Rush of bids as car parks go for tender
HONGKONG'S captains of industry have unexpectedly submitted a rush of bids for the multi-million dollar contract to manage the Government's 14 car parks after tendering arrangements were changed to encourage more competition.
Some companies have cut their projected profit margins to the bone in a desperate attempt to secure the deal.
It has become one of the most secretive and competitive tenders in the territory.
In the past, the Government has been stung by accusations that market leader Wilson Parking has run a monopoly on the parks, and it wants that image to be changed when the results are announced on March 10.
Wilson has consistently won the contract since the 14 parks were farmed out for private management in 1984.
This year, the four-year contract has been divided into two groups of seven, but to one will be added the bonus of tunnel ticket distribution. Competitors can opt for either one or both.
It is still possible that one company, including Wilson, could win control of the whole package but Department of Transport (DoT) sources said this was unlikely.
''It's to encourage more tenderers. A company which can manage seven parks may not be able to take on 14.
''The scheme allows more competition as well as having the advantage that if a newcomer defaults on the contract another one will be there to step in.
''People are under the impression that Wilson has a monopoly but that's not necessarily so. They have made the most competitive bid every year.
''It's still possible that Wilson will get all 14, but we would like to see two different companies unless the financial offer is overriding,'' the source said.
Sunday Money can reveal that, should Wilson win the contract, it would apply to the Government in August to raise parking charges between nine and 10 per cent.
Under present agreements, contractors have to pay 87 per cent of revenue from the 14 car parks to the Government.
But in their attempts to win the contract, some bidders are said to have offered up to 95 per cent.
This has led to concern that the only way a management team could profit from such a thin margin would be to cut costs in such areas as security and personnel.
On Wednesday evening, at least three members of the Central Tender Board will examine the recommendations of DoT inspectors, who have already checked the figures of the competitors.
A second meeting the following week will make the final decision on who will manage 8,200 government parking spaces.
The Government's attempts to open up the market have led to a record number of applications, with up to 10 major corporations submitting bids.
All were reluctant to confirm they had entered the arena when contacted.
Mack and Company Car Park Management, which manages the Junk Bay and Shing Mun tunnels and is part of the Guardian group, sent all its executives away on leave as soon as it had completed its bid.
Wharf estates manager Mr David Poon said: ''This is a very sensitive time and we have been instructed not to reveal any information.'' A Wharf subsidiary has submitted a bid for all 14 car parks or either one of the seven.
First Pacific Davies is also among the big players - and equally reticent.
Managing director Mr Godfrey Blott said: ''I really can't comment on this.'' A few minutes later, Mr Michael Wood called from Headline PR. ''I can confirm that a branch of FPD has tendered for the car parks, but I can't say which one. It's very sensitive at the moment.'' Wilson's main competitor is Adams Parking International, which manages dozens of government car parks in housing estates.
The two companies have fought fierce battles in the past, but Adams was unusually tight-lipped over the present contract.
''We are unable to comment,'' said general manager Mr John Kissner.
Wilson is the only bidder prepared to talk openly about the deal, perhaps because it has the most to lose.
Managing Director Mr Paul Simpson was happy to talk on his car phone as he prepared to fly to the company's base in Australia.
''Our continued operation is not assured. It depends whether the Government wants someone it can trust and [who] provides a quality service,'' he said.
''The Government and the public seem happy with what we are doing.'' Prices in the car parks are set by the DoT.
Last year, Wilson made $280 million turnover from the 14 car parks.
The four prime sites in Central brought in most of the revenue.
New World Development and Hang Lung Development are also believed to be among the bidders, but could not be contacted for comment.