With Chinese backing for the Western Harbour Crossing - the largest privatised infrastructure project in Hongkong - finally forthcoming, it is believed the myriad of other airport projects, which have also been on hold because of the previously stalled British-Sino talks, will soon kick-start into action. THE first major move towards full Chinese backing for the financing of the entire Airport Core Programme has been signalled with the approval for the Western Harbour Crossing franchise. The go-ahead from China on the largest privatised infrastructure project in Hongkong is seen by financiers as a major source of encouragement for the billions of dollars of borrowing needed to finish the airport, the airport railway, and the crossing. The Western Harbour Crossing will be a dual three-lane tube connecting Hongkong island with the West Kowloon Reclamation. As well as providing access to the new airport from Hongkong island, it will help relieve existing congestion in Hongkong and Kowloon. The franchisee, the Western Harbour Tunnel Company, is 35 per cent owned by the China International Trade and Investment Corporation (CITIC), and 13 per cent by China Merchants, another mainland group. ''We are delighted to have this project approved, and I think its quite a good development,'' said CITIC executive director Mr Peter Lee. ''We are pleased that the Chinese side of the Airport Committee has given the go-ahead to the Western Harbour Crossing. ''The next step is the passing of the legislation and the franchise through the Legislative Council [Legco], and we look forward to the project starting as soon as possible,'' said Mr Lee. Mr Gerry Higginson, chairman of the Cross-Harbour Tunnel Company Ltd, which is a 37 per cent shareholder in the franchise said: ''We are delighted that the Airport Committee has agreed with the Western Harbour Crossing scheme going forward on a Build, Operate and Transfer (BOT) basis. ''What we are now looking forward to is the enactment of all the necessary legislation so we can fund the project and start construction.'' ''This is the largest-ever BOT project awarded by the Hongkong Government. It's almost a billion US dollar project. The fact that its now going forward, with approval and support of the Chinese Government is a great sign for Hongkong,'' Mr Higginson said. The other shareholder in the franchise is a Kerry Tradings of Singapore, with a stake of 15 per cent. The Mass Transit Railway Corp's (MTRC) finance director, Roger Moss, was also encouraged by the Chinese action on the crossing. ''I think it's a very significant step. There is no doubt about that,'' said Mr Moss. In a separate event, Legco's Finance Committee approved $562 million in operating funds for the Provisional Airport Authority (PAA), which enables the authority to carry on with the construction of the airport island, the design of the terminal, and numerous other projects, while talks on the main equity injection financing plan can continue. The PAA's finance director, Jamie Dundas, said the authority was delighted that this further central funding had been approved. ''It secures the basis for our essential head office and airport planning operations through the remainder of this financial year, and will enable the authority's design programme to continue as planned,'' he said. Further Airport Committee talks are expected to establish an agreed level of debt and equity for the airport's financing plan. The Legco's Finance Committee is expected to vote equity for the PAA use as the basis for its approach to international lending markets. The equity is likely to be higher than the $16.6 billion in the original financing plan, because the Chinese are believed to be interested in reducing the level of debt for the authority. The Legco Finance Committee has already voted advances of $14.6 billion to the PAA, of which the PAA has drawn only $6.6 billion so far. The undrawn balance of $8 billion, which has been committed already by the Legco Finance Committee, remains dedicated to the PAA, to be drawn when the PAA requests it. The ordinance, which will turn the PAA into the Airport Authority (AA), is now in its final stages of preparation by the Economic Services Branch. Once the Legislative Council passes the AA Bill, and the Chinese approval for the equity injection has been given, the authority can then begin raising the debt necessary for the completion of the airport. The AA Bill is modelled after the MTRC Bill, but with significant differences because of the international nature of the airport. Government sources close to the projects said the key task now is to get the overall financing plan agreed with the Chinese in the Airport Committee, and remain hopeful that the increasing climate of goodwill and co-operation will lead to a rapid conclusion of the discussions on the airport financing. The Bank of China is sure to have a role in the financing of the airport-related projects, as written in the Memorandum of Understanding. The Bank of China is thought likely to support the CITIC effort to raise it's portion of debt for the Western Harbour Crossing franchise. The MTRC is likely to operate in the bond market, with major issues in Samauri, Yankee, or Eurobonds. The AA is likely to do more commercial bank borrowing, and dealing with export credit agencies. Project engineers are also hopeful for a breakthrough any day on the Central Reclamation. This will not only provide the base for the Airport Railway's Hongkong Station, but will also provide a base for future east-west traffic relief when the entire Central and Wan Chai Reclamation is completed.