A new ferry service between Tuen Mun and Macau will be ready by the end of 2004 at the earliest, following the signing of a tenancy agreement between the Government and HK North West Express Ltd.

The company will modify and use part of the Tuen Mun Ferry Pier. Operations will start late next year assuming all preparatory works can be completed smoothly.

The company plans to use all three berths of the terminal to provide daily ferry services to Macau initially, at a frequency of one sailing every 30 minutes from 11am to 2am.

Ferry services to Mainland ports in the Pearl River Delta will be considered six months after the ferry terminal has begun operation.

Under the tenancy agreement, the company will:

* carry out the necessary pier modification works, including the construction of an additional floor;

* pay for the non-recurrent items such as systems, equipment and furniture required for the operations of Government departments;

* pay an annual amount of $16.3 million to the Government;

* pay the electricity and water charges incurred by the Government departments providing services at the new cross-boundary ferry terminal; and,

* be responsible for the maintenance and general management of the new cross-boundary ferry terminal.

Subject to the availability of space and the Government's prior approval, company can sub-let terminal premises designated by the Government, berthing slots, advertising and shopping space and baggage handling services and keep the fees received.

Revenue from duty-free shops, if any, will be shared between the company and the Government.