1 Top developers vie for cruise terminal project
Ng Kang-chung and Yvonne Liu, SCMP 8 March 2008

Hong Kong's two biggest developers - Cheung Kong (Holdings) and Sun Hung Kai Properties (SHKP) - are behind the two high-profile consortiums vying for a deal to build and operate the city's new cruise terminal, set to open in 2012.

The terminal, to be built on the southern tip of the former Kai Tak airport runway, is also a core project to turn southeastern Kowloon into a residential and commercial hub.

Just as the tendering deadline was expiring at noon yesterday, two bids were reportedly received by the government. SHKP, which formed a partnership with three other firms in January, was the sole contender until yesterday.

Cheung Kong said its wholly owned subsidiary Asia Pacific International Enterprises had teamed up with Canadian ports operator Ceres Terminals to submit a tender for the project. Ceres is a leading cruise- terminal operator. It operates the world's largest terminal, Canada Place in Vancouver, among others.

The consortium's main rival will be an alliance of SHKP, Star Cruises, VXL Capital, and Nan Fung Development. SHKP said it believed the four companies would make a powerful alliance to deliver a cruise terminal that would attract high-spending passengers from around the globe.

Surveyor Alnwick Chan Chi-hing, an executive director at property consultancy Knight Frank, said the response had been "expectedly cautious".

"The project requires high technical know-how and big investment. Not many companies can do it alone, and finding a partner is not easy either," said Mr Chan, who specialises in town planning and development.

He also said it could take a very long time before the project became profitable. "A major project in the southeast Kowloon-Sha Tin-Central link is still under planning. When the first berth is open in 2012, the Kai Tak area will still be in its early stage of development," he said.

He said he did not expect the district would be fully developed until about 2030.

Chief Executive Donald Tsang Yam-kuen has highlighted the Sha Tin-Central link as one of the top 10 infrastructural projects in the next decade. Work was not expected to start until 2010.

The successful tenderer is expected to design, build, operate and manage the new cruise terminal for 50 years, and to begin operating the first berth in February 2012.

The government said earlier that it expected the development costs for the berthing and supporting facilities essential for the operation of a cruise terminal to be about HK$2.4 billion.

A Commerce and Economic Development Bureau spokeswoman said: "The successful tenderer is expected to be announced in the second quarter of the year."