The three plots include a 277,877 square foot residential site in Ma On Shan and two neighbouring commercial-residential lots in Fanling - a 86,080 sq ft lot and a 227,681 sq ft lot.

While the MTRC's Central project was estimated to cost $40 billion, the total land values for the three government sites were expected to exceed $5 billion.

The Central project has a developable floor area of 4.47 million sq ft and The project is to consist of three office towers, about 968,760 sq ft of retail space and two hotels with 1,200 rooms.

Analysts expected the Central site to draw strong bids from local and overseas companies. But it would probably not dampen bidding for the three government sites, which were mainly for residential development. The Central project was slated for commercial development.

Bidding for the tenders was expected to reflect developers' confidence in prospects for the local property market, which has been in the doldrums for the past 18 months.

Potential bidders for the Central project include a consortium formed by Sun Hung Kai Properties, Henderson Land Development and Hongkong & China Gas, a group led by Sino Land and Great Eagle Holdings, a coalition of Cheung Kong (Holdings) and Hutchison Whampoa, and a joint venture formed by Hysan Development, New World Development and Hang Lung Development.

The market also expected the territory's biggest landlord, Hongkong Land, to bid for the project.

Sino has expressed an interest in joint venture cash bidding for all three government sites.Sun Hung Kai Properties, a major holder of outstanding Letter B entitlements, said it was considering bidding for the sites.

Nan Fung Development said it was likely to bid for the Ma On Shan site.

However, Hang Lung Development said it would not submit tenders for the three sites because of their unfavourable location and the large flat supply in the region.

Some developers expected the accommodation value of the Ma On Shan site to be about $2,000 per sq ft.

Letter B holders, separately, did not have enough certificates to buy the plot of land on their own.

The government recently enlarged the size of the site by 30 per cent from its original lot size of 215,280 sq ft.

Developers bidding for the three sites were expected to pay in cash because Letter B holders preferred to exchange their certificates for land in Tseung Kwan O, where a higher developable area is allowed.

Because of Fanling's relatively low investment potential, bidding interest in the two sites was not expected to be strong and it was felt that prices would be lower than the current market rate.

Other likely bidders include Henderson Land and Chinachem Group, both of which are holders of Letter B entitlements. Chinachem has a relatively large property portfolio in the Fanling area.

Chung Seng Surveyors put a price tag of $2.77 billion on the Ma On Shan site, with the two lots in Fanling expected to sell for about $2.35 billion.

Pang Shiu-kee, director of S K Pang Surveyors & Co, said an abundant supply of new residential properties existed in both Fanling and Ma On Shan.

But he said they should attract respectable bidding interest as developers take advantage of the sluggish market conditions to buy land.

Developers have been acquiring land in recent land auctions and public tenders. Even Hongkong Land made its first appearance in public auctions in more than a decade in December when it bid for a luxury residential site in Stubbs Road.

Last month, consortiums of developers submitted tenders for the first phase of property development at the new airport railway's Kowloon station and the Land Development Corp's Wan Chai urban renewal project.