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Disposal of Government assets
Securitization of Government future revenue receivable
from tolls bridges and tunnels
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| Date
| Context
| Summary of development
| Action
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|---|
| 5.1.04
| FA
| The Financial Secretary (FS) announced in the 2003-04 Budget the Government's intention to dispose of or securitize $112 billion of assets in the next five financial years and set a target to raise an estimate of $21 billion in 2003-04. On 17 December 2003, the Secretary for Financial Services and the Treasury gave notice that he would, at the Council meeting on 14 January 2004, move a resolution under section 3(1) of the Loans Ordinance (Cap. 61) to seek the LegCo's approval to authorize the Government to raise up to $6 billion through securitizing its revenue from tolls on bridges and tunnels for the purpose of the Capital Works Reserve Fund established by resolution passed under section 29 of the Public Finance Ordinance (Cap. 2). A LegCo Brief on the proposed resolution was issued to all Members on the same day. [LegCo Brief and Loans Ordinance (Cap. 61)]
The Panel was briefed on the proposed resolution at its meeting on 5 January 2004. Members expressed concern over the lack of details of the proposed securitization exercise, such as the estimated costs, structure and target investors of the exercise, and recourse obligations of the Government. Members also expressed concern over a number of issues relating to the proposed resolution, including implications of changing traffic volume and changing tariff/toll rates on investors and the Government, as well as the experience of securitization in overseas jurisdictions.
The Administration provided after the meeting supplementary information on the profile and some important data of the concerned toll tunnels and bridges. [Follow-up Paper] To address members' concerns raised at the meeting and in response to Hon Henry WU's enquiry [Letter from Hon Henry WU], the Administration provided further information about the securitization exercise. [Follow-up Paper] The Administration also provided information on the overall terms and conditions of the proposed securitization exercise with the prospectus of the exercise to the Panel on 19 April 2004 [Follow-up Paper]
The Panel noted correspondences between the Legal Service Division (LSD) of the LegCo Secretariat and the Administration from 30 December 2003 to 6 January 2004 for clarifications on the proposed resolution. [Letter from LSD dated 30.12.03 and Administration's response], [Letter from LSD dated 2.1.04 and Administration's response]
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| | 16.1.04
| SUBC
| At the House Committee meeting on 9 January 2004, Members agreed that a Subcommittee should be formed to study the proposed resolution in detail. The Subcommittee met on 16 January 2004. After considering the further information provided by the Administration, the Subcommittee supported the proposed resolution. [Report of the Subcommittee] The proposed resolution was passed at the Council meeting on 18 February 2004. [Hansard "Page 184"]
In response to members' request at the Subcommittee meeting held on 16 January 2004, the Administration provided in July 2004 an information paper on the Summary Outcome of the Securitization of Future Revenue from Government Tolled Tunnels and Bridges for circulation to the Financial Affairs Panel. [Follow-up Paper]
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4.04 - 5.04
| PRESS
| The Government issued $6 billion securitization bonds of net toll revenue from government-owned tolled tunnels and bridges [Press release]
[Press release]
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| | 12.5.04
| CQ
| Hon Ambrose LAU raised a question on Experience learnt from the securitization of future revenue from Government toll roads. [Hansard"page 14"]
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Related topic in the Database on Particular Policy Issues
| Issuance of Government bonds
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