For discussion FCR(96-97)93
on 17 January 1997


New Subhead "Loans to non-profit-making international schools"
Capital assistance loan to the Canadian International School

Members are invited to approve -

  1. the creation of a new subhead entitled "Loans to non-profit-making international schools" under Head 252 Loans to Schools/Teachers of the Loan Fund;
  2. a commitment of $66,591,000 under the new subhead; and
  3. an allocation of $66,591,000 from the Loan Fund to enable the Government to offer a loan to the Canadian International School to meet part of the construction cost of its new school building at Nam Long Shan Road, Hong Kong.


The Canadian International School (CANIS) needs a new school building to meet the increasing demand for school places of Canadian curriculum.


2. The Director of Education (D of E) proposes to grant the CANIS an interest-free loan of $66,591,000 to meet part of the construction cost of its new school building at Nam Long Shan Road, Hong Kong.


3. The Canadian International School Foundation Limited established the CANIS as a non-profit-making international school in Hong Kong in 1991. The school currently operates reception, preparatory, primary and secondary classes from Reception to Grade 12 in three different borrowed premises on Hong Kong Island. At present, it has an enrolment of 540 from Preparatory to Grade 10. It plans to increase the enrolment to 1 125 from Preparatory (equivalent to Primary 1 in Hong Kong) to Grade 12 (equivalent to Secondary 7 in Hong Kong) in 2002 to meet the projected demand for international school places of Canadian curriculum.

4. In November 1995, the CANIS identified a site of 1.03 hectares at Nam Long Shan Road for building a new school to meet the increasing demand. We have given approval in principle of a Private Treaty Grant to the Canadian International School Foundation Limited to build a non-profit-making primary and secondary school of not less than 48 teaching rooms. We are now proceeding with the land grant formalities. In the meantime, the CANIS has applied for an interest-free loan to meet part of the cost of the new school project, estimated at $270 million in full. According to the building plan submitted by CANIS, the new school building will have 53 teaching rooms for 22 operating classes in the primary section and 23 operating classes in the secondary section. The new school building will accommodate up to 1 125 students from Preparatory to Grade 12.

5. As a non-profit-making international school, the CANIS is eligible for capital assistance in the form of an interest-free loan of up to 100% of the building cost of a standard design aided primary or secondary school. Since CANIS operates both primary and secondary sections, D of E recommends that we should calculate the interest-free loan for the school on a pro rata basis having regard to the number and size of projected operating classes in the primary and secondary sections of the school and the equivalent provision for standard design aided primary and secondary schools.


6. The Director of Architectural Services estimates that the average costs of building a standard aided primary school with 30 operating classes is $53,088,000 and that for a standard aided secondary school for the same number of operating classes is $58,978,000 based on a fixed price lump sum contract at the price level in the fourth quarter of 1996. CANIS plans to operate 22 primary classes and 23 secondary classes each with 25 students in the new school building. Using a standard class size of 30 students per class for Primary 1 to Primary 6 in aided primary schools adopting the activity approach, 35 students per class for Secondary 1 to Secondary 5 and 30 students per class for Secondary 6 to 7 in aided secondary schools, the number of operating classes in CANIS for Preparatory to Grade 5 and for Grades 6 to 12 is equivalent to 18.3 primary and 17.4 secondary classes in the standard design aided schools respectively. The maximum loan to be made available to the CANIS should therefore be $66,591,000, calculated as follows -

for primary section: $53,088,000 x 18.3/30 operating classes
(Preparatory to Grade 5)



for secondary section: $58,978,000 x 17.4/30 operating classes
(Grade 6 to Grade 12)









7. If Members approve the proposal, we will offer the CANIS a loan of $66,591,000 under the new subhead.


8. In line with existing policy, the loan to the CANIS will be at nil interest. The school will draw down the loan on completion of the new school building scheduled for mid-1998. It will repay the loan over a period of ten years. The first instalment of the loan repayment will become due one year after the school draws down the loan. We will make repayment of the loan a first call upon the liquidated assets of the school in the event it closes down, and in case of default of repayment of the loan, D of E may take possession of the premises and assets of the school. We will specify these terms and conditions in the loan agreement and secure the loan by a legal charge.


9. We recognise the importance of international schools to the continued development of the Hong Kong economy. International schools cater mainly for the needs of the children in the expatriate community. In the past few years, international schools have also provided education for children of emigrants who have returned to Hong Kong. To ensure an adequate supply of international school places to meet demand, Government policy is to offer support to non-profit-making international schools. The support includes the grant of land by private treaty to those schools which meet our assessment criteria and which help to meet an identified demand of school places.

10. On 10 October 1995, following recommendations of a Working Group on the Provision of International School Places, the Governor-in-Council approved, among other things, that we should provide a new interest-free loan of up to 100% of the cost of building a standard design primary or secondary public sector school as appropriate to non-profit-making international schools not in the English Schools Foundation towards the cost of building a new international school or extension. We have set out details of the revised scheme for international schools in the Legislative Council Brief (Ref. EMBCR 15/581/94 III) issued to Members on 11 October 1995.

Education and Manpower Branch
January 1997

Last Updated on 5 August 1999