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1. Housing Authority proposes to sell HOS flats to Government

2. Developers gear up for fierce bidding

3. Reda pushes for sharing of mega project

4. 'Heritage sites must not be just for rich'

5. LCQ4: Canopy for West Kowloon Cultural District

6. Housing Department studies building problems report findings

1. Housing Authority proposes to sell HOS flats to Government
Hong Kong Government, 19 May 2004

The following is issued on behalf of the Housing Authority:

Housing Authority's (HA) Subsidised Housing Committee has endorsed a proposal to sell 4,304 surplus Home Ownership Scheme (HOS) flats and 538 ancillary car parking spaces to the Government for reprovisioning existing staff quarters at a development cost of about $2,750 million.

"This proposal is among some of the options considered by the committee for disposing of 10,264 surplus HOS flats in seven unsold developments," the Permanent Secretary for Housing, Planning and Lands (Housing), Mr Leung Chin-man, said today (May 19).

Mr Leung noted that the flats and car parks were priced to reflect actual expenses incurred by HA for flat construction and project supervision.

"Under the proposal, the payment period will spread over 10 years according to a fixed payment schedule taking into account HA's cashflow position from now until 2007-08 and the Government's fiscal position up to 2008-09," Mr Leung said.

"The proposed sale is subject to funding approval from the Finance Committee of the Legislative Council," Mr Leung added.

Flats selected by the Government are located in four developments comprising 13 Concord and two New Cruciform blocks.

These include 1,992 flats and 249 car parks in Yau Mei Court and 1,000 flats and 125 car parks in Ko Cheung Court in Kowloon as well as 800 flats and 100 car parks in Kwai Chung Phase 7 and 512 flats and 64 car parks in Kwai Yung Court in the New Territories.

Mr Leung noted that HA had earlier identified another 2,920 HOS flats comprising 1,800 flats in Ko Cheung Court, 400 in Yau Mei Court and 720 in Lam Tin Phase 6 for conversion to public rental housing.

The HA will explore other options to dispose the remaining 3,040 flats comprising 1,216 flats in Tung Tao Court at Aldrich Bay, 1,480 in Yau Mei Court at Yau Tong and 344 in King Hin Court in Ngau Chi Wan.

2. Developers gear up for fierce bidding
Raymond Wang, The Standard 19 May 2004

Chinese Estates Holdings and Wharf (Holdings) will jump on the land-bidding bandwagon when the government holds its first land auction in 20 months next week.

``Fierce bidding is expected as a lot of developers have shown keen interest, including Chinese Estates, in the upcoming land sale,'' Chinese Estates chairman Thomas Lau said after the company's annual general meeting yesterday.

``The recent consolidation in the property market and the fluctuation in the stock market will not impede next week's auction,'' he said.

Wharf chairman Peter Woo expects many developers to take part in the auction, the first since September 2002. Wharf will participate in the auction although Woo did not have high hopes the company could outbid other developers.

Surveyors predict the two sites in Ma On Shan and Sha Tin will fetch up to HK$2.3 billion, about 37 per cent more than the combined reserve price of HK$1.675 billion, as many developers need to replenish their land reserves.

The sites are likely to attract heavy bidding from developers including Sino Land, KWah International and Nan Fung Development, they said.

Chinese Estates, which has been attempting to trigger land sales from the application list, said the company is not interested in an urban renewal project in Tai Kok Tsui.

The Urban Renewal Authority (URA) is inviting developers to submit expressions of interest for the Cherry Street redevelopment project in Tai Kok Tsui. Submissions will close next week.

Meanwhile, Lau said rising oil prices and the possibility of interest rate rises are unlikely to have a significant impact on Hong Kong's property market. ``Since the public is expecting the United States to raise interest rates, and it is just a matter of when, I believe the interest rate hike factor will have more impact on the financial market,'' Lau said.

Woo, however, said the continued adjustment in the financial market could also affect the property market.

``But that adjustment could provide an opportunity for [property] buyers,'' he said.

Lau did not believe other developers would follow Nan Fung's decision to cut prices by 10 per cent for selected flats.

Sun Hung Kai Real Estate Agency executive director Victor Lui echoed Lau's view, saying developers are still confident about the property market.

``Although some individual developers had cut prices for new projects, the number of units sold was only small and the prices can't be considered a new benchmark for the market,'' he said.

3. Reda pushes for sharing of mega project
Raymond Wang, The Standard 19 May 2004

The Real Estate Developers' Association (Reda) has made a third attempt to convince the government to let more than one developer take part in the HK$24 billion West Kowloon cultural hub project. Tenders for the mega development close next month.

Reda has written again to the government saying the project should be divided into small projects rather than giving the development rights to one company or consortium, a Reda spokesman said. The government has not responded.

Chief Secretary for Administration Donald Tsang said in October only one developer would be granted control to ``ensure its concept would be consistent''. And Secretary for Housing, Planning and Lands Michael Suen reinforced that position last week, saying any changes now would lead to ``serious delays''.

The chosen developer will be given a land grant of 50 years and will be responsible for financing, managing and operation of the project. It could generate profits from operating shopping complexes, residential flats, hotels and offices, the government said.

However, critics say the government could lose control of the 40-hectare waterfront development.

The chosen design, by award-winning architect Norman Foster, allocates 39 per cent of the site to arts and cultural use, 17 per cent for commerce, and 16 per cent for hotels and residential accommodation.

4. 'Heritage sites must not be just for rich'
CARRIE CHAN, SCMP 19 May 2004

District leaders have warned that three heritage sites in Central which are to be turned into tourist attractions should not become yet more privileged enclaves for the wealthy.

They are worried that the Central police station, Victoria Prison and the former Central court might be turned into deluxe hotels, the fate of the former Marine Police headquarters in Tsim Sha Tsui.

The Tourism Commission will invite private developers to present proposals on turning the three heritage sites into new attractions.

Central and Western district councillors said a survey conducted last year showed more than 60 per cent of 510 residents in the district hoped the sites could be turned into a museum, arts and cultural amenities, or library. Central police station is 139-years-old, the former magistracy is believed to have been built in 1847, and Victoria Prison was built in 1841.

The councillors, who met Deputy Tourism Commissioner Duncan Pescod yesterday, also said the government should have representatives of public opinion sitting on the Central Tender Board.

Councillor Kam Nai-wai quoted Mr Pescod as saying that the Central and Western district officer would be invited to sit on the Central Tender Board.

But Mr Kam said: "We do not think the district officer can represent public opinion because the officer is a government official. Ordinary residents have no say over the project."

A Tourism Commission spokeswoman said the department was still finalising the tender document. "There is already a well-established mechanism to collect public views through the district council, whom we have consulted twice. The district council can also monitor by requesting the district officer to report on the progress of the bidding."

Cheung Kong (Holdings) has unveiled a $650 million scheme to convert the former Marine Police headquarters into a 132,000 sq ft hotel and retail complex.

5. LCQ4: Canopy for West Kowloon Cultural District
Hong Kong Government, 19 May 2004

Following is a question by the Hon Wong Sing-chi and a reply by the Secretary for Housing, Planning and Lands, Mr Michael Suen, in the Legislative Council today (May 19):

Question:

A number of mandatory requirements have been stipulated in the Invitation For Proposals for the development of the West Kowloon Cultural District, including the provision of a "canopy" covering at least 55% of the Development Area. However, an official of the Territory Development Department revealed last month that the provision of the canopy or not would ultimately depend on whether its construction cost, as quoted in the received proposals, was too high, hence making it financially not viable. Regarding the development project, will the Government inform this Council:

(a)whether it has formulated contingency plans to tackle the scenario that construction of the canopy involves great technical difficulties or is too costly; if so, of the details of the plans; if not, the reasons for that;

(b)whether it has assessed, in case it is eventually decided that the canopy will not be provided, if the land earmarked for commercial uses can be sold in divided lots by auctions, with a view to generating more revenue; if so, of the assessment results; and

(c)whether, in view of the recent improvement in its financial position, it will consider dropping the approach of awarding the construction and operation of the entire project to a single developer, and providing the relevant cultural facilities with government funding; if so, of the progress of its consideration; if not, the reasons for that?

Reply:

Madam President,

My response to the three parts of the question is as follows :

(a) The canopy is a key feature of the winning design of the open competition on concept plan for the development of the West Kowloon Cultural District. The canopy links up the various arts and cultural facilities in the development area and will also become a new and distinct architectural icon of Hong Kong and a tourist attraction. Besides, the canopy has many advantages and serves many useful purposes. It will create an open and comfortable environment for the outdoor arts and cultural facilities and rest areas, so that enjoyment of those facilities by the public would not be affected by weather conditions. That is why the Government has included the canopy as a mandatory requirement in its Invitation for Proposals. The Invitation for Proposals also states that any proposal which does not meet all the mandatory requirements will not be considered.

The Government has conducted an assessment of the design of the canopy and consulted the professional bodies. The Government considers that technically speaking there are no particular problems in constructing the canopy. Interested potential proponents have not indicated to the Government that constructing the canopy would give rise to great technical difficulties. As to the actual construction cost of the canopy, we need to study proponents' proposals before we can assess the construction cost of the canopy and the overall financial plan of the proposals. At this stage, the Government does not consider that the design of the canopy and its financial aspects would affect the viability of the development project. In view of the above consideration, the Government considers that there is no need to make any contingency plans.

(b) Part 2 of the Hon. Wong Sing-chi's question is a hypothetical question. I would like to reaffirm here that the canopy design is a distinctive and major feature of the integrated design of the West Kowloon Cultural District development. The Government does not consider that the design of the canopy and its financial aspects will affect the viability of the project. Proponents must include the canopy design in their proposals, otherwise they will not be considered by the Government.

(c) Although the Government is currently in a slightly better fiscal position comparing with that six months ago, the Government is still faced with a huge deficit which according to the latest Medium Range Forecast as included in the 2004-05 Budget will only be removed in its entirety by financial year 2008-2009. Under the circumstances, the prospect of securing public funds of the size required for providing these facilities without adversely affecting the achievement of the Government fiscal objectives is remote. As stated by the Chief Secretary for Administration in his reply to an oral question raised in the Legislative Council in November last year, dividing the project into smaller packages and inviting tenders would first require the Government to draw up a master layout plan based on uncertain assumptions of what would be commercially viable. At the same time, the Government has to tender out different construction contracts. The facilities will be designed and built by different contractors, making it very difficult for the different designs to match with each other. The Government would also have to allocate substantial resources to project management and, in due course, venue operation on a long term basis. This approach is not in line with the Government's policy in promoting serving the community by using the private sector. The opportunity to make use of the private sector's financial and professional strength to develop the West Kowloon Cultural District as a self-financing project and deliver high standard arts and cultural and commercial facilities would be lost. The Government is therefore taking forward this cultural project in a single package through the Invitation for Proposals.

6. Housing Department studies building problems report findings
Hong Kong Government, 19 May 2004

The Housing Department (HD) will study carefully the findings and consider the recommendations of the Second Report of the Legislative Council Select Committee on Building Problems of Public Housing Units published today (May 19).

"The recommendations are constructive and useful. The inquiry is thorough and comprehensive," a spokesman for the Housing, Planning & Lands Bureau said.

He thanked the Select Committee for its hard work since 2001.

The spokesman said that HD had been implementing all the recommendations for public housing building quality improvement as detailed in the First Report published in January last year.

"The recommendations covering institutional framework, project management and site supervision have been fully implemented. The institutional framework has been overhauled and streamlined. The entire project management system has been revamped and site supervision substantially strengthened," he said.

"We will continue to co-operate with stakeholders to improve the quality of public housing and foster a quality-oriented construction industry," the spokesman added.

Referring to the point about provision of information to the Select Committee, the spokesman said that the administration had no intention to withhold information from the Select Committee.

"The administration is committed to co-operating with the Legislative Council fully on all matters relating to the inquiry. HD has all along provided the Select Committee with all the required information to assist its inquiry," he said.

On accountability of HD officers, the spokesman said that the department would examine any new issues in a fair manner according to established civil service procedures and principles.