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1. Key role at cultural site

2. Sino Land to review breach of listing rule

3. Property fears hit plans for cruise ships

4. Cruise terminal plans challenged

5. charged over $22m housing project scams

6. Home sales soar 75pc for Cheung Kong

1. Key role at cultural site
Keith Wallis, The Standard 29 June 2004

Mott Connell has secured a key role in the development of the West Kowloon cultural district after being appointed technical consultant by the Territory Development Department.

The firm will advise the government on how the five bids submitted on Saturday address issues in five areas. These comprise wind engineering and microclimate underneath the canopy, design of the automated people mover system, building above the entrance to the Western Harbour Tunnel, building around ventilation and acoustics and stage engineering for the theatres complex.

Mott Connell's assessment will help the government rank the five bids from the most to the least favoured. Mott Connell will also advise during the negotiation phase with the preferred bidders.

The five bids were submitted by World City Culture Park, Sunny Development, Swire Properties, Dyamic Star International and Lam Sze-tat.

Mott Connell's contract will last until 2006. ``The firm will advise on technical areas where the government lacks the in-house skills,'' one source said.

Construction on the West Kowloon site will begin in April 2007 and the core arts and cultural facilities will come into operation in phases from 2011.

2. Sino Land to review breach of listing rule
Eli Lau, The Standard 29 June 2004

Sino Land and its parent company, Tsim Sha Tsui Properties, have set up a joint independent committee to review their failure to disclose a joint property project and other construction contracts with China Overseas group.

``The directors regret and take seriously any failure to comply with the listing rules,'' the companies said yesterday. ``A joint independent committee of the board has been established to conduct a comprehensive review of the current situation and steps are being taken to strengthen each company's compliance system.''

They said the stock exchange has indicated it reserves the right to take action against both companies under the listing rules.

The two developers, through their subsidiaries, formed a 50-50 joint venture in April to buy a site with a total gross floor area of 130,962 square-metres at Honey Lake, Shenzhen, for 950 million yuan (HK$895 million) for residential-commercial development, but failed to make a public disclosure of the connected transaction.

Similarly, Sino Land failed to disclose it had awarded nine construction contracts to China Overseas for property developments in Hong Kong since June 1990.

Sino Land said the directors were satisfied that all of the construction contracts and the Honey Lake acquisition were in the best interests of the group and shareholders.

Meanwhile, Sino Land has formed an 80-20 joint venture with China Overseas to acquire the land use rights of a Chengdu site bought at a public auction for about 1.2 billion yuan.

The property, with a gross floor area of 1.3 million square feet, will be developed for residential use, community service facilities, government facilities, and urban green zones. Approval is still pending from the municipal government of Chengdu.

China Overseas group vice-chairman and chief executive Kong Qingping yesterday revealed the investment cost for the Honey Lake and Chengdu projects are about 1.6 billion yuan and five billion yuan, respectively. The Honey Lake project is a high-end commercial-domestic development that will be ready for sale early next year. The five-phase Chengdu project is likely to begin its first batch sale early in 2006 if the project obtains government approval.

Apart from the two joint-venture projects with Sino Land, Kong said the company would also invest about 1.3 billion yuan to build a residential development in Suzhou with 220,000 sq metres of gross floor area. The units are due to go on sale by end-2005.

Kong spoke after yesterday's annual general meeting of China Overseas Land and Investment (COLI), the listed arm of the group.

Kong said the company hoped to complete its spin-off plan in November. Under the proposal, China Overseas Holdings (COH) and its listed subsidiary (COLI) plan to reorganise their operations by selling shares of their construction-related businesses in a proposed separate listing on the main board.

3. Property fears hit plans for cruise ships
Keith Wallis, The Standard 29 June 2004

Plans to invite bids from the private sector to develop a cruise terminal may become another property development in disguise, similar to Cyberport, legislators fear.

Instead, lawmakers, who support the concept of building the complex, said the government should build the facility.

Speaking at yesterday's meeting of the Legislative Council's economic services panel, Abraham Shek, who represents the real estate and construction sectors, said: ``Will it become a real estate project?''

Sin Chung-kai of the Democratic Party added, ``There's an element of property development in the project'' and questioned the level of income from cruise liners at Wharf (Holdings) Ocean Terminal compared with revenue from retail and hotel operators.

But Commissioner for Tourism Eva Cheng ruled out any move by the government to build the complex.

She pointed out that a site near the end of the runway at the former Kai Tak airport was initially proposed as a cruise liner terminal, but the Court of Final Appeal ruling on future harbour reclamation meant the government was reviewing the plans.

As a result the Tourism Commission would seek private sector bids towards the end of this year for the development of what could be a temporary facility.

She said a study suggested there were 30 locations in the SAR where a cruise terminal could be built including Kai Tak, North Point and Hung Hom.

She said: ``We feel southeast Kowloon [Kai Tak] is the best location, but there are a lot of uncertainties.''

These include whether the planned Kai Tak terminal complied with the Protection of the Harbour Ordinance and whether it would be approved by the Town Planning Board.

Cheng said it could take three years for there to be clear answers to these questions.

As the same time, a new terminal was needed as soon as possible to cope with demand from large cruise liners, some of which could not berth at Ocean Terminal.

Cheng added: ``We don't want Hong Kong to become a port of call. Instead we want to become a home port'' with ships and crews based in the SAR.

But Liberal Party legislator Kenneth Ting questioned whether firms would be prepared to invest in developing a cruise terminal away from Kai Tak while it remains the preferred location. He said it would ``be money down the drain'' if a firm spent billions of dollars developing a terminal elsewhere only to see a permanent facility built at Kai Tak.

Shek added: ``You want the market to tell you what to do, but the market wants a clear policy.''

4. Cruise terminal plans challenged
CARRIE CHAN, SCMP 29 June 2004

Plans for a new cruise terminal were challenged yesterday by legislators who said the Tourism Commission was following the West Kowloon Cultural District model - allowing a developer to subsidise the project with property development.

The accusation came after the commission said it would invite proposals from developers in the second half of the year for a terminal to be completed by 2009, and that about 30 possible sites would be offered.

The project is aimed at easing pressure on existing berthing facilities, accommodating huge cruise vessels that cannot berth at Ocean Terminal, and to develop Hong Kong as a home port.

At a meeting of the Legislative Council's economic services panel yesterday, lawmakers expressed concern that a private developer would use property development to finance the cruise terminal's operation.

Howard Young of the Liberal Party, representing the tourism industry, asked why the terminal could not be a public facility which did not charge high port fees.

Tourism Commissioner Eva Cheng Yu-wah said that the public-private partnership model was favoured so that government resources could be used in other facilities.

"Private companies have new technology. They are able to build a terminal faster than we can," she said.

5. charged over $22m housing project scams
LOUISA YAN, SCMP 29 June 2004

Five defendants facing 10 charges for their alleged roles in a $22 million scam involving Housing Authority projects appeared in Eastern Court yesterday.

They entered no pleas to the charges - four counts of conspiracy to defraud, two of conspiracy to deal and three of dealing with property known to represent proceeds of an indictable offence, and one count of attempted theft.

Magistrate David Thomas adjourned the case until September 28 and granted the defendants bail.

The defendants are George Kwok Shun-on, 44, and Ou Kai-chi, 41, formerly the managing director and financial controller respectively of listed company Shun Cheong Holdings; Wong Kwok-keung, 50, former warehouse supervisor of Shun Cheong Electrical Supplies (SCES); Chui Fu-tsang, 64, former director of Prelude Assets; and Chung Tao-fun, 64, former proprietor of Fu Cheong Engineering and Yue Fat Engineering.

Two of the charges concern allegations that Kwok and Ou conspired to defraud Shun Cheong Electrical Engineering (SCEE), Tinhawk and Shun Cheong M&E. Two other charges concern allegations Kwok and Wong conspired to defraud SCES.

Kwok, Ou and Wong are alleged to have falsely represented that Prelude Assets, Fu Cheong Engineering and Yue Fat Engineering had provided consultancy services to SCEE, Tinhawk and Shun Cheong M&E in relation to Housing Authority projects, inducing those companies to make payments of more than $2.2 million.

SCEE, Tinhawk, Shun Cheong M&E and SCES are all subsidiaries of Shun Cheong Holdings.

The alleged offences took place between October 1999 and March 2001.

6. Home sales soar 75pc for Cheung Kong
REUTERS in Singapore, SCMP 29 June 2004

Cheung Kong (Holdings) sold 3,500 apartments in Hong Kong in the first half, a 75 per cent jump over a year ago when the city was hit by the Sars epidemic, executive director Justin Chiu Kwok-hung said yesterday in Singapore.

The value of the sales was $11 billion and profit margins were higher than last year, Mr Chiu said.

He noted Cheung Kong was on track to meet its full-year sales target of 4,000 to 4,500 housing units, lower than the 6,000 units sold in the whole of last year due to a lack of stock.

"This year, I don't have that many to sell. Last year, we had leftover [stock] from previous years."

Mr Chiu remained bullish about the outlook for Hong Kong's residential market despite recent signs of slowing on concerns over interest-rate rise and mainland measures to cool its economy.

Hong Kong house prices have risen as much as 40 per cent since August last year, but property transactions fell 20.5 per cent last month, the second monthly slowdown after a nearly eight-month increase in activity.

"In the coming two months, I think prices will go down by 10 to 15 per cent ... and after that, prices will go back again," Mr Chiu said. "For the whole year, we could be looking at around 20 to 30 per cent [increase in prices]."