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1. Police hold Gold-Face pair in flats fraud probe

2. Tamar site delay hurts Shui On

3. Tamar firms may seek expenses

4. What would be the best way to use the Tamar site?

1. Police hold Gold-Face pair in flats fraud probe
Dennis Ng, The Standard 29 May 2003

Police yesterday arrested Gold-Face Holdings managing director Tai Chi-wah and group financial controller Lim Hau-chun over possible fraud in the disappearance of about HK$500 million from two incomplete Tuen Mun residential projects.

Officers from the Commercial Crimes Bureau arrested the pair yesterday morning after searching eight premises, including the listed developer's head office in Tsim Sha Tsui and its Yuen Long office, on Saturday.

The move came after receivers were appointed for the two low-density luxury projects, Villa Pinada and The Aegean, leaving buyers facing the prospect of paying mortgages on homes they may never own.

Sources said police arrested Tai, 48, and Lim, 50, after they went to police headquarters about 10am. Tai had earlier sought legal advice.

Tai was detained overnight at Wan Chai police station while Lam was taken to North Point police station.

Ernst & Young were brought in as receivers by a consortium of lenders led by Bank of China (Hong Kong) over non-payment of loans totalling about HK$384.6 million.

The receivers said later that only HK$2 million was left out of about HK$500 million paid by buyers.

Police who raided the company headquarters in Tsim Sha Tsui about 10am on Saturday seized about 17 boxes of documents and numerous computer discs before leaving about 5pm. Officers also searched the homes of some of Gold-Face's senior management.

A police spokeswoman said two men had been arrested ``in relation to a fraud case''.

The case has raised a chorus of concern over the rules governing pre-sale of uncompleted flats, a common practice in Hong Kong and the mainland.

But senior government officials, including Secretary for Housing, Planning and Lands Michael Suen, have said the existing safeguards are adequate and this is an isolated case. Developers have expressed similar views.

Tai, a practising architect, graduated from Manchester Polytechnic School of Architecture with a bachelor's degree in arts (architectural) and a diploma in architecture. Tai and John Wong - who resigned as a non-executive director of Gold-Face last Tuesday - have practised as Wong & Tai Associates Architects.

2. Tamar site delay hurts Shui On
Eli Lau and Keith Wallis, The Standard 29 May 2003

Shui On Group, one of the contractors short-listed for the now-postponed Tamar complex, would be cautious when bidding for future government projects, its chairman and chief executive Vincent Lo said yesterday.

Lo said he was ``disappointed'' by the government's decision to delay the HK$4.7 billion project as the group has already spent HK$10 million on preparatory work.

``I'm undoubtedly disappointed because my staff have done a lot of preparation work,'' he said after an American Chamber of Commerce lunch. ``The group will be vigilant when submitting tenders for government projects in future.''

Lo said the group's listed arm, Shui On Construction and Materials, and its partner, Paul Y-ITC Construction Holdings, had spent as much as HK$10 million on the project.

They were among the five construction consortia chosen to bid for the contract. The others are China State Engineering Corporation in a joint venture with Hip Hing Construction; DRC Tamar joint venture; Gammon Skanska and Hsin Chong Construction in association with Obayashi.

The administration has put the new Tamar government complex plan on hold for six months, saying it has to ``review its spending priorities'' because of the HK$68 billion budget deficit. The decision follows postponement of work on the HK$22 billion Route 10 highway.

The government is also reported to have halted three land reclamation projects due to the property market slump. The three reclamation projects, with a combined area of 126 hectares, are in Western District on Hong Kong Island, and Tsuen Wan Bay and Sham Tseng in the New Territories.

Shui On's construction division derives most of its revenue from government projects. For the the year ending March, the company earned HK$1.97 billion, or 68 per cent of total turnover, from jobs for the Housing Authority.

Lo also revealed that plans to spin off the group's property assets for a separate listing had been delayed due to the Iraq war and the Sars outbreak.

Shui On Construction and Materials shares closed unchanged yesterday at HK$4.60.

Keith Griffiths, chairman of leading architect Aedas, estimated that the 15 construction and design groups that initially lodged submissions for the Tamar project had spent a combined HK$150 million on their offers.

Aedas director David Roberts said: ``This was at a time when companies could least afford it''.

Griffiths said the five shortlisted groups had spent considerably more on resources in preparing to tender.

He said the China State Construction-Hip Hing consortium had reserved an entire floor of its office at Wan Chai's China Overseas Building to work on its bid.

Aedas, which is among the five shortlisted design groups, had also expanded the floor area of its offices to work on the Tamar project.

Griffiths said the money that had been spent by contractors and design firms ``was a huge waste of resources''.

This was money that could have been spent improving Hong Kong's environment. Using the government's fee rates, Griffiths estimated the HK$150 million was equivalent to 150 man-years of effort.

``All we've got for that now is an HK$8-an-hour car park,'' he said.

Griffiths believed that the delay would give people time to re-open the debate about the future of the site.

His own view was that, while the landmark area should be used as a civic complex and include a replacement Legislative Council complex, ``whether there should be space for government is a mute point''.

He believed the new Legco building ``should be an example of green and sustainable architecture that would act as a hub for democracy in Hong Kong''.

3. Tamar firms may seek expenses
LOUISA YAN, SCMP 29 May 2003

Chairman of the Shui On Group Vincent Lo Hong-shui said yesterday he was surprised by the decision to put the Tamar site project on hold, saying the company would think twice before bidding for future government projects.

Mr Lo said his company had lost millions of dollars because of the decision. He said he hoped the government would review the project later.

"We will think more carefully next time when we decide to bid for other government projects," he said.

The pre-qualification document stated that the government was not liable for any expenses incurred or suffered by applicants in preparing their submissions.

But legislator Lau Ping-cheung, who represents the architectural, surveying and planning constituency, said the common law in Hong Kong might allow companies to pursue their losses, even though the firms had not signed contracts with the government.

"Since the government had shortlisted five consortia to bid for the project, the pre-qualification exercise would mean the constructors had a reasonable expectation that they would get the bid," he said.

"Pre-qualification is a common practice of the government. Theoretically speaking, each consortia had a one-in-five chance of securing the work. They won't be able to sue for the expected returns [of the project] because they might have lost money. But they can sue in order to recover the cost in preparing for the submission."

But lawyer and legislator Audrey Eu Yuet-mee said it was unclear whether common law could be relied on in this case.

"It is a lot more complicated than what appears on paper," she said.

The Paul Y-Shui On Joint Venture is one of the five construction firms shortlisted by the government. The others are China State-Hip Hing Construction Joint Venture, DRC-Tamar Joint Venture, Gammon Skanska and Hsin Chong-Ohayashi Joint Venture.

The government shelved the $4.9 billion project on Monday just before tendering was due to begin.

4. What would be the best way to use the Tamar site?
SCMP, 29 May 2003

Delaying the development of the Tamar site gives a renewed, but slim, hope that the government will take a more dynamic approach to Central’s redevelopment and regeneration. Tamar is but one site in a jigsaw that, with vision, would stretch from Tamar to the Star Ferry, including Statue Square and the Cenotaph, linking with the Legislative Council building then into Chater Garden.

Comprehensive integration can also be achieved with the next phase of the Central reclamation.

Existing uses are the PLA Garrison headquarters (an anachronism in a modern city centre); a tired and run down City Hall (an early 1960s building whose time has long past); the Star Ferry concourse and car park (a disgraceful use of civic space); Statue Square (a popular focus that would benefit from upgrading and traffic-free connection to the other sites); the Legislative Council building (the only historic link in Central to Hong Kong’s past); and the sad expanse of flagstones that dominates Chater Garden.

The government has control of Tamar, City Hall, the Star Ferry concourse, Statue Square, the Legco building and Charter Garden – leaving the PLA headquarters as the last, and critical, piece for a comprehensively bold and imaginative regeneration.

No sensible town planning, urban design or land-use planning case can be made for the PLA’s continuation at Tamar. The government’s willingness to tackle its removal at the highest levels in Beijing is the key, and the evidence so far sadly indicates that the government will only skirt around its continued presence. Let its surrender of the site be seen as a magnanimous gesture by the PLA to the people of Hong Kong. In return, the government should build a new HQ on a more appropriate site outside the urban area. With the Tamar development delayed, the government has time to tackle the politically difficult but important surrender of the PLA HQ site.

Arthur Watson, Ap Lei Chau