Profits 'will pay for stadium'
By SO LAI-FUN
TAXPAYERS' controversial $175 million payment towards the fitting-out of the new Hong Kong Stadium will be recovered from the stadium's profits, Urban Council Chairman Dr Ronald Leung Ding-bong said.
The funding, reluctantly approved by Urban Councillors in November, attracted wide criticism because it was 50 per cent higher than the estimate.
Dr Leung, who also heads the stadium's board of governors, said it was highly unlikely that the stadium, managed by Wembley International, would go into deficit.
The board was set up to supervise Wembley International's management and comprises representatives from the Urban Council and Wembley.
Dr Leung said Wembley would be required to resign if there was a loss for three consecutive years after the stadium opened.
''I think the management will try its best to run the business rather than risk ruining its name,'' he said.
Dr Leung said the company would not obtain incentive fees specified in the contract if it went into the red in the first year.
He estimated that there would be a surplus of more than $10 million in the first year, less than one-tenth of the $175 million funding.
But he said the profit would grow as the stadium attracted more events and continued to improve in its management. The management would not, however, pay interest.
Thirty events had been booked for the first three months from the opening on March 11, he said.
All the 50 VIP suites had been booked, guaranteeing a fixed revenue of $35 million. Steady revenue would come from fringe businesses such as sales of souvenirs, and the contracts for food stalls and restaurants.
A spokesman for Wembley said the company hoped to get an average of 50 events per year over a two or three-year period, he said.
Urban Councillors have been assured the $175 million would be reimbursed within six years of the opening.