West Kowloon arts hub costs to exceed HK$21.6b
Dennis Chong and Vivienne Chow
The final cost of the much-delayed West Kowloon Cultural District will easily exceed the HK$21.6 billion that the government has already invested.
Michael Lynch, the new chief executive of the arts hub authority, told a Legislative Council meeting yesterday that the amount was far from sufficient.
He also said the government should consider picking up the costs of some projects, especially infrastructure.
To preserve cash, the phased construction of the development is also under review.
However, the much-delayed project should be able to start under any circumstances, Lynch said.
He conceded, however, that the financial situation was vulnerable because of high inflation, surging construction costs and low investment returns from the government's HK$21.6 billion endowment.
His assessment comes five weeks after he took over from Graham Sheffield, who left for health reasons.
New features laid out in the latest development plan - such as underground facilities and green features - would add to costs. The green features, which will cost HK$4 billion, will include a centralised cooling system, automatic garbage collection and advanced recycling system.
'Since [an assessment in 2006] there have been significant short-term fluctuations, in terms of construction cost escalation, investment return and inflation rate, including a world financial crisis,' Lynch said. 'As you note from the newspapers, inflation ran at 7.9 per cent in July in Hong Kong with ongoing uncertainty about the future.'
Lawmakers said it would not be easy to get approval for more money.
'Hongkongers are not going to feel it is acceptable. Not a single building has been put up and now you are saying you need more money,' said Democrat Lee Wing-tat.
Several members of the West Kowloon Cultural District Authority board said more money was needed to prevent the failure of the project, which is aimed at creating a world-class arts and cultural centre.
'We can't do it now. Construction costs have surged,' said Professor Lee Chack-fan, a board member.
Sin Chung-kai, vice-chairman of the Democratic Party, estimated costs had surged by 50 per cent since a 2006 assessment, which led to the approval of the HK$21.6 billion in funding in 2008.
Board member and Ocean Park chairman Allan Zeman said more cost details would be made available after the next round of the public engagement exercise next month.
In a paper submitted to Legco, the authority proposed reducing the size of some facilities, such as car parks, and developing venues in 'optimised' phases.
Selling the naming rights of facilities is seen as another possible source of income.
Also, Lee said the board had considered seeking financing from the private sector in the form of private-public partnerships, corporate sponsorship and philanthropic contributions.
In 2008, Legco approved the one-off endowment of HK$21.6 billion for the construction of the arts hub, which will produce a dozen performing and visual arts centres and museums.
The venues include the M+ museum and the Xiqu Centre, a performance venue for Cantonese opera, which is the first facility slated for completion in 2015.
That is according to the current plan, which will be submitted to the Town Planning Board later this year.
Lynch became the new head of the arts hub last month after Sheffield's abrupt resignation.
Lynch said yesterday that he was 'reasonably well adjusted' to his new job. He said he was prepared to meet the challenges arising from local politics and red tape. He said he was confident that he would not be 'killed by bureaucrats'.