Firm of tourism chief Peter Lam to build hotel at Ocean Park

Development company owned by Peter Lam, also a tycoon and government ally, generates talk of conflict of interest with its winning bid

PUBLISHED : Friday, 11 October, 2013, 12:00am
UPDATED : Friday, 11 October, 2013, 3:11am

A property development company owned by government ally and Tourism Board chairman Dr Peter Lam Kin-ngok has won a tender for a HK$4.1 billion project to build a long-awaited hotel at Ocean Park.

Capital Court is said to have beaten six other bids received in the January exercise, but its appointment raised concerns over a possible conflict of interest.

Ocean Park said Capital Court, a wholly owned subsidiary of Lai Sun Development, was found to be the "most preferred proponent" for the project after a six-month study of the bids.

The theme park's chief executive Tom Mehrmann sought yesterday to dispel the concerns.

"Lai Sun was selected because it has achieved and exceeded the passing scores under the technical evaluations on design excellence, financial strength and management credentials, and has proposed the highest premium amount out of all the tender submissions," Mehrmann said.

Lai Sun teamed up with Marriott International in the bidding. Lai Sun offered about HK$1.6 billion in land premium.

The construction cost is estimated at HK$2.5 billion.

The 495-room hotel will sit on a 1.7-hectare site at the park's main entrance in Aberdeen. It will be operated by Marriott.

Ocean Park is to seek final approval for the development from the Town Planning Board.

The project is expected to break ground in the first half of next year and is due to open by early 2017 - some four years behind the original schedule as it should have opened this year.

The plans lapsed in 2011 because of a lack of interest from developers, which were reportedly discouraged by the high land premium sought by the government. A revised tender in January eased some of the requirements and attracted seven bids.

Lai Sun Development falls under the Lai Sun Group, which Lam chairs. The pro-government tycoon is known to be a fan of Chief Executive Leung Chun-ying. He was appointed early this year to chair the Tourism Board, and this week he was named to a new government advisory committee on trade co-operation with the mainland. Lam also sits on the Chinese People's Political Consultative Conference.

Another of his subsidiaries, Lai Fung, faced a public outcry in June for demolishing two historic buildings in Guangzhou, one of which was the home of late "King of Cantonese opera" Sit Kok-sin.

Tourism-sector lawmaker Yiu Si-wing warned of a possible conflict of interest. "The details of the winning bid and the tender screening mechanism should be revealed to the public and the bidders who lost," Yiu said.

Ocean Park said: "During the tender process, declarations of interest were made by all relevant board members of Ocean Park. Those board members with any interest in any of the parties submitting tenders did not take part in any deliberation, assessment or scoring of the tenders, while the [Independent Commission Against Corruption] was engaged to provide input on and review the tender procedures and observe the scoring process."

Lai Sun Development deputy chairman Chew Fook-aun said: "We joined the tender … as we planned to increase our leasing portfolio." He said Lam knew the company was planning to bid, but did not take part in any meeting on the project led by Chew.

The Tourism Board said it was not involved in the tender and that the project was a private business under Lam's group.