Bonds may still leave taxpayer picking up bill

Critics have questioned whether issuing bonds can save the arts district from a severe financial shortfall and prevent taxpayers footing the bill.

The government has underestimated the budget by billions of dollars, forcing officials to explore alternative financing options, in addition to the income derived from investing the approved budget of HK$21.6 billion.

According to Michael Lynch, the chief executive officer of the West Kowloon Cultural District Authority, apart from seeking donations, sponsorship and selling naming rights, issuing bonds will also be part of the funding strategy, and that negotiations with the government on the matter are already under way.

Chau Kwong-wing, a professor at the University of Hong Kong who reviewed the arts hub's budget, said that issuing bonds was a wise decision from a political point of view as it did not require seeking approval from lawmakers, who were already highly critical of the project's development.

However, on the financial front, the government may have to be the guarantor for the bonds issued, so that the authority could borrow the money from the public at a lower interest rate than otherwise available.

'That means the government will have to pay for the authority's debts if the arts hub's operation suffers a loss. So it's taxpayers who end up paying the bill,' Chau warned.