Secretary for Development Carrie Lam Cheng Yuet-ngor said yesterday the government would take account of the financial crisis and pay HK$45 million towards the revitalisation project, which calls for investment of HK$70 million. A tender exercise will be launched by the end of the year.

The mansion, in Tai Hang, was retained when the Tiger Balm Garden was demolished to make way for a luxury property development.

Mrs Lam's bureau has proposed it finance works in the project, which include repairing the building and installing electricity, water supply, access facilities for the disabled and fire-safety devices. The operator will perform these tasks and be reimbursed up to about HK$45 million.

The minister defended the proposal of subsidising a business.

'It's normal for a landlord to renovate his flat before renting it out. This is market behaviour.' The mansion needed complex and costly maintenance work, she said.

It will be up to the bidder to suggest the building use and monthly rent. The term of the lease had yet to be decided, Mrs Lam said, but it would be more than seven years to enable the operator to recover costs. Considering a lease of 10 years, the future operator would need to recoup around HK$600,000 a month to recover the initial investment.

The mansion would not have to be a wine centre, as suggested in the policy address last year, she added, and it could be used for wedding banquets or a restaurant. She said the operator would be required to open parts of the building to the public. 'It would not be a private clubhouse.'

Lawmakers will be consulted next week. Alan Leong Kah-kit of the Civic Party said the government had to explain the rationale behind the cost estimates. 'The government has a bad track record of commercial undertaking, as in the deal with Disney. How can it persuade us this will be a good deal?'

Gregory De'eb, managing director of Crown Wine Cellars, said he was not interested in turning the mansion into a wine centre. Wine storage space in the basement and alfresco dining areas could be incorporated as part of a community-based facility, he said, but a fine-wine centre did not make much business sense.

Haw Par Mansion

Location Tai Hang Road, Causeway Bay

Built 1933-35

Gross floor area 1,600 square metres

Historic grading Grade II (now proposed to be Grade I)

Background A private residence of the Aw family with garden open to the public. Family surrendered mansion to the government in 2001