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1. MTR Welcomes the Decision to Proceed with the Planning of SIL and WIL Phase 1

2. Appointment of expert members to committees

3. SHKP plans Millennium City hotel

4. New World claims ownership of PSPS projects

1. MTR Welcomes the Decision to Proceed with the Planning of SIL and WIL Phase 1
MTR Press Release, 21 January 2003

The Corporation welcomes the decision from the chief Executive in council today (Tuesday, 21 January 2003) to proceed with the planning of the South Island Line together with further planning of the west Island Line Phase 1.

The Corporation will pursue the most cost effective selection of railway technology, route alignment and station locations whilst providing a sustainable transport solution for both the western and southern districts of Hong Kong Island.

The Corporation looks forward to further discuss with the Environment, Transport and Works Bureau and the Railway Development Office on the planning of this new infrastructure project.

2. Appointment of expert members to committees
KCRC Press Release, 23 January 2003

The Kowloon-Canton Railway Corporation (KCRC) today (Thursday) announced the appointment of seven expert members to the committees of the Managing Board.

The appointments have been made in line with the recommendations in the Ernst and Young investigation report to strengthen the Managing Board's role in monitoring the work of KCRC.

To strengthen the monitoring of projects, the following three expert members have been appointed to the Capital Projects Committee:

- ƒ{ Dr Greg Wong Chak-yan, a consulting civil engineer;
- ƒ{ Ir Teresa Cheng Yeuk-wah, a Senior Counsel; and
- ƒ{ Ir Daniel M. Cheng, an environmental industrialist.

For the Strategic Human Resource Committee, the following two expert members have been appointed to advise the Board in considering pay and conditions, and other major staff issues:

- ƒ{ Mrs Paula Ko Wong Chau-mui, a senior human resource executive of a major bank; and
- ƒ{ Mrs Anita To Yu Ming-chi, a general manager of a multinational company.

The remaining two expert members are Mr Philip Nunn, a lawyer with special expertise in construction and arbitration, and Mr Alfred Li Hung-kwan, a retired Chartered Accountant and former executive director. Mr Nunn has been appointed to the Property Committee, and Mr Li to the Finance Committee.

A KCRC spokesman said, "The expert members have been appointed initially for one year with effect from 1 February 2003. A review will be conducted at the end of this year on the arrangement and any extension of their appointment."

"The expert members will have the same speaking and voting rights as other members on the Committees under the chairmanship of a Board member.

"The committees are responsible for considering issues in detail and for making appropriate recommendations to the Managing Board for decision."

"In matters where a potential conflict of interest may arise, expert members would be expected to make a declaration of interest, or to withdraw from the discussion of the items concerned if the Committee so decides," the spokesman added.

The biodata of the seven expert members are as follows:

Capital Projects Committee

Dr Greg Wong Chak-yan
Dr Wong is a consulting civil engineer and the principal of Greg Wong & Associates Ltd., a HK-based civil, structural and geotechnical consulting engineering firm with specialized engineering skills in deep excavations, large scale site formations and foundations in difficult ground conditions. Dr Wong has worked in Canada, Korea, Brazil and Uruguay on capital projects in addition to 25 years of local experience which include the MTRC.

Dr Wong is currently a member of the Town Planning Board, the Metro Planning Committee, Engineers Registration Board, Liquor Licensing Board, part-time member of the Central Policy Unit of the HKSAR Government, and Vice-President of the HK Institution of Engineers.

Ir Teresa Cheng Yeuk-wah, SC
Ir Teresa Cheng is a Senior Counsel. She is also a Chartered Engineer, a Chartered Arbitrator and an Accredited Mediator. Ir Cheng has been involved in many mediation, arbitration and litigation cases in Hong Kong and abroad including disputes on building contracts, large infrastructure projects and joint venture agreements.

Ir Cheng is a member of the Housing Authority and its Building Committee. She serves as the Chairman of the Appeal Board Panel (Environmental Impact Assessment), Appeal Tribunal (Buildings), and Copyright Tribunal. She is the Deputy Chairman of the HK International Arbitration Centre and a past Chairman of the Chartered Institute of Arbitrators (East Asia Branch).

Ir Daniel M. Cheng (FHKIE-Env. Div.)
Ir Cheng is the Managing Director of Dunwell Enviro-Tech (Holdings) Ltd. with areas of business ranging from collection and re-refinery of spent oil to design and installation of waste water management systems. He is the winner of The Young Industrialist Awards in 1995, the Innovative Entrepreneur in 1996 and the HK Ten Outstanding Industrial Engineers Award in 1999.

Ir Cheng is a member of the Environmental Campaign Committee, Director of Applied Research Council, member of the Nanotechnology Projects Vetting Committee for HKSAR, Chairman of the Board at the Friends of the Earth, Founding President of HK Environmental Industry Association, and general committee member of the Federation of HK Industries.

Strategic Human Resource Committee

Mrs Paula Ko Wong Chau-mui
Mrs Ko is the Head of Human Resources - Change Management (Group Technology and Operations) of Standard Chartered Bank. She was a part time member of the Central Policy Unit from 1999 to 2001.

Mrs Anita To Yu Ming-chi
Mrs To is currently the General Manager and Director of Gillette Hong Kong Ltd., a subsidiary of the US based manufacturer of Gillette Shaving, Oral-B, Braun and Duracell Batteries.

Previously, Mrs To held management positions in Johnson and Johnson and Nestle China Ltd. She is also a member of the HKANA ECR Hong Kong.

Property Committee

Mr Philip Nunn, JP
Mr Nunn was admitted as a solicitor in England in 1974 and in Hong Kong in 1981. He joined Simmons and Simmons as a partner in 1986 to head the development and construction practice. Before that he worked for the HK Government as a Deputy Principal Crown Counsel in the Attorney General's Chambers.

Mr Nunn is a member of the Hong Kong Housing Authority, being the chairman of its Building Committee and a member of its Strategic Planning Committee. He is Co-chairman of the Appeal Tribunal (Buildings), and a member of the Construction Arbitrators' Panel of the Hong Kong International Arbitration Centre. He is also a member of the China International Economic and Trade Arbitration Commission Panel of Arbitrators and the Korean Commercial Arbitration Board Panel of Arbitrators.

Finance Committee

Mr Alfred Li Hung-kwan
Mr Li is a retired Chartered Accountant. In his former position as the Executive Director of Hang Lung Development Company Ltd., Mr Li was responsible for the Hang Lung Group's finance and administration as well as its new investment arm in charge of non-real estate investment.

Mr Li is a member of the Listing Committee of The HK Stock Exchange, the Takeovers and Mergers Panel of the Securities and Futures Commission, a fellow member of the HK Society of Accountants and a member of the Scottish Institute of Chartered Accountants.

3. SHKP plans Millennium City hotel
Staff reporter, The Standard 24 January 2003

Sun Hung Kai Property Development plans to turn its Kwun Tong Millennium City Phase Six into a 400-room four-star hotel, to capitalise on the surge of mainland arrivals.

The market estimates the 360,000 square foot project will cost HK$720 million, or HK$2,000 per square foot. Project completion is planned for 2005-2006.

Sun Hung Kai also plans to develop the fifth phase of Millennium City into a shopping centre for tourists.

Winsor Properties and Chinachem Group have both unveiled plans to open hotels in Kwun Tong.

Hotels are seen as a growth area for developers, as tourist numbers rise and rentals for commercial office space continue to fall.

A recent industry report found that falling rents for Class-A office space had bumped Hong Kong from the sixth most expensive office location in the world in 2001, out of the top 10 list last year.

The bi-annual report, released by real estate services company CB Richard Ellis, surveyed prime rental rates of commercial space from 50 markets including the Asia Pacific, Europe, Middle East and Africa, United States and Canada.

Findings indicated that falling rents everywhere meant that there had been little impact on the top most expensive office locations in the world. London, Tokyo and cities in France remained the world's five most expensive office locations.

Shanghai's Pudong district, which has seen rents soar on the back of the booming mainland economy, was 79th in last year's list, up from the 157th place in 2001.

But Hong Kong, midtown Manhattan and Frankfurt lost their positions in the top 10 list to Birmingham, Dublin and Manchester.

The rental rate for Class-A office space in Hong Kong last year was about HK$33.8 psf, similar to the level in Seoul, the report said.

It attributed the SAR drop to the shift in exchange rates.

As the US dollar fell significantly against the euro and yen last year, the Hong Kong dollar, which is pegged to the US currency, also experienced a dramatic drop.

A US dollar bought 1.12 euros (HK$9.35) at the end of December 2001, but just 96 euro cents by the end of 2002.

Such shifts in exchange rates had made Tokyo and cities in Europe look significantly more expensive relative to the rest of the world.

Midland Realty said it expected prices for industrial premises also to fall 15 per cent while rents would drop 10 per cent. Midland said the drop would be fuelled by companies relocating back-office operations across the border, a trend that is expected to continue

4. New World claims ownership of PSPS projects
SOPHIA WONG, SCMP 23 January 2003

New World Development has claimed ownership rights on two newly completed housing projects built under the now-defunct Private Sector Participation Scheme (PSPS), while other developers are urging the government to sell the flats through tender or auction them in fair competition.

Some developers were also concerned that the conversion of the two PSPS projects would add to the excess supply of private flats and put further pressure on already strained prices.

New World sales and marketing senior manager Barbara Ho said yesterday that the Housing Authority had agreed that the company had ownership rights on the 4,480 flats, in Hunghom Peninsula and in another PSPS development in Ngai Chi Wan.

The units were built by New World subsidiary Hip Hing Construction as part of the PSPS scheme, which encouraged private participation in the government subsidised Home Ownership Scheme (HOS). The future of the two projects was thrown into doubt in November when the government scrapped subsidised housing sales.

Michael Suen Ming-yeung, the Secretary for Housing, Planning and Lands, reportedly said all HOS flats would not be released for sale except the two finished PSPS developments.

But he also said the government had to negotiate with New World and make clear whether it was interested in buying the flats by paying extra land premiums to convert the flats into private homes. He is optimistic the two parties could reach a compromise about the land premium.

Mrs Ho confirmed the company was interested in buying the flats from the government and said they were in initial talks about the land premium.

She said that even if the two parties reached a compromise, New World would have to spend nearly a year upgrading the quality and design of the developments to suit private market demand. She expected the market value for Hunghom Peninsula would be below HK$4,000 per square foot.

Developers including Cheung Kong (Holdings) had shown interest in acquiring the flats from the government. Cheung Kong had a strong presence in Hunghom and had urged the government to release the projects for sale through tender or auction to enable fair competition among developers.

Sun Hung Kai Properties vice-chairman Thomas Kwok Ping-kwong also expressed interest in buying the PSPS units if they were available for sale.

The PSPS was aimed at employing private-sector expertise and resources to help build subsidised housing.

Under PSPS agreements, land was granted at a discounted value to developers or contractors. The Housing Authority would then guarantee to repurchase all residential units after completion and sell them as subsidised housing at a discounted value.

In the two PSPS developments New World's Hip Hing outbid other contractors and developers through public tenders to obtain the development rights. It won Hunghom in September 1999 with a discounted premium of HK$583 million and the Ngai Chi Wan project three months later for HK$238.8 million.

Mrs Ho said New World was releasing eight remaining flats at Monte Carlton in Shamshuipo for sale at an average of HK$2,948 per square foot for cash buyers.

Buyers would get free stamp duty and a free parking space if they bought a unit, which was equivalent to a 5 per cent price discount, she said. Monte Carlton was marketed early last year and 20 units remain unsold.