western Harbour Tunnel Company's finance and material manager, said the high capital cost of the project was partly due to the construction and transfer facilities paid for by the tunnel company.
He said 17 bridges and approach roads had been financed and built for the tunnel company but handed over to the Government on completion.
Mr Ho said the tunnel company also had made a one-time payment of $120 million to the Government to provide residents in the Sai Ying Pun area with double glazing, improved air-conditioning and upgraded electrical supply to reduce noise levels during construction and operation of the tunnel and on approach roads.
He said the finance department was responsible for securing loans, making loan repayments, handling surplus cash, general accounting and financial accounting.
'There is a strong emphasis within the company to put management accounting into practice which is going further than meeting auditors' requirements,' Mr Ho said.
Management accounting includes gathering, analysing and interpreting accounting data so the management team can make sound business decisions based on the information provided by the finance department.
Mr Ho said the finance and material department was also required to provide the Government and lenders with detailed reports on the business activities of the company.
He said because of the large sums of money involved in the project, the company was taking a long-term view towards its borrowing.
He said at least 50 per cent of the loans were hedged into fixed interest rates for between two and five years which meant the impact of interest rate movements and fluctuations was reduced.
'This is an important management strategy that is converting something uncertain into something certain regarding bank repayments and fluctuations in the market and reducing financial risk,' Mr Ho said.
A major area of activity for the finance department involved the purchasing and store team ensuring stock levels were maintained so the engineering department was supported with resources in order to maintain the smooth operation of the tunnel.
The integrated stores and accounting computer system allowed stock levels to be monitored and assisted in the day-to-day operation.
Mr Ho said the computerised accounting system linked to the toll booths would provide up-to-the-minute information on the type of vehicles using the crossing and in which direction traffic was travelling, thereby helping to match the service with public demands.