A historic wall in Ma Wan was partly knocked down while under the charge of Sun Hung Kai Properties as it pursued the development of much-delayed leisure facilities on the island, the company said.
The wall was "partially demolished" by a private owner who had refused to sell the land to SHKP for the continued development of Ma Wan Park, the company said in a paper submitted to the Town Planning Board.
The gable wall, which is almost one storey high, forms part of a former customs station that the British used to control the smuggling of goods to the mainland after it colonised Hong Kong.
SHKP's admission ran counter to a planning condition imposed by the board in 2006 that required the company to ensure the wall would remain intact in its development of Ma Wan.
In 1997, the company received approval to develop Park Island, a luxury residential estate, on condition that it would also build the 18-hectare Ma Wan Park. It obtained a government subsidy of HK$800 million to carry out the park project, for which it had to resume land that belonged to private individuals.
SHKP completed phase one of the park only in 2009, three years later than required under the agreement.
The second phase, where the wall is located, should have been finished last year but is still not open to the public.
In the paper, to be discussed by the board today, SHKP said it would give up the lot to avoid further delay and asked the board to remove the planning condition.
The developer said it had tried its best to negotiate with the land owner since 1994, including offering a cash payment, removal allowance and Park Island flats, but all the proposals were turned down. It did not name the owner.
The Planning Department said in the paper: "Since then, [SHKP] had not proactively communicated with the owner but [held out] a hope and assumption that the lot owner would comply with the approved plan."
It said the damage inflicted on the wall was beyond the control of the developer, and that the Antiquities and Monuments Office did not object to deleting the condition.
Former board member Ng Cho-nam criticised SHKP for making an empty promise and the government for letting it off.
"The conservation was supposed to be a planning gain in return for the enormous profits from flat development. It is SHKP's responsibility to make it happen," Ng said. "The developer should be asked to restore the wall or do more conservation to compensate for the loss."