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1. Secret land use information will be made public: Tsang

2. Tsang in Cyberport U-turn

3. We will be more open, says Donald Tsang

4. Reclaimed Wan Chai land could be sold, says official

5. Dreamcity land premium to cost MTR $1.15b

1. Secret land use information will be made public: Tsang
Teddy Ng, Carrie Chan and Raymond Wang, The Standard 28 January 2005

Secret information on developer applications for changes in land use will now be released to the public, Chief Secretary for Administration Donald Tsang said.

Tsang said the release of information on land premiums and other arrangements will improve the transparency of planning and lands policies, and help dispel fears the government is giving preferential treatment to tycoons.

The move comes as the government comes under heavier fire over allegations that Hong Kong's largest developers regularly collude with government to receive favorable treatment.

In this year's policy address Chief Executive Tung Chee-hwa surprised listeners by referring to the topic, saying: ``We are resolutely against collusion between business and the government and will strictly enforce our monitoring systems to eliminate any transfer of benefits.''

Tsang said the government plans to regularly release information summaries on cases where developers are modifying existing land leases on the Lands Department Web site.

However, some specific details of individual deals may still be witheld. Property industry figures reacted favorably to the news.

``If this information is revealed publicly, then this would raise transparency in the market,'' Midland Realty chief analyst for strategic development and research Buggle Lau said.

Developers, he said, could use public figures on premiums paid for land use changes as a reference.

Tsang said the department would also seek the support of relevant policy bureaus and consult different government departments when processing private treaty grants.

This would ensure land use and planning would be in line with the demands of different government departments and that public opinion would be considered during the process.

``We also plan to disclose the approved private treaty grants and related land premium information in order to make the entire process more transparent,'' he said.

Centaline Surveyors associate director Chris Chau said the new plan would let the public know more about potential home supply.

``Land premium settlements for approved private treaty grants involving mammoth property projects can be expected to become a market reference,'' Chau said. ``Developers can realize more about the direction of future property developments if land conversion cases are unveiled regularly.''

Real East and Construction sector lawmaker Abraham Razack downplayed the significance of the move, saying listed property developers eventually disclose the information anyway. ``This is simply an updating of details of the Land Application List system,'' Razack said.

``This initiative will not do much to defuse allegations of collusion between government and big business.''

2. Tsang in Cyberport U-turn
Teddy Ng, The Standard 28 January 2005

Secretary for Commerce, Industry and Technology John Tsang has backed down from his implied claim that legislators had examined and rejected a suggestion that the Cyberport and residential projects be separated before being put out to tender.

But speaking on Thursday during a motion of thanks for the Chief Executive's policy speech Tsang insisted the government had not bypassed Legco when it awarded the project to telecom giant PCCW in 1999 without a formal tendering process.

On Wednesday, Tsang had tried to play down suggestions that the Cyberport project was just another example of the government's collusion with big business. In a lengthy commentary published by several news-papers, he had attempted to show step by step how the project came into being and handed over to PCCW.

Tsang also said in the article that a suggestion by the real-estate sector that the Cyberport and residential com-plexes within the project be separated had been considered and rejected by a Legco panel. The suggestion infuriated panel chairman Sin Chung-kai who accused Tsang of putting words in the mouths of councillors and demanded an apology.

On Thursday, Tsang said a government document presented to lawmakers on April 29, 1999 listed clearly the details of the financial analysis and infrastructure required of both the proposal by PCCW and the real-estate sector.

He admitted that lawmakers at that time had not widely discussed the proposal by the real-estate sector.

``There were only a few discussions on the real-estate sector proposal. But lawmakers were well aware of the proposal, and the analysis and opinion of the government on it. It was up to the lawmakers to decide what topic to discuss,'' Tsang said.

He stressed that the Legco Public Works Committee and Finance Committee had approved the infrastructure and funding for the project in May, 1999. ``Without the approval of the Finance Committee, we could not have gone ahead with the Cyberport project,'' he said.

Also speaking Thursday, Chief Secretary for Administration Donald Tsang reiterated there was no collusion between the government and big business.

Tsang, who was Financial Secretary in 1999, urged lawmakers to recall the state of the economy at that time, which had been hit by the Asian financial crisis which prompted the government to come up with urgent measures to boost the economy and create jobs.

Tsang reminded lawmakers that in his 1999 budget speech, he had proposed setting up both the Cyberport and Disneyland. He said Hong Kong's competitors were at the time striving to develop information technology and that the SAR wanted Cyberport built in the shortest possible time.

``We had to rely on the professional expertise of private organizations to achieve that aim. Therefore, we decided to award the Cyberport project under a joint public-private cooperation arrangement, and this was supported by the Legco finance committee,'' he said.

Tsang said the government never hid the fact that both the Cyberport and Disneyland projects came under a public-private cooperation arrangement. He said a level playing field had to be provided for business and that he was convinced that no one could perceive these arrangements to be either ``collusion between government and business'' or a ``transfer of benefit.''

Lawmakers, however, were not convinced by the explanations.

Sin Chung-kai said legislators had no problem with the public-private partnership arrangement, but that the government should explain why it did not decide to call for a formal tender.

The Frontier's Emily Lau said the gap between the rich and the poor was caused by this sort of collusion.

She said the government gave most of the territory's resources to big business, most of whom had already earned huge profits and who ``are already too fat to fit in a sock.''

3. We will be more open, says Donald Tsang
KLAUDIA LEE and RAVINA SHAMDASANI, SCMP 28 January 2005

Chief Secretary Donald Tsang Yam-kuen yesterday acknowledged for the first time public concerns that the government may be favouring "some particular enterprises", and promised it would be more transparent in its decision-making to ease those worries.

His comments came as he mounted the strongest defence yet against accusations of government-business collusion and as controversy about the Cyberport project showed no signs of abating.

Mr Tsang did not name any enterprises but his words followed accusations that the granting of Cyberport to the Pacific Century Group, controlled by Richard Li Tzar-kai, was favouritism and a transfer of interests from government to business.

Speaking in Legco on the second day of the policy address debate, Mr Tsang and Secretary for Commerce, Industry and Technology John Tsang Chun-wah rejected the accusations and stressed the project had gained Legco approval.

The chief secretary said: "Hong Kong's private sector has created most of the employment opportunities in the city. That's why the government has to create and maintain a business-friendly environment and a level playing field.

"I believe nobody would think this measure is tantamount to `government-business collusion' and `transfer of benefits'."

Mr Tsang said corrupt government-business collusion was impossible, given the vigilance of the Independent Commission Against Corruption, the Ombudsman, Audit Commission, Legco and the media. But he acknowledged there were public concerns about possible non-corrupt acts of collusion.

"First, whether the government's decision-making process, especially relating to land grants, is unfair and inclined to being biased towards some particular enterprises," he said. "Second, whether officials ... are biased towards some enterprises and are more lax towards them in exchange for their entering into the business sector after retirement."

The only way for the government to convince the public it had acted impartially was to enhance transparency in the decision-making process, Mr Tsang said.

He said the Lands Department in future would publish on its website details of land leases being handled, as well as those that had been completed. It would also publicise signed private treaties and their required land premium. And once reforms to the Town Planning Board came into effect this year, the discussion, summary and decisions on applications would be posted on the board's website.

Announcement of the measures came amid fierce controversy over an article by John Tsang published in several newspapers on Wednesday in defence of Cyberport. In it, Mr Tsang denied that awarding the project without tender to Mr Li's company showed collusion between government and business and said Legco had approved it.

Yesterday, Donald Tsang - who was financial secretary when Cyberport was announced in 1999 - said the project was supported by the Legco Finance Committee.

"We've never concealed that Cyberport and Disneyland will adopt a public-private-partnership mode of operation, but not through open tender," he said.

John Tsang admitted Legco had had only "a little bit" of discussion on the proposal to separate the property and technological parts of the project, and had not voted on it.

But he insisted legislators were notified of the suggestion and the government's opinions.

4. Reclaimed Wan Chai land could be sold, says official
CHLOE LAI, SCMP 28 January 2005

Land reclaimed off Wan Chai for a proposed highway could be sold, an official said yesterday.

"What if we were to have restaurants on the reclaimed land? You wouldn't trust the government to build and run restaurants, right?" the official said.

The lands official's comments came amid a row over the way the government's proposals to reclaim up to 25 hectares of land were made public on Sunday.

The head of the Harbourfront Enhancement Committee's taskforce on the Wan Chai reclamation released the plans in the committee's name without consulting fellow members. Critics claimed the government had given the plans directly to the taskforce's head, Leung Kong-yui, to bypass other members and make it seem as if the plans were a recommendation of the committee.

Revenue from land sales would not cover the cost of the reclamation and road works, the lands official said. "The project was intended to serve the public, not make a profit," he said.

He stressed the government acted in good faith when it inserted the proposals for reclamation into the report released by Mr Leung.

The government insists the city urgently needs a Central-Wan Chai bypass to ease cross-island traffic.

The committee's report came as it asked the public for views on the future of the Wan Chai waterfront.

Christine Loh Kung-wai, chairwoman of the Society for Protection of the Harbour, said the land-sale plan was just an excuse for commercial development.

"If it is just about having restaurant space, leasing [the land] would be enough to do the job," she said.

Paul Zimmerman, convenor of the Designing Hong Kong Harbour District group, said bars and restaurants along the promenade would make the area livelier. He said he accepted auctioning land for such purposes.

The lands official expressed confidence reclamation in Wan Chai would meet the legal prerequisite of an "overriding public need", established in a ruling by the Court of Final Appeal.

"We already have a community consensus on building roads to ease traffic. What the Court of Final Appeal was against was having a park [on the site]. It agreed with having roads," he said.

5. Dreamcity land premium to cost MTR $1.15b
DENISE TSANG, SCMP 28 January 2005

The government will levy a land premium of $2.31 billion on Dreamcity, the MTR Corp's property development in Tseung Kwan O's Area 86.

The rail firm has promised to pay 50 per cent of the premium to entice the participation of property developers, which would normally be liable for the whole amount.

An MTR spokesman said yesterday that the corporation's $1.15 billion share of the premium would be funded by internal resources.

Compelled by tightened disclosure rules on listed companies, this was the first time MTR had revealed the land premium levy on one of its projects.

The spokesman described the premium, which translated into $1,546 per square foot, as reasonable.

The Lands Department bases land premiums on prevailing selling prices of residential properties in the relevant district.

"The land premium plus other costs will bring average costs to about $2,000 per square foot, compared with an average selling price of $3,000 per square foot," SK Pang Surveyors managing director Pang Shiu-kee said.

Located at the future Tseung Kwan O South station, Dreamcity involves the construction of 2,096 flats on five towers over a floor area of 1.5 million square feet.

The project, awarded to Cheung Kong (Holdings) last week, is expected to cost $5 billion.

Mr Pang said Cheung Kong would bear lower costs, given MTR's offer to share the premium. However, the agreement calls for the corporation to take a bigger profit share on apartment sales.

MTR property director Thomas Ho Hang-kwong said last week that the rail company had expected at least 60 per cent of profits from sale of the completed buildings.

Completion of the project is slated for 2008.

Some analysts said MTR's decision to share the land premium on Dreamcity would raise its risk profile but the corporation could mitigate the risk through pre-sales of apartments.

MTR's move underscored the rail operator's confidence in the prospects for the property market in Tseung Kwan O, despite the relatively rich supply of housing in the district.