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1. Construction firm's profit soars 235pc

2. Developers keen to see land reserve list

3. How rush for Disney site cost us $440m

4. Rights plea in harbour case

5. Government budget cut dims outlook for construction sector

6. CFA hearing on Town Planning Board's appeal concluded

7. Town Planning Board maintains West Kowloon Cultural District zoning

8. Draft OZP involving proposed reclamation referred back for more consideration

9. West Rail to Open on 20 December 2003

10. Culture hub plot ratios to stay

1. Construction firm's profit soars 235pc
Nicole Kwok, The Standard 12 December 2003

Construction company Vantage International's interim net profit soared 235 per cent to HK$20.196 million, boosted by the completion of major projects and new contracts.

Turnover rose 208 per cent to HK$677.89 million for the six months to the end of September.

The company, which specialises in school building projects, completed five major contracts in the first half.

Chairman Ngai Chun-hung said Vantage had also secured contracts valued at HK$381 million, including construction projects at schools, district open spaces and duct works. The total value and outstanding value of substantial contracts on hand was about HK$3.15 billion and HK$1.92 billion respectively at the end of September.

Ngai predicted business could maintain the same growth pace in the second half because it had about HK$500 million worth of contracts on hand. He said Vantage expected difficult market conditions in the construction industry to continue and planned to diversify into the mainland.

``We are currently in talks with some large-scale construction groups in the mainland on possible co-operation on various work for the Beijing Olympics and also some construction in other major cities,'' Ngai said.

Vantage's bank balance and cash on hand was HK$45.97 million at the end of September, up 66 per cent from the end of March.

Shares of Vantage rose 4 per cent to close at HK$0.51 yesterday.

2. Developers keen to see land reserve list
Raymond Wang, The Standard 12 December 2003

An increasing number of developers including Cheung Kong (Holdings) and Hang Lung Properties have expressed interest in drawing land from the reserve list when the government resumes land sales through the application list next month.

Hang Lung Properties chairman Ronnie Chan said the company was interested in drawing land from the list, but would wait to see government details of the lots available.

``However, it is not our current strategy to bid for high-density lots in the New Territories and Tseung Kwan O,'' he said.

Henderson Land Development chairman Lee Shau-kee last week urged the government not to sell land in areas that had an oversupply of unsold flats such as Tseung Kwan O and West Kowloon. Lee suggested the government launch more ``low-density land''.

Kerry Properties said this week that it was interested in bidding for luxury residential lots in Mid-Levels and Hong Kong South.

Cheung Kong deputy chairman and managing director Victor Li, however, said the government should release a variety of lots to meet different demands.

Li said the outlook was still positive for the property market following signs of a rebound in recent months.

Separately, Li said the company's sponsorship of the 2004 Hong Kong Arts Festival was in no way related to its planned bid for the HK$24 billion West Kowloon Cultural hub project.

He said the company was invited by Charles Lee, chairman of both Hong Kong Exchanges and Clearing and the Hong Kong Arts Fstival Society, to sponsor the event.

Shares of Cheung Kong rose 4.18 per cent to close at HK$62.25 yesterday, while Hang Lung Properties rose 1.53 per cent to close at HK$9.95.

3. How rush for Disney site cost us $440m
Cannix Yau, The Standard 12 December 2003

Director of Lands Patrick Lau has admitted the department was so desperate to acquire the Penny Bay's shipyard site for the Disneyland project that it did not include an indemnity clause in the site surrender contract, resulting in HK$440 million of public money being used to decontaminate the site.

Lau said yesterday had the department insisted on including the indemnity clause in the contract, he believed the shipyard operator would have refused to surrender the Lantau site to the government voluntarily.

He added the decision was made by then Director of Lands Robert Pope without seeking higher level approval despite consultants' warnings that contamination at the site was more serious than expected.

Lau made the admission at a meeting of the Legislative Council's Public Accounts Committee scrutinising the latest Director of Audit report that criticised relevant departments for failing to recover decontamination costs amounting to HK$504.5 million from shipyard operators at Penny's Bay and Tsing Yi north in 2001 and 1997 respectively.

The report also urged Lau to recover the cost if the tenants were found to be responsible for clearing up the contaminated sites.

In reply, Lau said yesterday they were seeking legal advice from the Department of Justice on whether they had legal grounds to recover the cost and a decision was expected this month.

In April 2001, the Department of Lands acquired the Penny Bay's shipyard site under an ``as is'' basis while the shipyard operator received compensation of HK$1.5 billion.

Eventually the site was found to be highly contaminated with dioxins and it cost the government HK$440 million to decontaminate it, compared with the original proposed cost of HK$22 million.

In response to a question from Lau Kong-wah, of the Democratic Alliance for Betterment of Hong Kong as to why the government rushed into accepting the ``as is'' surrender clause, Lau said the government needed to expedite the site's acquisition for construction of the Disney theme park due to open in 2005.

``We had to finish the theme park project as soon as possible. We couldn't start the project unless we acquired the land.''

But Lau Kong-wah questioned whether the government needed to proceed with the project ``at all costs'' without regard for public money.

``Is this price too huge? Was it unavoidable? Why didn't you include an indemnity clause?'' he asked.

But Patrick Lau said if the department had imposed an indemnity clause he believed the shipyard operator would not have returned the site voluntarily.

But he added the decision was made by the then director of lands and he had no idea whether Pope had requested the operators clean up the site first.

Emily Lau, of The Frontier, also questioned whether the Civil Engineering Department was negligent in probing the level of contamination at the site despite various warnings from consultants and green groups.

However, Director of Civil Engineering Tsao Tak-kiang insisted there were no signs that the site was highly contaminated with dioxins.

``We had requested the operator allow us to conduct an in-depth investigation on the site. But we were rejected and were only allowed a preliminary site investigation which was unable to detect the level of dioxins,'' he said.

Tsao added there was no evidence to suspect that the operator disposed of waste illegally so they could not invoke other laws to conduct further investigations at the site.

Meanwhile, the government was also criticised for failing to enforce demolition provisions in 15 tenancy contracts at six leased shipyard sites at Tsing Yi north and Kwai Tsing resulting in the government having to pay HK$70 million for clearing and decontaminating the sites.

The tenancy contracts stipulated tenants were responsible for clearing structures and prohibiting contamination on termination of their contracts.

But Patrick Lau explained since the government met with strong opposition from operators during the course of the acquisition, the cost and the waste of time would be even bigger if the government took legal action.

``The government would have to take legal action to force them to surrender and clear up the sites. But the cost and the time spent would have been bigger and longer than asking them to do it themselves. Because of this reason, we thought it was better for us to undertake the work,'' he said.

He added it was useless for the government to reserve the right to recover the cost because the tenant could disappear very quickly.

But Emily Lau voiced concern that this practice would send a very bad message that tenants could be exempt from such provisions if they raised strong opposition.

Patrick Lau said the department would review the practice to see whether changes were necessary.

4. Rights plea in harbour case
Paris Lord, The Standard 12 December 2003

A Court of First Instance judge was not making law when she ruled against the Wan Chai reclamation project of the Town Planning Board (TPB), a court has heard.

Instead, Madam Justice Carlye Chu was looking at how the public's right to the harbour could be explained internationally by using court judgments from other countries, Society for the Protection of the Harbour senior counsel Anthony Neoh told the Court of Final Appeal yesterday.

The TPB is appealing against a July verdict where Justice Chu found in favour of the society and ruled out the government's second phase of the Wan Chai reclamation.

She also quashed the TPB's approval of its draft outline zoning plan for Wan Chai north and told the body to reconsider it.

The TPB must pass three tests before future reclamation, Justice Chu ruled.

These were: Having a compelling, overriding and present need; no viable alternative; minimum impairment.

Presenting his opening submission on the third day of the hearing, Neoh said his client had estimated about 3,000 hectares, or roughly half the original harbour, had been reclaimed by 1997 when the Protection of the Harbour Ordinance was enacted.

Neoh asked the court's full-bench to consider that the harbour was an ``inter-generational right'' of the Hong Kong people, and that the TPB erred in law by not observing section 3 of the ordinance.

Section 3.1 states the harbour ``is to be protected and preserved as a special public asset and a natural heritage of Hong Kong people, and for that purpose there shall be a presumption against reclamation''.

Section 3.2 states that all public officers and public bodies ``shall have regard to the principle stated in subsection one for guidance in any exercise of powers vested in them''.

Preserving and protecting the harbour was therefore a ``human right'' held by the whole community, Neoh said.

Calling the harbour a ``community asset'', he said in all of the TPB documents, it was referred to as a ``natural heritage'' and never as a ``special public asset''.

He read extracts from several international judgments from Canada and the United States, saying they helped to explain that the meaning of ``special public asset and a natural heritage'' meant something for the community to enjoy.

Justice Kemal Bokhary said while Justice Chu ruled there were four tests - the fourth being that the earlier tests ``should be demonstrated by clear, persuasive, cogent and objective evidence'' - there was really a single test.

If the first test of ``need'' could be established, the remaining three followed, Justice Bokhary said.

The hearing continues.

5. Government budget cut dims outlook for construction sector
DENISE TSANG, SCMP 12 December 2003

The construction sector will contract further in the coming year as the government puts the brakes on infrastructure spending, an industry player says.

The poor property market led to the contraction, but it had been hit further by the administration's decision to tighten its budget on infrastructure investments, Vantage International (Holdings) chairman Ngai Chun-hung said.

However, construction firms should look to the mainland, where the 2008 Olympic Games and a growing number of water and sewage projects would spur business opportunities, Mr Ngai said yesterday.

"We are pessimistic about the future of the construction sector [in Hong Kong]," he said.

"As long as the government continues to withhold infrastructure projects and the property market continues to be weak, the construction sector will shrink further."

Mr Ngai was speaking after Vantage revealed a sharp jump in net profit to $20.19 million for the six months to September from $6.03 million a year earlier.

The profit surge was attributed to the completion of most of its projects obtained last year.

During the period, Vantage obtained $332 million of contracts, largely for school-related work. Mr Ngai said these contracts were due for completion in 2005.

He was confident the company's gross profit margin could be maintained at about 5 per cent by keeping costs low.

Over the long term, Mr Ngai said Vantage, which mainly provides construction services to the government, was seeking to expand in the mainland.

"We are looking for projects related to water sewage, road works and water supplies," he said.

Earnings per share were 2.391 cents, compared with 0.714 cent in the previous period.

The company has recommended an interim dividend of 0.5 cent a share.

6. CFA hearing on Town Planning Board's appeal concluded
Hong Kong Government, 12 December 2003

The Court of Final Appeal hearing on the Town Planning Board's (the Board) appeal against the High Court's decision with respect to the Draft Wan Chai North Outline Zoning Plan (OZP) was concluded today (December 12).

It is not the Board's intention to save the Wan Chai North reclamation plan in total. The Board has already decided not to pursue the Harbour Park, and has requested the Government to conduct a comprehensive planning and engineering review on Wan Chai Development Phase II and to draw up a minimum reclamation option that would comply with the law.

The reason why the Board appealed against the High Court judgment was to seek a clarification of the legal principles behind the Protection of the Harbour Ordinance in view of the Court's highly restrictive interpretation which could have far-reaching implications on future planning and development of the harbourfront areas.

"The Board wishes to bring the Harbour to the people of Hong Kong by providing a well-planned, accessible and vibrant waterfront. This is the vision of the Board", a spokesman of the Board said.

The Board's Vision Statement for Victoria Harbour was published in 1999 to meet public aspirations for protecting and preserving the Harbour.

7. Town Planning Board maintains West Kowloon Cultural District zoning
Hong Kong Government, 12 December 2003

The Town Planning Board today (December 12) considered the objections to the amendments of the draft South West Kowloon Outline Zoning Plan in relation to the West Kowloon Cultural District and decided to uphold the amendments.

The Town Planning Board has received 11 objections since the area earmarked for the cultural district was rezoned to 'Other Specified Uses' ('OU') annotated 'Arts, Cultural, Commercial and Entertainment Uses' on July 11, 2003.

Ten of the objections relate to the planning and development issues of the cultural district project. The main concerns of the objectors are on the appropriateness of the 'OU' zoning; the planning control for the district; the role of the Board in the development process of the project; and the impacts on nearby developments.

After careful consideration of the objections, the Board decided that there was no need to propose any amendment to the Plan as the concerns of the objectors had been addressed.

"Members are of the view that as the planning intention is to facilitate the development of the site into an integrated arts and cultural district together with other commercial and supporting facilities, the rezoning of the district to 'OU' annotated 'Arts, Cultural, Commercial and Entertainment Uses' is appropriate," a spokesman for the Town Planning Board said.

Given the scale, nature and development time span of the area, the OU zoning is needed to allow a greater degree of design flexibility for the proponents to come up with the best proposal. Such zoning has been adopted before as in the case of the development of the new airport at Chek Lap Kok, the industrial estates and the container terminal, he said.

The Board was satisfied that since the majority development in the district would be covered by the distinctive canopy, thereby limiting the building height, development intensity and overall built-form of the district would be under effective control. In addition, the same amount of open space originally proposed in the previous version of the Plan will be provided in the development of the cultural district.

As far as impacts on surrounding developments are concerned, the Board was satisfied that the project proponent is required to carry out detailed technical assessments to ensure that the project will be sustainable in traffic, environmental and infrastructure terms.

In deciding on the 'OU' zoning, the Board had the clear commitment from the Government that the Board would be consulted at various stages of the selection of a preferred development scheme. The Board also noted that the Government had repeatedly re-affirmed such an undertaking at Legislative Council (Legco) meetings and in public recently.

The Board noted that members of the public could give their views as Legco would be consulted on the preferred development scheme, before its final approval by the Chief Executive in Council. To enhance consensus building within the community, the Board urged the Government to consult the public at every key stage of the selection process. This would in effect allow maximum public scrutiny of the process before the Agreement for the project was finalised.

"The Board wishes to adopt a two-stage approach for the planning of the cultural district. The first stage is to clearly reflect the planning intention of developing the site into an integrated arts and cultural district, and in this regard, the Board agreed that the 'OU' zoning would be sufficient for the purpose.

"Once the preferred development scheme is agreed upon, it is the intention of the Board to incorporate the development parameters of the agreed scheme, such as the total gross floor area (GFA), the plot ratio and maximum building height, etc, into the Plan for public inspection and comment. In doing so, any subsequent changes to the stipulated development parameters will require the approval of the Board," the spokesman explained.

The spokesman added that the Board agreed to explain clearly the two-stage approach in the Explanatory Statement of the Plan.

8. Draft OZP involving proposed reclamation referred back for more consideration
Hong Kong Government, 12 December 2003

The Chief Executive in Council has referred the draft Cha Kwo Ling, Yau Tong, Lei Yue Mun Outline Zoning Plan (OZP) to the Town Planning Board for further consideration.

The draft OZP involves a proposed reclamation at Yau Tong Bay which is subject to the presumption against reclamation in the Protection of the Harbour Ordinance.

"The board will ensure that the reclamation proposed in the draft OZP complies with the ordinance", a spokesman for the board said.

9. West Rail to Open on 20 December 2003
KCRC Press Release, 12 December 2003

The Managing Board of the Kowloon-Canton Railway Corporation has approved a proposal by management that West Rail should open for passenger services from 20 December 2003.

Announcing this today (Friday), the Chairman of the Corporation, Mr Michael Tien, said this decision followed the completion of six weeks’ fault-free trial operations, during which average daily punctuality reached 99 per cent while average daily service delivery reached 99.6 per cent.

“This was well above the minimum criteria of 95 per cent punctuality and 97.5 per cent service delivery.

“All statutory inspections have been completed. The Chief Inspector of Railways has also advised that West Rail is in a safe and sound condition for passenger operations,” he said.

Mr Tien said an opening ceremony will be held at 10:00 am on 20 December at the Kam Sheung Road Station. The railway will start passenger services at 2:00 pm on the same day.

Before the official opening, the Corporation would set aside two days for trial rides by members of the public to familiarise them with the various features of the system.

These trial rides will be held on 17 December from 10:00 am to 12:45 am the following day, and on 18 December from 5:45 am to 12:45 am the following day.

There will be no train service on 19 December when the railway will be closed for final preparations for its opening on the following day.

“A flat fare of $15 for adults and $7.5 for children and senior citizens will be charged for all journeys during the trial rides. There will be no time limit and passengers will be able to alight at and visit any station they wish as long as they do not go through the exit gates.

“All proceeds will be donated to charity,” he added.

Meanwhile, a new Transport Division, which consolidates all transport operations of the Corporation including West Rail, Light Rail, Bus, East Rail and the future East Rail Extensions, has come into operation with effect from today.

Mr Y T Li, Director, East Rail, has taken up his appointment as Acting Senior Director, Transport; while Mr Jonathan Yu, Director, Light Rail, has become Director of Operations of the new division.

10. Culture hub plot ratios to stay
Eli Lau, The Standard 12 December 2003

The Town Planning Board has decided to leave plot ratio restrictions covering the West Kowloon district culture hub project in place until the tender for the development is awarded.

The board reaffirmed its position yesterday after a total of 11 objections were submitted on the amendments of the draft South West Kowloon outline zoning plan covering the cultural hub.

Most of the objections opposed re-zoning the 40-hectare site for the mega cultural hub project from the previous ``specific uses'' to ``other specified uses'' annotated ``arts, cultural, commercial and entertainment uses''.

Any amendment to the restrictions may have opened the door to removing limits on height and floor area development by developers.

After meeting to consider the objections for the HK$24 billion mega culture hub site, a spokesman for the board said it had decided to uphold the amendment.

The board was satisfied that since most development in the district would be covered by the distinctive canopy envisioned by architect Norman Foster, thereby limiting the building height, development intensity and overall built-form of the district would be under effective control, he said.

Small to mid-sized developers have been lobbying the government to split the project among a number of developers rather than award it to a single developer or consortium. The arts community is also concerned about the development, and has expressed worries that it may become dominated by commercial development. Last month, representatives of Project Hong Kong led by Ma Ka-fai, well-known local directors Tsui Hark and Gordon Chan met Chief Secretary for Administration Donald Tsang to express opinions over the project.

Under the selected design, by Norman Foster and partners, 39 per cent of 695,000 square metres of the site would be designated for arts and culture, while 17 per cent would be developed into commercial/office space and 16 per cent hotel/residential uses.

``Once the preferred development scheme is agreed upon, it is the intention of the board to incorporate the development parameters of the agreed scheme, such as the total gross floor area, the plot ratio and maximum building height, etc, into the plan for public inspection and comment,'' the board said a statement.

Eleven consortiums had expressed interest in the project before the submission process was extended by three months in November.

The board spokesman said the zoning amendment could allow greater flexibility.

``Such zoning has been adopted before as in the case of the development of the new airport at Chek Lap Kok, the industrial estates and the container terminal.''