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1. Demand to release Tamar soil report

2. Nan Fung acquires Dream City stake for $678m

3. Residents seek rezoning of station site

1. Demand to release Tamar soil report
CHLOE LAI , SCMP 10 June 2006

Legislators will demand that the government release a full report on its testing of soil samples taken at the Tamar site after a disputed claim by an environmentalist that the soil contains dioxin, a highly toxic chemical.

Members of the planning, lands and works panel want to check the report before deciding whether to hold a special meeting on the issue before the government's $5.1 billion funding request for its planned Tamar headquarters goes to the Legislative Council's finance committee on June 23.

Environmentalist Wan Shek-luen has claimed the site is highly contaminated with dioxin from its previous role as a British military dockyard. Dioxin can cause cancer and birth defects.

The government has denied Mr Wan's claim, saying there is no evidence to substantiate it. But it did not say whether the analysis of the soil included tests for dioxin.

A majority of the legislators speaking at the panel meeting yesterday agreed that the government should release the report.

But supporters of the headquarters plan said there was no need for a special meeting on the issue, saying that the possibility of dioxin at the site should not affect the finance committee's deliberations.

Liberal Party chairman James Tien Pei-chun said: "We need to follow up [on the dioxin claim]. But it is a separate issue. We can deal with it later. The meeting does not have to be before the 23rd."

Raymond Ho Chung-tai of the Alliance said: "We have the know-how to decontaminate dioxin. I see no reason why we need to put the project on hold."

Civic Party legislator Alan Leong Kah-kit and independent legislator Kwok Ka-ki, however, insisted on a special meeting.

A compromise was reached after some 30 minutes of heated debate.

They agreed that if the majority of lawmakers found the government report unconvincing, a special meeting would be held on June 19.

The government can expect a landslide victory in its request for funding as the Democratic Party, the Democratic Alliance for the Betterment and Progress of Hong Kong, the Liberal Party and the Alliance have pledged to back the project.

Meanwhile, Mr Wan said he was willing to testify at Legco if invited.

He urged the government to conduct a detailed soil investigation before starting the project.

This was echoed by Jonathan Wong Woon-chung of Baptist University , who conducted an independent study on dioxin at Cheoy Lee Shipyard in 2003.

"It is natural that a military dockyard left dioxin in the soil, though the level may not be high. The government should find out what the level of dioxin is at the site," he said.

He said although the government had tested the soil at Tamar, its guidelines on testing contaminated soil excluded dioxin.

2. Nan Fung acquires Dream City stake for $678m
FOSTER WONG, SCMP 10 June 2006

Cheung Kong (Holdings) has sold a 15 per cent stake in its mega residential-retail project Dream City phase two in Tseung Kwan O to privately held Nan Fung Development for $678 million, the company said yesterday.

"The group and Nan Fung have worked together on other projects and the board considers that the previous experience of working together successfully made Nan Fung a suitable partner for undertaking the development," Cheung Kong said.

Dream City phase two is one of a maximum of 14 phases to be developed over the next 10 years at MTR Corp's future Tseung Kwan O South Station site.

Cheung Kong beat four other developers in January to win the contract offered by the subway operator.

It was the second tender Cheung Kong has won in the Dream City development, making it one of Tseung Kwan O's biggest landlords. The company is also developing the Metro Town project at Tiu Keng Leng Station with Nan Fung.

Under the deal, the blue-chip developer sold the entire stake of its subsidiary Neko International, which holds a 15 per cent shareholding in Rivet Profits, for US$1 to Nan Fung.

The only principal asset of Rivet Profits, 85 per cent held by Cheung Kong, is the Tseung Kwan O project via a unit called Rich Asia.

Nan Fung, in the meantime, will pay $678 million to Cheung Kong through Rich Asia as part of its consideration for its indirect 15 per cent stake in the project.

The developer said yesterday Rich Asia had already paid the government land premium together with $410 million to MTR for the costs incurred in the development site.

MTR will provide an interest-free loan of $4 billion for the developer.

The phase two project is expected to cost the developer up to $15 billion, which will command a land premium of about $8.06 billion, or $2,417 per square foot - 56 per cent higher than the $1,546 per square foot charged for the first phase.

Under its building plan, Cheung Kong intends to build 10 blocks in Dream City 's second stage providing about 4,300 flats with a floor area of 3.33 million square feet by 2010. This compares with the planned 2,096 flats in five blocks with a total floor area of 1.5 million square feet in phase one.

Shares of Cheung Kong closed up 0.24 per cent at $82.30 yesterday.

3. Residents seek rezoning of station site
YVONNE LIU , SCMP 10 June 2006

Residents of Sun Yuen Long Centre have submitted an application to rezone the land at West Rail Yuen Long Station as open space in a bid to force the government to abandon its controversial $3.46 billion commercial-residential development.

About 30 residents of Sun Yuen Long Centre - adjacent to the proposed development - submitted the application, complaining that the government plan to develop the 401,282 square foot site would cause air pollution and block views. They also fear that building work could put the foundations of their own properties at risk.

The Town Planning board, which has approved the site for development, will consider the application within two months.

Meanwhile, the project - which will comprise nine residential towers on a retail podium, providing 2,214 units with a total gross floor area of 1.73 million square feet - has been scheduled for tender this year.

The government has appointed the Kowloon-Canton Railway Corp to handle the tender of the site. "We have received many objections from nearby residents about the project and we have decided to suspend the tender of the project until the government makes a decision," said a KCRC spokeswoman.

"As the site is owned by the government, we would not be in a position to lose out even if the government cancelled the development."

Leung Che-cheung, the vice-chairman of Yuen Long District Council, said the council was backing the move to have the site declared open space.

"But the Legislative Council has a different opinion and has suggested the government minimise the scale of the development," he said.

Property agents estimate the average price at Sun Yuen Long Centre was $2,500 per square foot, a fall of 3.84 per cent since the beginning of the year.

"Despite the average price of nearby estates being about $2,500 per square foot, the site was valued at $3.46 billion, or $2,000 per square foot," said Savills director Charles Chan Chiu-kwok.

"Due to strong demand of the new development, apartment prices may fetch $3,000 to $4,000 per square foot after completion," he said.