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1. ITC chief explains his rethink on buy offer

2. SAR team plans Macau bridge talks in Beijing

3. Housing merger a $26m pay-saver, but 25 top jobs go

4. Action urged to save heritage sites

5. 'Haunted' house steeped in history

6. Beijing to host talks on Macau bridge link plans

7. Gold Coast developer seeks $433m

8. Bridge backers on a misguided leap of faith to balance delta

1. ITC chief explains his rethink on buy offer
Anthony Tran, The Standard 29 October 2002

ITC Corporation chairman Charles Chan said he had only considered the market value of Paul Y-ITC Construction when he proposed to acquire the assets for himself through a reorganisation plan.

Chan would have paid HK$207.3 million cash for assets worth HK$2.107 billion under the plan.

However, due to fierce resistance and accusations that he was plundering shareholder value, Chan scrapped the proposal and linked up with ITC to offer 30 cents per share to Paul Y's shareholders.

Chan said yesterday it was unlikely that an acceptance of 90 per cent or more of Paul Y shareholders, excluding the 42.59 per cent stake owned by ITC, would trigger a compulsory privatisation of Paul Y.

Under Chan's October 7 asset reorganisation plan, the non-construction-related assets of Paul Y would be transferred to a subsidiary of Paul Y, which would then be acquired by Chan at 20 cents per share, representing a discount of 90.2 per cent to the net value of those assets, about HK$2.107 billion.

The assets included a 36.83 per cent stake in Australian-listed Downer EDI, a 14.55 per cent stake in Hong Kong-listed China Strategic Holdings, and properties with a book value of HK$884 million at the end of March.

``Some small investors are having difficulties selling their shares ... I was just offering an exit to them,'' Chan said.

Following fierce criticism, Chan decided to team up with ITC, of which he owns a 34.82 per cent stake, to propose the new offer. The general offer of 30 cents per share represents a 43 per cent premium over Paul Y's closing share price last Tuesday just before trading in the stock was suspended.

Chan also offered to finance the offer in full by advancing the funds to ITC on an unsecured basis.

He said if ITC's independent shareholders did not approve the share offer to Paul Y's shareholders at 30 cents per share, he would make the offer himself.

ITC Corporation executive director Ken Cheung said as the new share offer represented an 89.6 per cent discount to Paul Y's net asset value, which was HK$2.89 per share at March 31, the board of directors favoured the offer, especially with Chan's financial support.

Shares of Paul Y rose 33.33 per cent to 28 cents yesterday while ITC stock rose 26.32 per cent to 24 cents.

ITC is mainly engaged in investment and finance, and the sale of building materials and machinery. Paul Y is engaged in building and construction businesses.

2. SAR team plans Macau bridge talks in Beijing
Staff reporter, The Standard 29 October 2002

A Hong Kong government team is expected to travel to Beijing late next month to talk with officials about plans to build a controversial bridge linking the SAR with Macau and Zhuhai, the Beijing-backed Wen Wei Po reported yesterday.

The meeting between SAR officials and the State Planning Development Commission could lead to a go-ahead for the long-tabled project.

A final proposal is likely to be put forward by the Guangdong provincial government, the newspaper report said citing unnamed Hong Kong government sources.

Hong Kong, which until this year maintained the bridge was not needed, has come round to the idea on the back of rapid economic development in the Pearl River Delta - covering Dongguan, Zhuhai and Zhongshan cities in Guangdong province.

Of late, Hong Kong and the Guangdong cities have been strengthening ties to raise each other's competitiveness because of the looming threat from Shanghai and the Yangtze River Delta region.

The sources were quoted as saying construction of the 28-kilometre bridge - estimated to cost about HK$15 billion - could begin without taking into account the proposed building of a container terminal in Tai O in Lantau.

The bridge, which was only recently backed by Hong Kong's top officials, sparked off a war of words between two of the SAR's business leaders, Li Ka-shing and Gordon Wu.

Wu, chairman of Hopewell Holdings and the Port & Maritime Board, has lobbied for years for the building of the bridge.

Li has consistently opposed the project, raising concerns over suggestions Hopewell or other developers would be given land to develop container terminals, earnings from which would be used to build the bridge. He ''questioned the wisdom of using Hong Kong taxpayers' money to build the bridge''

3. Housing merger a $26m pay-saver, but 25 top jobs go
PATSY MOY, SCMP 29 October 2002

The posts of 25 senior employees, including five at directorate grade, will be axed next year as the Housing Bureau and Housing Department are merged, saving the government $26 million a year in salaries.

But Permanent Secretary for Housing Leung Chin-man said the "streamlining and re-engineering" was not part of the 1.8 per cent expenditure cut ordered by Financial Secretary

Antony Leung Kam-chung. This means the department will have to seek a further 1.8 per cent spending cut in the coming year.

"Today involves only the first phase of restructuring," he said. "We are going to have a second phase - a re-engineering at every level of the department."

At the end of June, the Housing Department had 11,800 staff while the bureau had 58.

Mr Leung said the merger was aimed at combining policy drafting and enactment under a single structure to avoid duplication.

Under the old structure, the Housing Bureau was headed by the secretary for housing and two deputies. The Housing Department was headed by the director for housing, with one deputy and six senior officials at directorate grades. Under the new structure, Mr Leung will head six deputies, who will be in charge of policy.

Deputy Secretary for Housing Planning and Lands Elaine Chung Lai-kwok will be responsible for housing strategies and the Deputy Secretary for Housing, Planning and Lands, Marco Wu Moon-hoi, will be in charge of business development.

After the restructuring, five posts at directorate grade and 20 senior staff of non-directorate grades will be removed through retirement and deployment to other government departments.

Mr Leung said the plan will be tabled at the Legislative Council on Monday and take effect on January 1.

The new housing chief also pledged the department would respond to public criticisms within 48 hours.

The Housing Department came under fire following a series of scandals involving public flats, including the short-piling cases at Home Ownership Scheme projects in Yuen Chau Kok in Sha Tin and a residential project above Tung Chung MTR Station. Those led to the resignation of the Housing Authority chairwoman Rosanna Wong Yick-ming in June 2000.

In the Yuen Chau Kok case, 21 of 36 piles in two of the blocks were found to be short of required length, while 11 rested on soft mud instead of bedrock. The two blocks were demolished in 2000 at a cost of $542 million.

In the Tung Chung case, an engineer responsible for supervising the foundations for the site in 1997 was jailed last Friday for three years and nine months for covering up a defective pile site after receiving free trips and entertainment from subcontractors. patsy.moy@scmp.com

4. Action urged to save heritage sites
ALEX LO, SCMP 29 October 2002

Dying breed: Despite years of debate to protect such historic structures as the Main Building of the University of Hong Kong in Pokfulam (pictured) and the Court of Final Appeal in Central, the government has failed to act. Picture by Garrige Ho

A heritage watchdog has demanded new planning laws to protect Hong Kong's old buildings, as a row escalates over the proposed demolition of Kom Tong Hall by its owner, the Mormon Church.

The need for an overhaul of town planning that would ensure protection of such buildings has been discussed for years, but the government has yet to take action, according to Wong Wah-sang, an associate professor at the University of Hong Kong's Department of Architecture.

Professor Wong, chairman of the heritage body Urban Watch, said the classification of historical buildings by the Antiquities and Monuments Office (AMO) offered no legal protection, while government planners only factored in short-term economic benefits without considering the long-term interests of the districts involved.

"The only effective protection is at the land policy and town planning levels, and the government has shown no direction and incentive," he said.

The 88-year-old three-storey Kom Tong Hall, built on a 9,000 sq ft site in Castle Road, has been owned by the Mormon Church since 1960. The Church submitted a demolition plan to the Buildings Department three months ago but has so far refused to disclose what it plans to build in its place.

It is one of only three or four such colonial-style buildings left in Hong Kong, according to Professor Wong. The others include the Court of Final Appeal in Central and the Main Hall at the University of Hong Kong in Pokfulam.

The AMO is opposed to Kom Tong Hall's destruction, and government officials are locked in negotiations with the Church for a compromise.

Central and Western District Council will address the issue in a meeting tomorrow. The Church's plan has also drawn fire from district residents, the Democratic Party and the Democratic Alliance for Betterment of Hong Kong (DAB).

In a statement yesterday, the Mormon Church said it was conducting discussions with the AMO, during which time it would not comment on the demolition plan. "Kom Tong Hall has been a special place for us, but it no longer meets our needs," it said.

Legislator Ip Kwok-him, vice-chairman of the DAB, said the Church was exploiting a loophole by refusing to disclose what it was planning to use the land for.

"If the Church is going to use the new building in its place for other purposes beside its current office and administration uses, it will have to ask for rezoning," he said. "So, as far as I can see, if they don't disclose their purpose, they are free to take down the building."

The chairman of the Tourism Board, legislator Selina Chow Liang Shuk-yee, asked in a Legco session yesterday why the government had failed to act for more than 10 years to protect such sites.

"Regarding the Kom Tong Hall issue, it is important for our tourism development to preserve heritage buildings," she said.

"Tourists are interested in our cultural heritage sites. I know [AMO] has been pressing the government to formulate a policy to protect heritage buildings for 10 years. But to date, there is no concrete result. I hope the government won't let things drag on."

In reply, the Secretary for Economic Development and Labour, Stephen Ip Shu-kwan, appeared non-committal. "This is a cross-bureau issue. We are now working closely together," he said.

The Planning Department said it had to balance the interests of different parties, and historical preservation was one of several factors to be considered.

The Hong Kong Japanese Tour Operators' Association has urged the government to preserve old sites, singling out the 12th-century Nga Tsin Wai Village in Kowloon City, for protection.

5. 'Haunted' house steeped in history
ALEX LO, SCMP 29 October 2002

A bloody history and a reputation for being haunted may be swept away if the demolition of Kom Tong Hall proceeds.

More than 1,000 people were believed to have died there after Japanese troops made the building their headquarters during World War II and used its basement for torture and interrogation.

According to the Web site of the University of Hong Kong's Department of Architecture: "The rest of the house was converted into offices for the Japanese troops. Even today, there are still rumours the house is haunted."

In 1914, the house was the first to be commissioned by a Chinese, at a time when locals were banned from living in Mid-Levels. Its first owner, Ho Kom-tong, who gave the building its name, had to obtain permission from the colonial government to build the home, and for his family to live there.

Like his older brother, tycoon Sir Robert Ho Tung, Ho Kom-tong became a successful businessman, with a character as colourful as his home's history.

An employee of Jardine, Matheson and Company, he reportedly liked to practise Chinese medicine on his friends and relatives, had more than an amateur interest in fung shui, and could sing many classical Chinese opera songs, which he performed at charity events. He was also an accomplished horticulturist.

He had 12 wives and fathered more than 30 children, most of whom lived in Kom Tong Hall. Despite his fung shui studies, he was not reluctant to move his family back into the house after the Japanese were defeated.

He died in 1950 but his family continued to live there until 1959, when the house was sold to the Cheng family. One year later, the Mormon Church bought it, then in 1990 it was declared a historic building.

6. Beijing to host talks on Macau bridge link plans
FELIX CHAN, SCMP 29 October 2002

Hong Kong officials will meet mainland planners in Beijing next month to study plans for a $15 billion bridge linking the SAR with Macau and Zhuhai.

The Environment, Transport and Works Bureau said yesterday a team of officials would travel to Beijing late next month to discuss the issue with the State Development Planning Commission.

A bureau spokesman said: "The team will be led by a principal assistant permanent secretary from the bureau and also include representatives from the Economic Development and Labour Bureau, Planning Department and Highways Department.

"It will only be a working-level meeting and is following up what the chief secretary has said at the end of the the Mainland-Hong Kong Conference on Co-ordination of Major Infrastructure Projects in Shanghai last month."

Secretary for Environment, Transport and Works Sara Liao Sau-tung said last Friday she aimed for consensus with the commission on the study.

The Beijing trip follows a visit by the commission's Transport Research Institute to Hong Kong last month to gather data and opinions on the plan.

The news came as the Wen Wei Po newspaper reported the link might not include a container terminal.

It also quoted sources as saying that as most of the link would be in Guangdong province, the province would lead the study. felix.chan@scmp.com

7. Gold Coast developer seeks $433m
MO PUI YEE, SCMP 29 October 2002

A developer is seeking more than $433 million from the government after its plan to expand the Gold Coast residential complex was scrapped because of public opposition.

Baynard Limited has filed a High Court writ against the secretary for justice, representing the government, seeking reimbursement of land and other costs.

The company alleges granting approval for it to develop the piece of land in Tuen Mun in 1996 and 1997 had been "unlawful" in the absence of consent of other owners of the lot.

The company is claiming a repayment of $433,340,000 in land cost and $250,000 in administrative fees.

The plan to build three more residential blocks had been strongly opposed by Gold Coast residents who worried sea views could be obscured.

8. Bridge backers on a misguided leap of faith to balance delta
TOM MITCHELL, SCMP 29 October 2002

When you work in Guangzhou and each day begins with a look at the Guangzhou Daily, the Southern Metropolis News and other local papers for important municipal, regional and provincial developments, it is easy to lose track of what is happening in Hong Kong, let alone your home country on the other side of the planet.

In mid-August, for example, I remember being vaguely aware that the Bush administration and the Republican Party were in the throes of an unseemly and uncharacteristically undisciplined public debate about whether or not to invade Iraq, while the rest of the country - and Democrats in particular - looked on with a mixture of bafflement and amusement.

So imagine my surprise when, arriving back in the United States just weeks later for a long vacation, I found pretty much the whole country dancing in synch to the beat of the war drums.

Iraq hawks in the Pentagon and the vice-president's office had won over popular and political opinion through sheer repetition of an unconvincing argument.

Only Democrats with war-hero credentials dared differ - and then only over the fine print. It was like living in a Kurt Vonnegut novel.

Yet if that was not weird enough, something similar was occurring back in Hong Kong - not over a war, of course, but over a bridge.

Before I left for the States, the issue of whether or not to build a bridge across the Pearl River Delta at its widest point had been a largely theoretical one pitting Hopewell Holdings chairman and chief proponent Gordon Wu Ying-sheung against Hutchison Whampoa managing director and lead sceptic Canning Fok Kin-ning.

Mr Wu's pet project had picked up some momentum at a conference on the Pearl River Delta sponsored by this newspaper in July, with Hong Kong Airport Authority chairman Victor Fung Kwok-king and other leading business figures voicing support for it.

But it was not until last month that a steady stream of senior government officials also began climbing on the bandwagon.

One of the most common refrains uttered by the bridge's backers is that the western half of the delta between Zhuhai and Foshan is a vacuum waiting to be filled.

There is no doubt the west delta's development has lagged behind that of the east delta, which is centred on Shenzhen, Dongguan and Huizhou.

The west delta, for example, accounts for just 19.6 per cent of the Pearl River Delta's population, 17.9 per cent of its gross domestic product and 10.5 per cent of its exports.

Build a bridge to the west delta, the argument goes, and this "imbalance" will be corrected. But while the cities of the west delta may trail their eastern counterparts in quantity categories such as those cited above, in qualitative measurements such as per-capita GDP or average income levels there is no marked difference between the two.

The west delta may not produce as much as the east, but its residents are just as well off.

Balancing the two sides of the delta is in many respects a scary prospect. Travellers venturing up the east delta between Shenzhen and Guangzhou are treated to a depressing blur of littered townships and factory wastelands.

What little agriculture and aquaculture that has survived takes the form of small plots and ponds squeezed between industrial establishments.

Most are tended by migrants living in tarpaper shacks.

In one particularly grim locale near the Dongguan-Guangzhou border, ageing cement plants dump soot and ash on nearby banana plantations.

On the other hand, a parallel journey down the west side of the delta, from Guangzhou to Zhuhai, reminds one of what the entire region used to look like.

The first third of this trip - through Guangzhou's southern Panyu district - is as blighted as any landscape in the east delta.

Imagine the opening sequence of the popular television drama The Sopranos, with its grim backdrop of industrialised northern New Jersey. That is rather what Guangzhou's tacky southern suburban sprawl looks like, albeit with a light rather than heavy industrial feel to it.

Carry on beyond Panyu into Zhongshan and Zhuhai, however, and the visual relief is immediate. The vista is one of large waterways and green fields tended by prosperous native villagers.

Under polluted skies and dotted with brick kilns and patches of urban sprawl, no one is going to confuse the west delta's surviving agricultural areas with Ireland.

But if there is any hope of preserving at least some of the Pearl River Delta's beautiful natural landscape, it lies in the west delta.

The Bush administration will probably get its war with Iraq.

So, too, it appears increasingly likely that Mr Wu and all the newcomers who climbed on to his bandwagon will get their bridge - and the west delta, some of them promise, will finally catch up with the east delta. God forbid.