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1. Learn from Grand Promenade in hub planning, officials told
MAY CHAN , SCMP 16 February 06

Learn lessons from the Grand Promenade project or repeat the farce in West Kowloon, town planning experts warned yesterday.

They called on the government to be more specific in its land lease conditions on matters such as building density, land use and the calculation of gross floor area.

They were speaking after legislators fiercely criticised decisions taken by former buildings chief Leung Chin-man on the gross floor area calculation for the Grand Promenade project in Sai Wan Ho - decisions said to have cost the government $125 million in land premium revenue.

Hong Kong Institute of Architects vice-president Vincent Ng Wing-shun said the Buildings Ordinance, dating to the early 1950s, did not offer specific guidelines on whether certain types of public facilities could be exempted from the calculation for floor area.

"In the case of Grand Promenade, the Building Authority was given discretionary power in exempting public transport terminuses from the gross floor area calculation because the item was not covered by the ordinance," Mr Ng said. "A lot of the community and cultural facilities under the West Kowloon [arts hub] project do not fall under the ordinance either."

Hong Kong Institute of Surveyors spokesman Lau Chun-kong advised the government to be specific. "The government has absolute power in drafting the land lease. It should list what facilities are to be exempted from the gross floor area calculation and what facilities are not, under the West Kowloon project." But he did not see a need to revise the Buildings Ordinance.

"Amending the ordinance may not be the best way to cope with the rapid changes in town planning," Mr Lau said.

"On the other hand, in recent years the government has already shown sustainable improvements in laying out specifications on gross floor area calculation exemptions in the lease conditions of new plots of land. The government must learn its lesson from the Grand Promenade project, though, and seek to avoid the same pitfalls."

Legislator Patrick Lau Sau-shing said the government had already taken enough precautions by limiting the plot ratio governing development density to 1.81 under the revised scheme for the West Kowloon project.

Mr Lau, who represents the architectural, surveying and planning constituency, said the planning and lands departments should reduce the room for discretionary decisions by the Building Authority. "If the [two departments] are more specific on building density, building height and planned land use, [the authority] will be less likely to exercise ... discretionary power," he said.

2001
January 12,000 square metre site now housing Grand Promenade sold by tender to Henderson Land Development
2005
November 16 Director of audit questions former buildings director Leung Chin-man's exercise of his discretionary power to provide additional land to Henderson despite strong objections from Lands Department. Decision helped developer double the number of flats on site - losing the government at least $125 million in revenue. Henderson Land paid additional premium of just $6 million for the 10,700 square metres, enabling it to make an estimated $3.23 billion
November 16 Chief Executive Donald Tsang Yam-kuen appoints inquiry into land grant. Expected to deliver its findings next month
November 28 Mr Leung goes on pre-retirement leave from his last civil service position as permanent secretary for housing, planning and lands and director of housing. Legislative Council's Public Accounts Committee holds first of its six public hearings to receive evidence on findings and observations of the director of audit report. Mr Leung refuses to appear, saying he is filing an application for a judicial review of the report
November 29 Mr Leung appears at second day of committee meeting after it threatens to consider issuing a summons to order his attendance. He refuses to answer questions and committee exercises its power to summons him to give evidence under oath
December 1 Mr Leung tells committee he switched his civil servant's hat for his other hat as the Building Authority when deciding whether to grant property developers more floor space
December 8 Committee hears that Lands Department officials critical of planned concession to Henderson for Grand Promenade development were not invited to meeting on October 10, 2001, at which Mr Leung decided to approve developer's application
December 9 Mr Justice Michael Hartmann of the Court of First Instance grants Mr Leung leave for a judicial review of auditor's report. Public Accounts Committee holds third meeting
December 13 Fourth committee hearing told by Mr Leung that sea views and land premiums carried no weight when he considered granting Henderson more floor space in exchange for the public transport terminus at Grand Promenade
December 19 Fifth hearing by committee

2. Tung Chung line the next shoppers' paradise
ANITA LAM , SCMP 16 February 2006

MTR stations along the Tung Chung line will soon become a shoppers' heaven with more retail outlets being planned on the back of rising passenger flow which has seen annual growth of 10 per cent over the past five years.

The launch of the Tung Chung skyrail at the Ngong Ping 360 tourist attraction later this year is expected to spur growth, the MTR Corporation said.

The opening of Disneyland in September and AsiaWorld Expo in December last year boosted passenger numbers on the line.

"We expect the number of visitors to Lantau to be about 1.5 million a year after the cable car comes into service. We believe 60 per cent to 70 per cent of them, or about one million, will use the Tung Chung line," said Jeny Yeung, the MTR Corp's general manager for marketing and station business.

However, Ms Yeung believed the growth rate would slow to below 10 per cent this year as several major residential developments in the area had already been occupied.

The number of daily commuters using the Tung Chung line ranged between 26,000 to 45,000 last year.

Ms Yeung also expects shop rents to increase due to more business opportunities.

"Stores located in a good position at some of the busiest stations may see a double-digit increase in rent."

Nevertheless, retailers are flocking to set up stores at MTR stations. The number of stores at Tung Chung line stations has risen from 100 last year to 126 so far this year.

"Among the new entrants is a travel planning agency in the Hong Kong Station, and a pet food shop in Tung Chung station is the first of its kind," Ms Yeung said.

She said the past two to three years had seen a shift in the type of retailers setting up shop in MTR stations, unlike in the past when it was mainly banks and convenience stores.

owever, the long-awaited foot masseur and oxygen bar is still on hold, as the MTR Corp says it has not found the right operator.

3. HA regains control over three construction sites
Hong Kong Government, 16 February 2006

The Housing Authority (HA) will regain control over three public housing construction projects tomorrow (February 17) at 10 am as the contractor has been failing to comply with the contractual requirements on progress of works.

"At the joint meeting of the Authority's Building Committee (BC) and Tender Committee (TC) today (February 16), Members were informed that the Notice of Re-entry served on the contractor in December last year would take effect as scheduled in view of the contractor's persistent failure to proceed with the works with due diligence," the Chairman of BC, Mr. Ip Kwok-him, said.

- Redevelopment of Shek Pai Wan Estate Phase 2 (2,398 flats) scheduled for completion in January 2006;

- Fanling Area 36 Phase 1 (3,167 flats) scheduled for completion in March 2007; and

- Fanling Area 36 Phase 2 (1,598 flats) scheduled for completion in February 2007.

Noting that the contractor's performance in terms of progress of work had become unacceptable since July last year, Mr. Ip said the progress of works at the three sites had been closely monitored through regular site inspections and progress meetings between the contractor and the Housing Department's (HD) professional staff.

"So far, the contractor has failed to demonstrate that there will be any promising improvement in its financial resources, labour strength and material supply to sustain satisfactory progress to complete the contracts," he said.

"The time and financial losses to HA will be enormous if the present situation is allowed to drag on indefinitely," Mr. Ip added.

Stressing that the HD had in place a comprehensive and effective system for monitoring the progress and quality of construction works, Mr. Ip said this type of action "is very rare in the industry and hence is an isolated case where re-entry to the contracts is an action of last resort."

"There is no question of inadequate supervision," Mr. Ip said, adding that the HA will claim against the contractor for the losses incurred by HA arising from the re-entry and the financial implications will be assessed after the award of the completion contracts.

At today's meeting, the TC also endorsed the adoption of a shortened tendering process and shortened construction period for Shek Pai Wan Phase 2 and Fanling Area 36 Phase 2. However, normal construction period and tendering process will be adopted for the Fanling Area 36 Phase 1 as the project nature is large and complex, the remaining works are substantial and the flat production is sizeable.

Mr. Ip stressed that there would be no major impact on the Average Waiting Time of three years although the anticipated contract completion date after re-entry would be delayed by 11 to 18 months for the three contracts.

"Shek Pai Wan Estate Phase 2 is the reception estate for tenants of Wong Chuk Hang Estate affected by the Comprehensive Redevelopment Programme. Subject to availability of suitable flats, tenants can choose flats in other estates on Hong Kong Island," he said.

Noting that the contractor had been suspended from tendering contracts under the HA for six months in September last year, Mr. Ip said it would be removed from our List of Contractors in September this year unless sufficient evidence could be provided to support significant improvement in its financial and corporate structure.

Mr. Ip dismissed allegations that the lowest price quoted for tendering construction projects might cause financial difficulties for contractors as successful bidders for HA's construction projects were not always the lowest bidders.

Under a new tender evaluation system introduced in 1999, tenders were assessed by the twin components of performance and price carrying 20 per cent and 80 per cent scores respectively.

The system was revised in August last year with an added component of corporate score carrying a 10 per cent score. The corporate score includes assessment of enhanced financial capacity and monitoring of payment of workers' wages. Scores for the performance and price components were revised to 15 per cent and 75 per cent respectively. Of the 55 tenders awarded under the new system, seven tenders did not go to the lowest tender.

Mr. Ip said the HA had fully paid the contractor all the monies due to it according to the contract conditions. "It is the contractor's responsibility to pay its sub-contractors and workers," he said.

Expressing concern over the welfare of workers, Mr. Ip said HD had pro-actively taken part in various conciliation meetings among the Labour Department and representatives of workers and trade unions.

"HD will continue to provide assistance where possible. However, the HA is not in a position to pay the contractor's domestic sub-contractors and their workers as there is no contract provision for direct payment to the workers.

"It will set a bad precedent if taxpayers' money are used to pay for outstanding wages due by a commercial organization in financial difficulties to its workers," he added.

n common with practices in the private sector, the HA holds retention money, amounting to 10 per cent of the work done certified under the contract is deducted from every interim certificate until the two per cent cap of the total value of the contracts is reached. It is a safeguard against defective performance or non-performance by the contractor. "It will not be sufficient to cover the losses incurred by the HA arising from the re-entry," Mr. Ip said.