Property developers oppose government's new towns project

Property firms angry government will only pay agricultural - not development - value of plots

PUBLISHED : Thursday, 13 September, 2012, 12:00am
UPDATED : Thursday, 13 September, 2012, 3:41am

Environmentalists and villagers fighting the latest plan for three huge new towns in the New Territories have an unlikely ally: some of the city's biggest developers.

The long-planned developments, which were shelved in 2003 then revived in 2008, were to have been built under a public-private partnership, allowing developers to keep the right to build on land they owned in areas affected.

Instead, when it revealed the latest plans for the towns in June, the government said it would return to the approach used in new towns in the 1970s. The government will do it all, clear the land, assemble the infrastructure and then sell on sites zoned for commercial or residential use.

That means developers will receive only what the land is worth for its present agricultural use - which may be well below what they paid for it when they believed it could be developed.

The partnership approach was intended to reduce up-front costs as half of the land is in private hands. But officials say the new plan will speed up development and ease public concerns about "collusion" with developers, though they noted the possibility of a legal challenge.

The Real Estate Developers Association says it is preparing a submission to the consultation exercise on the plans before it ends on September 30. Earlier, its executive committee chairman Stewart Leung Chi-kin said its members opposed the government takeover of their land, as they had used huge resources to assemble large blocks of agricultural land over as much as 20 years and expected to be able to develop it after the partnership idea was announced in 2008.

Henderson Land Development and New World Development are big landlords in Fanling North, Sun Hung Kai Properties in Kwu Tung North.

Barrister and former lawmaker Audrey Eu Yuet-mee said it was debatable whether plans for the new towns, particularly the presence of private housing developments, would meet the criteria of "resumption for public purpose" set down by the Lands Resumption Ordinance. "Public housing is fine, but you need to justify why you resume private land and then use it to build hotels and malls," Eu said.

But Malcolm Merry, a professor of law at the University of Hong Kong, said the new towns project was a comprehensive plan for a mixture of uses that would require the government to take over all the land.

"It's an established way of doing new towns. I believe developers would be less upset if the compensation they got fully reflected the development potential of the land," Moore said. "Developers cry foul, but they had left the land empty and make money out of waiting."

He said the Court of Final Appeal ruled in 2003 that no compensation was to be awarded for expectancies by virtue of which speculators were prepared to pay more for land than its value for agriculture.

The government could always hand out more compensation under the existing "ex-gratia" mechanism to pacify landlords and there was no need to amend the legislations, he said.