Construction of some facilities at the West Kowloon arts hub may be delayed and it is likely to include more flats and offices as it tries to survive without further government funding.
Chief Secretary Carrie Lam Cheng Yuet-ngor, chairwoman of the West Kowloon Cultural District Authority, said yesterday the authority would adopt a "pragmatic way forward" and pledged that it would not seek more money from the Legislative Council before the first phase of facilities is completed by 2018.
She denied that the original HK$21.6 billion budget had soared to HK$47 billion, but declined to give a revised estimate.
Lam said the quality of the project would not be affected but there would be deviations from the original master plan designed by Norman Foster.
She said the authority hoped the Town Planning Board would approve a "minor increase" in development density of 10 to 15 per cent - equivalent to a floor area of 70,000 to 100,000 square metres - to allow the authority to profit from selling extra space.
She did not rule out the possibility of developing this space into flats, offices and hotels instead of arts facilities.
"If we think about the city as a whole, which faces a shortage of flats, offices and hotels, it will be good to provide [more] flats, for example," said Lam.
The authority could earn an extra HK$15 billion to HK$21.5 billion if flats were built on the extra space, given that flats above Kowloon Station sell for more than HK$20,000 per square foot.
Lam said the government had also decided to shoulder all the costs - over HK$10 billion - of building a massive underground structure that will hide traffic and backstage facilities from the surface of the arts hub.
Another plan to save money is to ask a private developer to build the Mega Performance Venue and Exhibition Centre, which will hold 18,000 people and be the city's biggest concert venue.
Some landscape features in the urban park - originally intended to resemble Central Park in New York - will be replaced by modular arts and cultural venues with catering facilities.
Despite the authority's latest investment returns, which increased the budget to HK$23.6 billion, some facilities would be delayed, including the Centre for Contemporary Performance.
"We are not going to compromise on the scale or the quality of the project," Lam said.
"What we are suggesting is to exercise vigorous cost containment in each and every facility. It is really sort of finding alternative ways to ensure we can develop as many facilities as possible."
Economist Raymond So Wai-man said an increase of 10 per cent or more in development density was not "minor".
"This scope of relaxation of 10 to 20 per cent means they are finding things very different from the initial financial planning."
Professor Bernard Lim Wan-fung, president of the Institute of Urban Design, said the Town Planning Board was often willing to relax the plot ratio by up to 10 per cent. "But if it's more, we really need to do a drawing before we decide if it's too crowded."
Lawmaker Alan Leong Kah-kit said the government "owed Legco an apology", as lawmakers had warned the budget would be far from enough. "I hope this project will not be relegated to a real estate development."