Council 'wasted' $80m on stadium
THE Urban Council misspent almost $80 million of taxpayers' money on furnishing restaurants at the new Hong Kong Stadium, a councillor said yesterday.
Wong Siu-yee told the stadium's board of governors yesterday that the money - almost half the total $175 million cost of fitting it out - was contrary to usual Urban Council practice.
He said the funds paid for items such as standardised stoves, pipes and drainage, equipment which should have been supplied by the restaurant operators.
Mr Wong said the board's decision was tantamount to subsidising the restaurants, infringing the commercial principles the council had agreed.
But the Urban Council chairman and head of the board of governors, Dr Ronald Leung Ding-bong, said the actual sum spent on restaurants was only $15 million. The rest had gone on infrastructure.
Dr Leung said the council needed to furnish the restaurants to attract tenders.
He admitted the location of the stadium was a disadvantage to agents who wanted to run a business there.
Dr Leung said the operators did not need to pay the rent and were only required to give a certain percentage of turnover, ranging from eight to 25 per cent.
He refused to say whether the council was subsiding the restaurants and would not say whether the rates were high enough to cover the fitting-out cost.
''I have not gauged the figures but I think the board of governors has already got the best rate from the operators,'' he said.
He said councillors should look at the matter from a broader perspective and assured that the $175 million would be recovered from the stadium's profits.
Cost recovery was further guaranteed because Wembley International, the stadium's management firm, would not get $2 million in incentive fees if the stadium went into the red in the first year.
It would be required to resign if there was a loss for three consecutive years after the stadium opened.
The funding, reluctantly approved by Urban Councillors in November, attracted wide criticism because it was 50 per cent higher than the estimate.