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1. Kowloon Bay land auction nets $1.8b

2. Cartoon

3. Bypass only answer: Suen

4. Signature system makes mark

5. Viaduct would need reclamation of harbour

6. Iconic US author commits suicide

7. Iconic

1. Kowloon Bay land auction nets $1.8b
Raymond Wang, Danny Chung and Carrie Chan, The Standard 23 February 2005

The success of the first government auction of commercial land in more than three years shows that developers remain keen for office and retail opportunities outside Hong Kong's core business districts.

Sino Land won the 50,752 square foot Kowloon Bay site with a bid of HK$1.82 billion, far more than even the most optimistic estimates and almost triple the government's minimum price.

There were eight bidders at Tuesday's auction and three stayed in the hunt until the end.

Sino said it plans to build a Grade-A office and retail complex on the site, and possibly a five-star boutique hotel.

Land sales are the government's biggest revenue source, and this result increases the likelihood it will end the year with a budget surplus after four years of deficits. Originally, it did not expect to return to surplus until the 2008-09 fiscal year.

So far in the 2004-05 year ending March, the government has raised almost HK$20 billion from land sales, exceeding its target by 67 percent.

Tuesday's auction was the last scheduled for this fiscal year.

The lot that Sino purchased is opposite Kerry Properties' Enterprise Square Phase III office development and not far from Telford Plaza, one of the largest malls owned by the MTR Corp.

Sino's price translates to HK$2,988 per square foot. If, as some developers and analysts expect, office prices in Kowloon Bay rise by 30 percent to HK$5,500 psf in the next two to three years, Sino Land would turn a decent but not fabulous profit.

Centaline Surveyors associate director Chris Chau estimates total costs of the planned development, including land, construction and other fees, at about HK$3 billion, or HK$5,000 psf.

Sino Land chairman Robert Ng said Kowloon Bay has the potential to become another Tsim Sha Tsui East.

``We should look at the development potential of Kowloon Bay from a macro prospective. It is a part of the South Kowloon development district with a spectacular waterfront,'' he said.

Referring to this year's land-sales windfall, Ng said the government should make a gift to the taxpayers.

``I think that it would be kind of the government to consider some tax concession for the public, such as a rates rebate for one season, or the suspension of the second phase of the salary tax increase, for those middle-class taxpayers who have being suffering for a long time,'' he said.

Stanley Ho, chairman of Shun Tak (Holdings), who made his fortune in property and casino gambling, said the auction is further proof that the market is booming.

If the government increases the number of small lots on its application list - where any developer can trigger an auction by matching the minimum price - ``there will be more fierce land auctions in the future since small developers will be encouraged to join in and bid.''

New World Development chairman Cheng Yu-tung also hailed the auction result. ``I think the property market will be booming and achieve a 10 percent rise this year,'' he said.

Eric Ho, director of CBRE Consulting at CB Richard Ellis, said the HK$1.82 billion price far exceeded even the most optimistic surveyors' estimate of HK$1.1 billion.

The low end of estimates was about HK$800 million.

Developers and analysts said the price reflects continued demand for office developments, especially in non-core areas.

Chinachem sales manager Ng Song-mou said the high bids may persuade the government to put more commercial plots on the application list.

Law's Holdings director Law Kar-po said the price of the Kowloon Bay site is reasonable, assuming a selling price of more than HK$5,000 psf.

``They [developers] are not only optimistic about the Kowloon Bay office market, but the overall office market in Hong Kong,'' he said.

Jones Lang LaSalle regional director Lau Chun-kong said bidder numbers indicated that developers are hungry for land.

According to auctioneer Chris Mills, eight developers made 62 bids.

In final bidding, Sino Land battled Kerry Properties and Law's Holdings.

Bidders are not required to identify themselves, but Lau said the city's two biggest developers, Cheung Kong (Holdings) and Sun Hung Kai Properties, probably took part.

2. Cartoon
SCMP, 22 February 2005

3. Bypass only answer: Suen
Sylvia Hui and Paris Lord, The Standard 23 February 2005

The proposed Central-Wan Chai bypass is the only answer to reducing heavy traffic congestion, planning chief Michael Suen said.

The Secretary for Housing, Planning and Lands said there is an "urgent need'' for the bypass, and pledged that no land reclaimed in Wan Chai North will be used for land sales.

Harbor protection groups said Suen is ignoring alternatives such as electronic road pricing (ERP) and is just repeating his standard arguments.

``I promise that for the minimum reclamation for the bypass, the reclaimed land will only be used by the public for enjoyment of the harbor front,'' Suen said. ``We will not use the land for any kind of commercial activity. Nor will we sell it off to build skyscrapers.''

Land being reclaimed in Central includes one site zoned a ``comprehensive development area'' featuring buildings between two- and 10-stories.

Suen maintains that traffic congestion in the area is worsening and that by 2011 it will take 45 minutes to travel by car from Central to Causeway Bay during rush hour unless the reclamation, bypass and trunk road networks are built. It takes about 15 minutes now, and will be shortened to five minutes with the bypass, Suen said. Public consultation for the reclamation is a ``new attempt'' compared to past consultations because it aims to engage the public before preliminary planning concepts are produced, he added.

The bypass begins in Central beside the International Finance Centre, and may end near the Royal Hong Kong Yacht Club. Three route proposals requiring between 10 to 25 hectares of reclamation were released then withdrawn last month by the government and the Harbourfront Enhancement Committee, after committee and public outrage.

While London and Singapore successfully use electronic road pricing, the Hong Kong government remains doubtful it can ease congestion.

``For [ERP] to be effective we must first have an alternative route, and second gain public acceptance,'' deputy secretary for Environment, Transport and Works Thomas Chou said.

In addition to ERP, Singapore's costly Certificate of Entitlement has kept a lid on the number of cars on the road. For example, a brand new 2-litre private car with a market value of S$25,000 (HK$119,000) will, after various taxes and charges, sell in the Lion City for S$105,888 (HK$504,700). The same car in Hong Kong, after the first registration tax, can retail for about HK$160,000.

Chou said road pricing can only complement the bypass, not replace it. While overseas experience shows the system can reduce road traffic by 14 to 16 per cent, an alternative route is necessary to make the system work.

Convenor of the Designing Hong Kong Harbour District initiative Paul Zimmerman said aside from one brief reference to the enhancement committee, Suen's speech showed the government's lack of commitment to improving the harbor front.

``There's absolutely no mention the government is going to make a real effort in making a fantastic harbor front, which is an indication that they haven't budgeted for it,'' Zimmerman said.

The government is using the enhancement committee solely to ensure the bypass meets the Court of Final Appeal's 2004 judgment that any reclamation has to meet an ``over-riding public needs test'' as well as its obligations under the Protection of the Harbour Ordinance, Zimmerman added.

Save our Shorelines chairman John Bowden said Suen's speech was an example of the government not giving ``all the facts'' about possibilities for the Central and Wan Chai harbor fronts that do not require reclamation.

``The [trunk] road could be somewhere else, you could improve the ones you've got, you could introduce ERP, which is not a stupid idea,'' Bowden said.

Initial studies show road pricing will work in Hong Kong, but these were never implemented, Bowden said.

The government insists it needs to build the road network ``P2'' between Central and Wan Chai to reduce congestion caused by Two IFC and the Four Seasons Hotel. But these buildings will be finished before P2, and road pricing could be implemented in two years, Bowden added. ``It's the same old argument,'' he said. ``By saying them again and again, and loudly, I think they're just hoping people will give up and let them build it.''

4. Signature system makes mark
STUART BIGGS, SCMP 22 February 2005

Signature analysis from Penflow measures a person's unique trait that is behavioural rather than physical. The software measures a signature according to four variables - pressure, speed, acceleration and rhythm (including "airtime") - which it authenticates against a stored algorithm.

Though biometrics are everywhere from e-passports, hospital smart cards and laptop fingerprint scanners, the technology still seems to have an image problem.

Most people are much happier to see the laser scanning of retinas in films than at their local bank.

But with security supposedly this year's (and every other year's) buzzword, companies are facing a critical dilemma - annoy the customers or be accused of negligence.

London-listed Penflow Technology believes it has the answer. The company has developed a biometric security authentication system based on signatures. "The difference with other biometrics is that a signature is a socially acceptable method of authentication," Penflow Technology (Asia) director David Ng said.

"When customers go to the bank, they sign because they want to be recognised and identified. It doesn't have negative connotations of fingerprinting, yet a signature biometric is far more secure than an ordinary signature."

Penflow's technology differs from other biometrics such as retinal scans and hand geometry because it measures a person's unique trait that is behavioural rather than physical.

The software measures a person's signature according to four variables - pressure, speed, acceleration and rhythm (including "airtime") - which it authenticates against a stored algorithm.

The algorithm even changes along with a signature over time.

"Unlike electronic signature captures that are used today, Penflow's solution does not treat the signature as a graphic image," Mr Ng said.

"To fake a signature you would have to physically see the signature being signed, watch carefully the movements of how it is signed and then do considerable amounts of practice to get the speed, acceleration, pressure and air movements right.

"Is it possible to fake? Maybe, maybe not, but many banks are already more than satisfied with the level of security this technology provides."

Penflow's major customers include Credit Suisse First Boston and Israel's Bank Hapoalim. Mr Ng said banks in Hong Kong were on top of the company's priority list in Asia.

The company markets the technology as a workflow tool in large enterprises, or as a customer authentication tool for front-end operations in banks or mobile phone operators. But the technology also works in less lofty surroundings, such as the small café on the ground floor of Penflow's office building in North Point. Members sign for tea and coffee on a writing tablet and the amount is deducted from a prepaid account.

"If you look at the market, everyone is talking about security, but the way companies deal with this is by giving everyone a password. But this is inconvenient for the customer and security doesn't have to be this way. Customers can forget their password, or they can leave their smart card at home, but they'll never forget their signature and they'll never leave their fingers at home."

5. Viaduct would need reclamation of harbour
MARTIN WONG, SCMP 22 February 2005

A viaduct planned for the Western District waterfront could include reclamation work and breach the Harbour Protection Ordinance.

A government proposal on the viaduct, a two-way elevated deck running between 100 metres and 150 metres along the waterfront, is to be discussed by the Legco transport panel on Friday.

The viaduct is part of the proposed Route 4 highway linking Aberdeen and Kennedy Town.

"If [the viaduct] were to be taken forward, we would also need to review whether it could meet the Court of Final Appeal's `overriding public need' test for reclamation," the government's paper says.

The Court of Final Appeal ruled last year that any reclamation must abide by the "overriding public need" principle. The ruling found the government's previous plans breached the Harbour Protection Ordinance by not attaching enough importance to minimising reclamation.

The government also poses another option in the paper, a double-deck flyover along the coast that requires no reclamation. The paper says an MTR railway would be included in both proposals.

Society for Protection of the Harbour chairwoman Christine Loh Kung-wai said she was not in a position to comment on the paper because she had not seen it.

"However, I think the government already knows the public's view, that we don't like this kind of design on our waterfront."

The original plan to reclaim land for a tunnel or flyover was shot down in December 2003.

6. Iconic US author commits suicide
SCMP 22 February 2005

Hard-living writer Hunter S. Thompson, whose “gonzo” style of journalism made him a counterculture icon and inspiration for the character “Uncle Duke” in the comic strip Doonsbury, kills himself at his Colorado home.

7. Mega Tower stumbles at Legco hurdle
CHLOE LAI, SCMP 22 February 2005

The Wan Chai Mega Tower has been blocked for more than 10 years.
Sir Gordon Wu Ying-sheung has the legal right to build a single, 93-storey hotel tower at the site: that plan received the board's approval in 1994.

TALKBACK Should the Mega Tower get a green light? Send your comments to talkback@scmp.com . Please include name, address and phone number.

Sir Gordon Wu Ying-sheung has failed to convince legislators that his plan to build Hong Kong's biggest hotel will not damage the public interest.

Their concerns are expressed in a draft submission on the Mega Tower project, in Wan Chai, which will be discussed by Town Planning Board members on Friday.

It is a setback for the Hopewell chairman's efforts to secure approval for the $4.5 billion project.

In recent months, the infrastructure tycoon has cleared a number of hurdles in the way of his plan to build two 58-storey hotel towers.

But the legislators' submission questions the Transport Department's assessment of the likely impact on traffic, urges the preservation of trees that would be cut down under present plans, and calls for the government land that forms half the site to be auctioned.

While Hopewell has put forward proposals to ease traffic congestion in the area, the legislators say: "It remains unclear if the proposals can be implemented." They also cast doubt on the feasibility of a plan to build footbridges linking Queen's Road East and Spring Garden Lane. The new hotel would be bordered by Kennedy Road and Queen's Road East.

The legislators said auctioning the government land involved would generate maximum revenue for the treasury. The hotel plan relies on the government selling its land to the developer.

Legislators discussed the Mega Tower plan at two conferences and four internal meetings, after receiving complaints from nearby residents who would be affected by the development. The objections were mainly about the hotel's impact on local traffic, the loss of the existing greenbelt and obscured public views.

The meetings were chaired by Democrat Sin Chung-kai.

Nine legislators joined the discussions, including independent Albert Cheng King-hon and Patrick Lau Sau-shing, Choy So-yuk of the DAB and Article 45 Concern Group's Audrey Eu Yuet-mee and Alan Leong Kah-kit.

The Town Planning Board postponed a meeting on the project to Friday, to await the legislators' views.

Even though the board rejected the proposal last summer, it changed tack after Sir Gordon made some changes to his plans and threatened court action.

In previous discussions, the board accepted the claim that the new hotel would not worsen road congestion to an unacceptable degree.

It rejected a bid by a residents' group to block the development.

It also dismissed a green group's call for the government land to be turned into a green belt.