1 Government has got its sums wrong for arts hub: experts
Helen Wu, SCMP 31 May 2008

The government has underestimated the cost of building cultural facilities in the West Kowloon arts hub and overestimated its return on the investment, independent experts hired by the Legislative Council told lawmakers yesterday.

But Permanent Secretary for Home Affairs Carrie Yau Tsang Ka-lai said the proposed HK$21.6 billion capital budget would be adequate if "things went accordingly".

The experts helped University of Hong Kong company Versitech compile a report for the Legco subcommittee overseeing the arts hub project, which questions the government's assumptions about its financing. In particular, the report questioned the financial viability of the project's centrepiece, the so-called M+ museum of modern art.

Wong Kwok-chun, associate professor of real estate and construction at HKU, told the subcommittee yesterday the government's projections contained "overestimations and underestimations" that led him to doubt it could accomplish all it intended with the HK$21.6 billion, which will take the form of an endowment fund.

The university's chair professor of real estate and construction, Chau Kwong-wing, said it was inappropriate for the government to take a long-term approach to estimating increases in construction costs when most of the contracts for construction would be signed in the next 10 years. The government has assumed costs will rise 2 per cent a year.

He said it would be more reasonable to base the estimate for cost inflation on the trend in recent years.

But Deputy Secretary for Home Affairs Esther Leung Yuet-yin said annual cost inflation over the past 20 years had fluctuated between 25 per cent and minus 13 per cent.

Professor Chau also said the estimated investment return of 6 per cent was too optimistic, given that the return on low-risk, high-quality, short-term bonds was about 3 per cent a year.

"We cannot look to the long-term return because we will need a significant amount of money at the early stage for construction-related expenses," he said. Ms Leung said the estimated investment return was in line with the historical returns on high-quality bonds overseas.

The government intends to ask Legco's Finance Committee next month to approve the HK$21.6 billion endowment. It will respond to the advisers' doubts on Thursday.

2 Planners squabble over Queen's Pier site
Olga Wong and Helen Wu, SCMP 31 May 2008

Dissent has broken out in the Hong Kong Institute of Planners over the body's U-turn on the preservation of Queen's Pier.

The institute, which had previously insisted the pier be preserved at its original - soon to be landlocked - location, issued a position paper last week supporting the option of placing the building on the harbourfront.

But this view is hotly opposed by some members, who say they were not consulted.

The paper - released last Friday, one day before a community workshop on new planning concepts for the Central waterfront was held by the Planning Department - details the institute's advice and recommendations to the government.

"The majority view of members supports the option of putting Queen's Pier on the harbourfront so it will function again," the paper says, adding that a sculpture could be designed for the original site to commemorate the pier.

Ng Mee-kam, an associate professor of urban planning at the University of Hong Kong, said the change violated the planning principle that efforts should be made to preserve historic structures in situ as far as possible.

She said planners should respect the spatial relationship of Queen's Pier, the City Hall and Edinburgh Square.

"On an issue of this strategic importance, the institute should conduct a proper survey on members' views," she said.

Former institute vice-president Pong Yuen-yee said she wanted to know why it revised its position after a hasty consultation exercise.

In a position paper released in April last year, when the first stage of the public consultation on the Central waterfront was carried out, the institute said efforts should be made to achieve in-situ conservation of the entire structure.

The institute is chaired by planner Ling Kar-kan, who works for the Development Bureau as a principal assistant secretary.

Kim Chan Kim-on, the institute's vice-president, said two meetings, attended by only about 15 members, were held last month and this month to discuss the institute's position.

He said most of those present supported putting the pier on the harbourfront.

"We did conduct surveys in the past to collect members' views but the participation rate was disappointing," he said, adding that a document supplementing the position paper would address the views of the minority at the meetings.

"The document will be released next week," he said.

Town planner Kenneth To Lap-kei, who attended the two meetings, said that about a dozen members were present and most of them supported the option of relocating Queen's Pier so its function could be restored.

But he said the institute should have extended its consultation before issuing the position statement as it had made a U-turn from its original stance after just a year.

In her column in the South China Morning Post on Thursday, Christine Loh Kung-wai, the chief executive of the Civic Exchange think-tank, also criticised the institute's position paper as an effort to show loyalty to the government.