Land grant may help fund South Island Line
MTR to get aid for HK$7b project
The MTR Corporation may be granted development rights over valuable land in Wong Chuk Hang and Ocean Park to help pay for building the HK$7 billion first phase of its South Island Line, the government said yesterday, a day after Executive Councillors had given it the go-ahead.
The long-awaited line from Admiralty to South Horizons in Ap Lei Chau - which has been on the drawing board for more than a decade - would save the public 12 million hours of travelling a year, the Transport and Housing Bureau said.
It said the project would provide work for 20,000 people, including 2,100 needed to operate the line beginning in 2015.
A lawmaker and a surveyor warned the government to calculate its subsidy carefully, since the land the MTR Corp could be granted might be worth a lot more than the cost of building the line.
The MTR Corp could be granted development rights to land in Wong Chuk Hang and Ocean Park. One of the plots in question, on the Wong Chuk Hang public housing estate, will be the site of a station.
'The Wong Chuk Hang estate site would yield tens of billions of income in the future,' said legislator Lau Kong-wah, of the Democratic Alliance for the Betterment and Progress of Hong Kong. 'If all the proceeds go to the MTR Corporation, that will be excessive funding.'
Surveyor Pang Shiu-kee said the market value of the estate site alone was at least HK$25 billion.
'Although the MTR Corporation has to pay a land premium, it will be less than the site's true value as the government will not take into account the line's impact on property prices in calculating the premium. So the MTR could earn a profit when it resells the land to developers.'
The earnings would be on top of proceeds from property sales the MTR is entitled to share with the developers, Mr Pang added.
Secretary for Transport and Housing Eva Cheng Yu-wah said the government would decide how much it should pay when the MTR Corp submitted planning details, such as recommended property density and buildable areas. 'I believe the ultimate grant will be a fair sum,' she said.
Ms Cheng said some of the land over which the MTR Corp might be granted development rights would be reserved for public amenities. She also said environmental restrictions would limit the floor area of development on the sites. These factors would reduce the potential income to be earned from them.
MTR chief executive Chow Chung-kong said the line needed government funding because operating income would not cover the cost of its construction. The rail operator is projecting 170,000 trips a day will be made on the line by 2020.
According to a Legislative Council document, the number of potential users of the line's four stations - at Ocean Park, Wong Chuk Hang, Lei Tung and South Horizons - will be about 121,000 in 2016, just enough to meet the government's criteria for building a rail line.
But more traffic is likely to be generated by plans for the Southern District.
These include the HK$5.5 billion redevelopment of Ocean Park - which is expected to boost its visitor numbers from 4.9 million a year now to more than 7 million by 2022 - and a 'Fisherman's Wharf' development around Aberdeen harbour.
A second phase of the line would go from Wong Chuk Hang, via Aberdeen, Wah Fu and Cyberport, to University station on the soon-to-be-built West Island Line
Work and ride
Building the South Island Line will create jobs and boost transport
The number of people the government expects the project will employ, including permanent operating staff, is: 20,000