The Financial Secretary, Mr Donald Tsang, today spoke of the widespread benefits to Hong Kong's economy as a whole of the Hong Kong Disneyland project.
Mr Tsang, who is in London, was taking part in a press conference at the Central Government Offices in Hong Kong through a special video-link.
Describing the project as an infrastructure investment, he said it would generate returns not only for the government "but for ordinary people who are operating restaurants in Hong Kong. Our hotels will benefit. Our tourist industry will benefit. Our airlines will benefit. And all the retail shops will benefit as a result of more tourists coming to Hong Kong".
Mr Tsang said that viewed in the light of the benefits to the entire economy, Hong Kong had "a good deal". This was based on the net economic benefit in present day values over 40 years of $148 billion and an economic rate of return in real terms of 25%.
"Even on a return basis it is a much better investment from our point of view than some other infrastructure programmes."
On the question of more tourists from the Mainland, the Financial Secretary said there would definitely be an increase in the numbers. However, there was still about six years to study the matter and talks would be held with the relevant authorities on arrangements to make it more convenient for Mainland tourists to visit Hong Kong.
"I think this can be done," he added
The Government Economist, Mr K Y Tang, who also took part in the press conference, said the Hong Kong Disneyland project should increase Hong Kong's GDP by 0.4 per cent a year.
"In other words, for this project alone, it is tantamount to expanding the tourism sector [which contributes about 4% to GDP] by one-tenth [or 10%]," he said.
On the financing arrangements, the Commissioner for Tourism, Mr Mike Rowse said the government and Disney had learnt lessons from the experiences of Paris Disneyland. One lesson was that Paris was over-leveraged with the debt equity ratio highly weighted in favour of debt and only a relatively small amount of equity.
"That is why we have gone for a much more prudent ratio of 60 : 40, which we think is appropriate for this kind of project. The project finances are also very robust and can cope with a very considerable degree of downside and still pay off the commercial loan and the government loan on time within the 25 years," Mr Rowse said.
End/Tuesday November 3, 1999