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7.6.25 The heavy rail alternatives showed a better economic performance than Sight rail.7.6.26 A lifetime economic and financial evaluation were undertaken for the heavy railalternatives for both the Tuen Mun and Yuen Long rail links, computing thefollowing internal rates of return (IRR):Yuen Long LineTuen Mun LineCent High Cent HighEconomic IRR Popul. Popui. Popul. Popul.Full time benefits High High High High1/3rd time benefits High High High HighFinancial IRR Medium Medium Low Medium7.6.27 These analyses assume construction starting in 1992 with the line open in 1996.Growth rates in financial and economic returns after 2001 were assumed at a veryconservative 2% per year. The results generally confirm the results of the single yeareconomic and financial analyses.Other Considerations7.6.28 Consideration is at a very preliminary stage for a new freight rail line from the borderwith the PRC to the new port sites in the Western Harbour. Such a freight line coulduse a similar alignment to the Tsuen Wan-Yuen Long link. It has not been decidedyet whether or where a freight line should be built but opportunities for combiningthe passenger and freight line should be explored.Conclusions7.6.29 A rail link to the NW New Territories appears to be an attractive project and couldattract substantial patronage. It would provide more efficient services than bus butits economic viability will be affected by direct bus competition.7.6.30 The rail line should start from Tsuen Wan with a terminus at either Yuen Long orTuen Mun. On current knowledge, Yuen Long appears to be the most suitableterminus for the following reasons:(1) It is likely to be cheaper, being both shorter and passing through easier terrain orin tunnel(2) Yuen Long can serve more naturally as a railhead for the entire North West NewTerritories; after Route 3 is built the Tuen Mun alternative would involve asubstantial detour for residents of the Yuen Long/Tin Shui Was area(3) The rail line to Yuen Long can be built before Route 3 is open, allowing the railline to establish itself ahead of competing bus services(4) The route to Yuen Long can be linked to the development of the new town ofTin Shui Wai, to the benefit of the development of both the rail line and thenew town7.6.31 With a fare structure fully integrated with the urban area rail fares, passenger demandon opening in the mid-1990s would be likely to exceed the capacity of a light railline. However, for the Yuen Long to Tsuen Wan alternative, passenger demandcould probably be kept within the limits of light rail by using a non-integrated farestructure. This would require rail passengers to pay at least two separate fares totravel to the urban area, one for the urban link and the other for the onward journeyby MTR.7.6.32 The analysis by CTS-2 assumed that a heavy rail link would be an extension of theMTR system. This need not necessarily be the case. For example, if the Tsuen Wan toYuen Long route is finally selected and plans are coordinated with the proposed newfreight line, then it might be more sensible for the freight line operator to operate the135