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1. Mega projects panel call

2. Hung Hom subsidised flats may be demolished

1. Mega projects panel call
Dennis Chong, The Standard 7 February 2004

On the eve of the judicial review of the Central reclamation, harbour protectionists have urged the government to allow for public consultations ahead of future ``mega projects''.

The battle over the reclamation, which the government has said is necessary for the construction of the Central-Wan Chai bypass to solve traffic jams, has now raged for more than a year.

Earlier last month, the Court of Final Appeal ruled that the Wan Chai north reclamation, part of the bypass project, was the subject of a government error in interpreting the Protection of the Harbour Ordinance.

The government was required to review that part of the project, along with the Central Phase Three and southeast Kowloon areas, to meet the ``overriding public need test'' proposed by justices of the SAR's highest court. However, the government maintained after the judgment that the planned reclamation and the bypass will go ahead as planned.

However, the Citizen Envisioning@Harbour group, which held a public hearing on December 7 attended by 100 professionals and residents - including representatives from five government departments and former chairman of the Society for Protection of the Harbour Winston Chu - yesterday released its findings.

The nine-page independent report was compiled from 40 suggestions the group had received during the public hearing.

Citing points from the report, Albert Lai, chairman of the Conservancy Association and a member of the group, said the public has reservations about the government's argument that reclamation is the only way to ease traffic problems in Central.

He also said that although the government has promised the reclamation projects now in gear are the last ones the public are not convinced.

Lai said the public generally supports the idea to renovate the harbour front to make it more appealing, but there is some doubt as to how the aspirations can be fulfilled through reclamation projects.

In a press release responding to the report, the Housing, Planning and Lands Bureau said that, apart from phase three of the Central reclamation project and the proposals for Wan Chai north and southeast Kowloon currently under review, there are no further reclamation plans for Victoria Harbour.

A spokesman for the bureau also said the government shares the view on the need to return the harbour to the people, and that the government will do ``whatever it can to protect and preserve it for the enjoyment of future generations''.

The independent report also suggested ways in which the government win back public trust.

While the government should pledge to listen and also consider views from the public on urban projects as big as the reclamation, any future reclamation should also be conducted not to fulfil practical needs, but to increase the quality of life of all residents.

A discussion panel should be set up to balance the needs of the government, business and the general population.

``The public should have an equal portion of power on the panel,'' Lai said.

The report also urged the government to set up a department with an accountable officer responsible for all future reclamation plans.

Lee Chack-fan, a professor of the department of civil engineering of the Hong Kong University, said information made available to the public is generally more detailed in foreign countries.

Lee, who lived in Canada for 25 years during which time he helped build nuclear plants in Ontario, said many local governments abroad would roll out several options with detailed feasibility reports on which the public can voice their opinions.

``In mega projects like this, the government should explain both the pros and cons of it to the public.

``Not only does it have to explain it to professionals, a simplified version of the plan should also be made available to the public,'' he said.

Lai said the claim made by the government that no group has offered a better suggestion to solve the traffic problem in Central is not the whole truth.

``No group has suggested a detailed plan to solve traffic jams in Central because the government has not given [them] enough resources [to do so].

``It is not that the public does not want to do it,'' Lai said.

2. Hung Hom subsidised flats may be demolished
Raymond Wang and Eli Lau, The Standard 7 February 2004

A controversial subsidised housing scheme in Hung Hom that has backfired massively on the government now appears almost certain to either be converted to luxury apartments or demolished.

New World Development (NWD) has announced that it intends to join forces with Sun Hung Kai Properties (SHKP) to either convert the low-income Hung Hom Peninsula development into a luxury project involving investment of HK$2.4 billion or tear it down and redevelop the site.

The decision spells the end for a 1997 attempt by the government to build harbour-view flats for middle-class buyers against the advice of developers and market analysts. It remains one of the most serious blunders of Chief Executive Tung Chee-hwa's government.

After the market began a relentless drift downward in 1998, nearby homeowners, many of them having seen their equity vanish, began to worry that the low-cost housing would play havoc with their own home values. Flats in nearby Whampoa Garden fell in price from as much as HK$7,000 per square feet to around HK$3,000 as the market fizzled - while the Home Ownership Scheme (HOS) was planning to sell subsidised flats at just HK$2,100 per square foot.

Consequently, the 2,470-unit project, which was completed in 2002, was never opened.

Now analysts believe the flats from the project could bring as much as HK$4,000 psf.

NWD director and general manager Stewart Leung said two options - redevelopment and refurbishment - are being considered.

``Building costs, investment risk and construction period for a redevelopment plan will be definitely more than a refurbishment one,'' Leung said.

If the developers proceed to redevelop the project, it would cost about HK$2.4 billion or more than HK$1,500 psf, about HK$1,000 psf more than construction costs exceeding HK$500 psf for a refurbishment.

He said it will take about three years to complete the redevelopment project, while refurbishment will take about 10 months.

Chung Sen Surveyors director Cheng Wing-ming said refurbishment is more likely as redevelopment would double the costs and increase the risk. The project costs include previous accumulated interest and construction for the project, with a gross floor area of 1.6 million sqft.

Centaline Surveyors managing director Victor Lai said: ``Unless developers are very bullish about the outlook of the real estate market over the next few years, I don't believe the redevelopment plan will go ahead.''

NWD's 27.5 per cent-owned construction affiliate Wai Kee Holdings this week sold 50 per cent of the Hung Hom Bay project to SHKP for HK$593.2 million.

The remaining 50 per cent is being held by NWD's 54 per cent-owned infrastructure subsidiary NWS Holdings. NWD had tendered for the Hung Hom site for HK$583 million five years ago.

Developers may add facilities such as a clubhouse and a swimming pool, and repackage and rename it before offering the apartments to the public.

Sale of the project is still pending negotiations with the government on the land premium the developers need to pay to reimburse the subsidies offered by the government.

NWD's Leung, however, said the developers are unlikely to launch the project in the near term, although land premium discussions will be settled soon.

Moody's Investors Service affirmed the "A2"' debt rating and retained the positive outlook for SHKP yesterday, shortly after the developer's acquisition of the development. The rating agency forecasts that litigation initiated by NWD against the government over the project will be resolved shortly.