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1. West Kowloon Cultural District proposals submitted

2. Paliburg for $1b Sai Kung island resort

3. Crunch time on cultural project

1. West Kowloon Cultural District proposals submitted
Hong Kong Government, 19 June 2004

The Government has received five submissions after the Invitation for Proposals for the development of the West Kowloon Cultural District (WKCD) closed at noon today (June 19).

The proponents who made submissions are : World City Culture Park Limited, Sunny Development Limited, Swire Properties Limited, Dynamic Star International Limited and Lam, Sze-tat.

"We will first screen whether the proposals comply with the Mandatory Requirements as set out in the Invitation for Proposals document," a Government spokesman said. "Those proposals that comply with the Mandatory Requirements will then be assessed against the assessment criteria, which are also set out in the Invitation for Proposals document."

The proposals will be assessed by a Proposals Evaluation Committee chaired by the Permanent Secretary for Housing, Planning and Lands (Planning and Lands) and assisted by dedicated assessment teams drawn from relevant bureaux and departments of the Government.

To safeguard the integrity of the assessment process and ensure that proposals will be assessed in a fair and impartial manner, all officials responsible for the assessment are required to strictly follow guidelines and procedures that have been prepared for this project with the help of the Independent Commission Against Corruption (ICAC). The ICAC will act as an observer throughout the entire assessment process.

"To enhance transparency and promote the widest possible public participation, we will exhibit all the proposals that comply with the Mandatory Requirements for public consultation," the spokesman said. "Our plan is to hold the exhibition sometime early next year. Concurrently during this period, we will consult professional bodies and the arts and cultural sector. We will take all opinions and comments collected into account in the assessment process. Before a decision is made on the selection of a preferred proponent, we will also consult the Town Planning Board and the Legislative Council."

Assessment of the proposals will cover three main areas : the technical aspects, the financial aspects, and the operation, maintenance and management aspects, with particular attention to the proponents' capability to ensure a high standard of operation and management of the arts and cultural facilities. Each of these areas is considered equally important, and each will be subject to a detailed and meticulous assessment by the Proposals Evaluation Committee.

The Government launched the Invitation for Proposals for the WKCD on September 5, 2003 to develop the 40-hectare waterfront site at the southern tip of the West Kowloon Reclamation into an integrated arts, cultural and entertainment district. The WKCD will not only facilitate development of the arts and culture in Hong Kong, it will also improve the quality of life of the community and promote Hong Kong's attractiveness as a tourist destination. The project will also generate significant employment opportunities, estimated at about 6,000 jobs in the short term.

It is envisaged that construction on the site will begin in April 2007 at the earliest and that the core arts and cultural facilities will come into operation in phases from 2011 onwards.

2. Paliburg for $1b Sai Kung island resort
Eli Lau, The Standard 19 June 2004

Paliburg Holdings, the property arm of Century City International Holdings, plans to develop a HK$1 billion ``Fantasy Island'' resort in Sai Kung.

Speaking after the annual general meeting yesterday, group chairman Lo Yuk-sui said a development proposal for the Sharp Island resort was awaiting government approval.

The 200,000 square foot resort site was acquired for HK$18 million in 1996 by Paliburg, which is the largest landlord on the island.

``We may consider designating a portion of land for residential use, but we will primarily develop the site into a tourism-oriented project,'' he said.

According to government planning, Sharp Island is earmarked to be turned to a ``large scale water sports and spa centre''.

Paliburg, which had intended to develop the resort on its own, said yesterday it would not rule out a strategic partnership.

``The entire development will cost at least HK$1 billion. I believe the proposed resort will attract many investors.'' Lo said.

``Actually some parties have already approached us and expressed interest.''

He refused to disclose details.

The group's hotel arm, Regal Hotels International Holdings, has been expanding in both the mainland and Hong Kong to capitalise on the boom in visitors that began in the second half of last year. Talks are under way regarding hotel asset acquisitions, Lo said, but declined to give any details.

The company's five hotels in the territory, which have 3,000 rooms, have had an average occupancy rate of 80 per cent.

Regal's luxury project, Regalia Bay in Stanley, is expected to rake in HK$3 billion when the remaining 50 homes are sold.

Meanwhile, Lo revealed that Century City's proposal for the restructuring of more than HK$1 billion in debt is in its final stages with the deadline looming at the end of the month.

``If creditors support the proposal, debt [of Century City] will be slashed to some HK$100 million,'' he said.

The group also aims to reduce the debts of Regal Hotels from HK$4 billion to between HK$2 billion and HK$3 billion, he added.

3. Crunch time on cultural project
Raymond Wang, The Standard 19 June 2004

All eyes are on today's tender deadline for the HK$24 billion West Kowloon cultural hub project, with at least three consortiums prepared to hand in development proposals.

A powerful consortium of Hong Kong's two largest developers, Cheung Kong (Holdings) and Sun Hung Kai Properties, is the frontrunner due to its financial clout.

Henderson Land Development is among those believed to have handed in a proposal, after raising HK$8 billion through a share placement and bond issue last year that analysts believe is to be used for the project.

Chairman Lee Shau-kee had said the company might make a sole bid.

With its war chest recently boosted to HK$11 billion, Sino Land will make a joint-venture bid, sources said.

In October, at least 11 companies or consortiums expressed interest in tendering for the 40-hectare project. But New World Development, which was among those that lodged a ``letter of intent'' for the project, recently decided its interest was misplaced.

Managing director Henry Cheng said the cultural component of the mega project is not part of the developer's expertise and that the government should handle that side of it and let the developers handle the residential part.

Cheng's view was shared by Hang Lung Properties and Great Eagle Holdings, with both saying they are not keen to bid for the tender.

MTR Corporation, which also expressed interest in the project last year, said it will not submit a proposal.

Sources said developers are asking for a plot ratio higher than the existing 1.81 times to maximise property development potential and reduce investment risk on the cultural component.

The project is expected to provide a profit margin of 15 per cent, analysts said.

The project's chosen design, by award-winning architect Norman Foster, allocates 39 per cent of the development site to arts and cultural use, 17 per cent for commerce such as offices, and 16 per cent for hotels and residential accommodation. The remaining 28 per cent has been designated for public space and utilities.

The government favours awarding the project to a single developer or large consortium, but small- and medium-sized developers want a slice of the mega project.

The West Kowloon development plan was unveiled in September. It aims to transform the prime waterfront site into a world-class cultural zone. The winning consortium will have the right to manage the area, twice the size of Tai Koo Shing, for 30 years.

Separately, Cheung Kong and Sun Hung Kai Properties' Kwok family are both shortlisted to bid in a new round of tenders on the King Yin Lei mansion on Stubbs Road.