Legco backs finance package for Disneyland expansion
The Legislative Council has overwhelmingly approved the finance restructuring to allow Hong Kong Disneyland to expand, although many lawmakers stressed they supported the package reluctantly.
Forty-four members voted for the restructuring yesterday, with five against and 10 abstentions.
The approval comes in spite of a revelation that the park might not break even until 2045 and the government's continuing refusal to reveal its financial performance for the past three years.
The government and The Walt Disney Company - the two shareholders - will invest HK$3.63 billion in the expansion, which will add more than 30 new rides by 2014.
To maintain its majority shareholding, the government will convert some HK$5.9 billion of existing debt to equity. The government's share will drop from 57 per cent to about 52 per cent, while Disney's stake will rise to about 48 per cent. Disney will contribute HK$3.5 billion to build three themed areas - called Grizzly Trail, Mystic Point and Toy Story. Work on the three new themed areas is to begin later this year, creating 3,700 jobs between now and 2014, the government says. On completion, 600 new cast members would be added to the theme park.
The managing director of Hong Kong Disneyland, Andrew Kam Min-ho, last night welcomed the legislature's approval of the financial arrangement and described it as 'a vote of confidence' in the theme park's expansion.
Financial Secretary John Tsang Chun-wah said the expansion could help Hong Kong Disneyland 'rise up to the keen competition in the region on the tourism front'.
Jay Rasulo, chairman of Walt Disney Parks and Resorts, said: 'This substantial investment represents our continued commitment to and confidence in Hong Kong Disneyland and solidifies our partnership with the Hong Kong government, helping assure the resort's long-term success.'
Secretary for Commerce and Economic Development Rita Lau Ng Wai-lan said approval was required urgently because of the need to create jobs and attract tourists.
She stressed once again that the value of the park was its contribution to Hong Kong's overall economy, estimated at HK$10.3 billion for the past three years.
Mr Kam promised to open up more financial and operational information in the future.
'We have agreed to release more information in our report of the 2008-09 financial year - say, profits and attendance. We shall also include the 2007-08 data in the 08-09 report. So members of the public will be presented with data from two years.'
In a special panel meeting to discuss the issue yesterday morning before the Finance Committee discussion, lawmakers expressed astonishment at the revelation that it could take up to another 20 years for the park to break even.
A note to the paper issued for the discussion said Disney estimated the park would break even by 2029-2030, or by 2044-2045, depending on economic factors. By 2044-2045, it is estimated to be generating between HK$12.6 billion and HK$18.4 billion.
'Even in the better scenario it could take 20 years. In the other scenario, it's almost 2047, we may not even have 'one country two systems' by then,' said the vice-chairwoman of the Democratic Party, Emily Lau Wai-hing.
Many lawmakers stressed that even if they voted in favour of the restructuring, it did not mean they approved of the way the whole saga has been handled.
'Just because we give you a supporting vote doesn't mean we accept this,' said Abraham Razack.