More on WKCD - 19 Nov, 2004

A Cultural Icon ... or a Financial Blackhole?

… “This is not another property development project. It is about developing a new cultural icon for Hong Kong”. 3/9/03 Donald Tsang

Dear Subscribers & Friends

Last week we discussed the background to the West Kowloon Cultural Development (WKCD). This week, we want to provide some numbers. It is time that Hong Kong people demand transparency of the financial arrangements and revisit the rezoning process.

A. WKCD - Enormity of project

1. OZP: What development can take place in an area is governed by the Outline Zoning Plan (OZP) for that area. The making of such plans is by the Town Planning Board (TPB), a statutory body appointed by the government with the Planning Department as secretariat. OZP represents planning control for development.

… 2. Planning control: The WKCD is governed by the South West Kowloon OZP. There was originally 45.9 ha park areas intended for that site, which were zoned as “Open Space”. At one time, the permitted plot ratio would have resulted in land for commercial [408,000 sqm] and residential [82,500 sqm] usages of about 490,500 sqm. The plan also included a fire station with GFA 96,000 sqm.

… 3. Planning control removed: However, the government persuaded the TPB to change the plan to allow 78.81 ha for “OU” [Other Specified Uses] zoning, which in effect allows developers to have enormous flexibility. “OU” zoning effectively means no or little planning control. It was the backdoor to upping plot ratios. Some civic groups objected to the TPB before it took the decision [including yours truly] but to no avail.

… 4. No precedent: There is no precedent in Hong Kong and other countries with proper town planning procedures for such a large project to have “OU” zoning.

… 5. Tenders received: The 3 qualifying developers’ plot ratios are:

Henderson: 683,000 sqm
CKH/SHK : 976,000 sqm
Sino/Wharf+: 1.292million sqm

B. Financial Proposals - No transparency

1. Finances $$: As part of the tender, the developers had to submit financial proposals to the government. These proposals will likely contain things like land premiums [what the developer would pay the government], profit/revenue sharing on the development’s earnings with government; and any royalties involved to be paid to government].

2. Cyberport memories: There has never been any release of information about the financial arrangements between the government and the Cyberport developer. The financial proposals for WKCD are not being released for public scrutiny, and may never be released if Cyberport is an example of public accountability.

3. Public:Private anomalies: When the government deals with private developers in joint developments, there is little transparency of the financial arrangements but public sector projects, like the Science Park, do provide financial accounts! Read all about this at www.webb-site.com 24/10/04.

C. Civic call for transparency … don’t be lambs

1. Civic Campaign: … As civic groups think about what to do and how to do it, they can (a) revisit the precedent setting TPB decision to zone an enormous site to “OU” usage - it should never have been allowed and never to be repeated; and (b) help citizens to understand the importance of the financial arrangements, and not be “wow” by the PR of a cultural icon with management of museums by big names.

2. Call for capping profits: Government will NOT release the financial information using the excuse that its commercially sensitive. Civil society needs to tell the government what kind of arrangements it finds unacceptable. The people can call for capping of profits for example!

3. Call for audited accounts: Call for release of financial arrangements and audited accounts for Cyberport to improve accountability and call for the same with WKCD.

4. Have cake and eat it too: Another model for development is for the government to sell land and use the proceeds to finance cultural activates, including creating world-class museums if that is what Hong Kong should have.

CHRISTINE LOH
Civic Exchange - HK’s independent think tank