For example, construction work has been suspended at Sun Hung Kai Properties' (SHKP) Europa Garden phases two and three, next to the future Kwu Tung Station along Lok Ma Chau spur line.

An SHKP spokesman said the permitted 405,000-square foot residential project was pending because the developer was considering if the development potential could be boosted by the new town development.

A consortium led by Henderson Land and businessmen Stanley Ho Hung-sun and Henry Fok Ying-tung had also attempted to convert a 10.16-hectare site in Kwu Tung North into a 5.47 million sq ft residential project, but the proposal was rejected.

Ng Tak-wah, senior town planner with the Planning Department's Housing Task Force, said planning studies had been deferred due to further reassessment arising from the realignment of Lok Ma Chau spur line.

'We hope the studies could be finalised by the end of this year,' Mr Ng said.

He said the spur line, proposed by Kowloon-Canton Railway Corp and revised with a tunnel option, was scheduled to be completed by 2007, compared with the 2004 schedule for the original alignment.

The planned new towns Fanling North and Kwu Tung North in the northeast New Territories had been put on hold due to the realignment, he said.

Mr Ng believed the development density of the new towns planned in the initial stage would not be revised to a large extent.

Apart from Fanling North and Kwu Tung North, development for Hung Shui Kiu, another proposed new town in the northwest New Territories, would be delayed by the debate on the controversial Route 10 project, he said.

The Planning Department recently received a rezoning request for converting about 30 hectares of agricultural land in Ma Shi Po, Fanling North, to residential use. The application would be discussed by the Town Planning Board (TPB) next month.

Sources said New World Development and Henderson Land owned a substantial interest in the site, which also involved some government land.

'Its development potential is being clouded by the deferred [new town] planning studies,' one source said.

The initial planning study suggested the highest plot ratio would be five times for private residential development in Fanling North, subject to further engineering, transport and environmental reviews, a planning official said.

The official said the site held by New World and Henderson could justify a developable area of up to 16 million sq ft if the new town development proposals went ahead.

However, the official said the TPB at this stage would consider the application according to existing infrastructure and the development potential could be limited by the outline zoning plan.

Graphic: site19gwz