Sun Hung Kai Properties

Profits from Ma Wan Park will go to government, parties agree

PUBLISHED : Friday, 18 July, 2008, 12:00am
UPDATED : Friday, 18 July, 2008, 12:00am

Sun Hung Kai Properties will have to give the government any profits generated from its Ma Wan Park under a 1997 agreement, according to an understanding reached between the parties and announced yesterday.

The park may also be returned to the government when the 21-year lease ends.

'Sun Hung Kai Properties has pledged that the Ma Wan Park is in essence a community project and will not generate any commercial gain for the company,' a Development Bureau spokesman said.

A fund will be set up for the maintenance, repair and promotion of the park. Every seven years, any profits from the park will be credited to the fund after deducting reasonable operating costs. Losses will be shouldered by Sun Hung Kai. The fund's balance will be returned to the government after 21 years.

In addition, the government will be paid any unused portion of the construction cost for the first phase of the park plus interest once work is finished. A Sun Hung Kai spokesman said no figure on any unused construction cost was available.

As of June, the budget for phase one was estimated to be HK$700 million with accrued interest at more than HK$400 million. The first phase was originally slated for completion by June 2006 and this has now been extended to the end of this year due to changes in the master plan. There is no timeline for the start of phase two, which will recreate a traditional Ma Wan fishing village.

The plans for phase one were changed from an amusement park with a large number of rides to a natural garden after Hong Kong Disneyland was announced. The changes also involved revising a road scheme, which is being finalised.

According to a deal between Sun Hung Kai and the government in 1997, the developer surrendered a 9.5-hectare agricultural and building lot in exchange for 12.65 hectares of government land to build the Park Island residential project on Ma Wan Island, off northeast Lantau. The developer also agreed to pay the market value land premium and to build and operate the HK$1 billion park.

The park is being built in phases. The first includes the Nature Garden, Noah's Ark and Solar Tower. The Nature Garden opened last July. Noah's Ark, a multimedia attraction, is expected to be completed by the end of the year. The Solar Tower, which focuses on Chinese astronomy and solar energy, will be finished two years after the road scheme is approved.