Lawmakers have questioned the decision to award a HK$70 million project, including a landscaped piazza at the Big Buddha on Lantau, to the MTR Corporation without a tender.

"The MTRC is a transport company. You have to query why the government didn't put this project out to tender," Democratic Party legislator Fred Li Wah-ming told an economic services panel meeting.

Liberal Party chairman James Tien Pei-chun asked whether the Po Lin Monastery, which will benefit from the works, should contribute to the costs if it charged visitors.

Just over half of the estimated HK$69.4 million cost of the development, or HK$35.2 million, will go towards a landscaped piazza of about 1.52 hectares. A roundabout and footpath will cost HK$5.2 million, HK$5 million will be spent on a new public toilet and drainage works will account for HK$10.7 million. A further HK$6.5 million will be allotted for contingencies. The project is expected to generate about 152 jobs.

The MTR Corp will receive HK$8.4 million to cover costs related to design, contract work and site supervision, although only HK$6.8 million is included in this budget. The remaining HK$1.6 million will be funded under a government public works programme. The government will seek approval for the funds from Legco in November and work is scheduled to be completed by 2009.

John Binks, a chief engineer with the Civil Engineering and Development Department, said the government could have hired a consultant and tendered the project but found it more cost-efficient to have the MTR Corp on board. He believed the department had followed proper procedures in awarding the project.

"We are entrusting the MTRC with the construction because we want to ensure a holistic design that is consistent throughout. The MTRC is best placed to manage the flow of people because they understand the needs of the area," Mr Binks said.

The rail company owns the Ngong Ping 360 cable car that ferries people to within a short stroll of the monastery and the Big Buddha.

The MTR Corp has consulted the monastery throughout the planning and design process for the piazza. The religious Di Tan area, which borders the monastery and the Big Buddha, will be managed by the monastery, tourism commissioner Au King-chi said.

A lotus pond and the Bodhi Path, which will be lined with religious stone statues and sacred bodhi trees, were suggested by the monastery, Mr Binks said.

Shui On Group has announced that it will set up a joint venture with the mainland's Yida Group to take a controlling stake in a 15 billion yuan software park project in Dalian , Liaoning province.

In a statement to the Hong Kong stock exchange, the property developer said that under the deal the joint venture would take a 78 per cent stake in phase two of Dalian Software Park .

The venture would be 61.5 per cent owned by Shui On Land, 28.2 per cent owned by sister company Shui On Construction and Materials (Socam) and 10.3 per cent held by Yida, which developed the largely completed phase one.

The venture would buy the stake for 936 million yuan from Dalian-based Yida, which would hold the remaining 22 per cent, the statement said.

It added that the venture would pay the privately owned conglomerate an additional 2.14 billion yuan for land clearance, preparation and related expenses.

After the transaction, Shui On Land and Socam would indirectly own 70 per cent of the project, with the remainder going to Yida.

The ownership breakdown was revised from a non-binding memorandum of understanding signed with Yida in March, in which Shui On Private Group, the parent company of Shui On Land and Socam, was to participate in the joint venture.

"Key strategic partnerships with experienced developers such as Yida Group are important for our long-term growth," Shui On Group chairman Vincent Lo Hong-sui said.

According to the statement, Shui On Group and Yida will provide loans of up to 3.07 billion yuan in cash, dividends receivable and loan guarantees to the project.

The project has a gross floor area of about 3.9 million square metres and is due to be completed in eight to 10 years.

The software park's first phase opened in 1998 with a gross floor area of 1.6 million square metres. It had attracted 340 software firms to take up more than 95 per cent of available office space, Shui On said in March.

Shares of Socam jumped 4.02 per cent to HK$22.50 yesterday while Shui On Land shares closed up 2.52 per cent at HK$6.51.

Two Government sites were sold for a total of $1.74 billion at a public land auction held by the Lands Department this afternoon (May 29).

A Lands Department spokesman said this was the second land auction of the current financial year.

The first lot, Tuen Mun Town Lot No 422 at Tsing Lung Road , Area 58, Siu Lam, with an area of about 15,030 square metres was sold to Evermatch (HK) Limited for $960 million.  The opening bid was $585 million.  The site is designated for private residential purposes and the developer is required to complete a minimum gross floor area of 11,622 square metres.

The second lot, Tuen Mun Town Lot No 449 at Tsing Fat Lane , Area 58, Siu Lam, with an area of about 17,042 square metres, was sold to Citi-sky Development Limited for $780 million.  The opening bid was $525 million.  The site is also designated for private residential purposes and the developer is required to complete a minimum gross floor area of 13,293 square metres.

The auction was conducted at the Queen Elizabeth Stadium, Wan Chai by Assistant Director of Lands Mr Simon Yu, assisted by Chief Estate Surveyor, Ms Karen Chan.

The tender for the 90 per cent ownership of Merry Terrace in Mid-Levels has been withdrawn after offers submitted by the five bidders fell short of the owners' expectations.

It is now planned for re-tender in this quarter.

Sources said that the private owners were negotiating with Savills, an international property agent, about the details of re-tendering.

Property agents said the tender for the property this time would be worth between HK$3 billion and HK$3.5 billion, at least 12.5 per cent lower than the previous asking price of HK$4 billion.

The Merry Terrace owners appointed Jones Lang LaSalle to handle the tender early this year.

As the site has the potential to be developed into a large-scale luxury residential project, Merry Terrace attracted Henderson Land Development, Wheelock Properties, Nan Fung Development and an unnamed developer to submit bids in March. Swire Properties has also submitted an offering letter to the owners.

However, the offers submitted by the developers were lower than the owners' expectations of HK$4 billion, according to sources. "And all the offers were subject to different kinds of special conditions," one source said.

They included no height restrictions to be imposed by the government before the building approval for the redevelopment has been obtained.

Developers are worried that the government could impose restrictions on the site; it has put height limits on luxury districts such as the Peak and Kowloon Tong, according to property consultants.

Any height restriction will affect the profitability of the site.

Alex Ng, an executive director at Knight Frank, said: "Many developers are definitely interested in the site but they wouldn't offer aggressively for the site as they still need to acquire the remaining units as well as face potential development restrictions."

Merry Terrace at 4A-P Seymour Road was built in 1963. It comprises five 14-storey residential towers with 196 units and a saleable area of 202,944 square feet.

The 52,466 square foot site has been developed with a plot ratio of 3.9. However, the site could have a plot ratio of nine, based on town planning regulations and building ordinances. Merry Terrace could be redeveloped into a luxury residential project with a maximum gross floor area of 472,194 square feet.

Developers are aggressive in land acquisition in the area. Emperor International Holdings has acquired 90 per cent ownership of 9A-H Seymour Road and Ying Fai Mansion . A major developer has acquired part ownership of old buildings in Caine Road and Seymour Road for three redevelopment projects.

Charles Chan Chiu-kwok, the managing director of Savills Valuation and Professional Services, said developers were interested in sites in Seymour Road as they could gain extra floor area through redevelopment without paying land premium.

"No land premium is payable for redevelopment since government leases for most of the sites at Seymour Road have no restrictions on development plot ratio," Mr Chan said.

It is easier for developers to acquire old buildings in the area due to the widening gap between prices of existing flats and new projects. Prices of new properties in the area would be more than HK$10,000 per square foot while prices of old buildings ranged between HK$5,000 and HK$6,000 per square foot only, according to Mr Chan.