Google has scrapped plans to build a data centre in Hong Kong.
The decision came two years after a groundbreaking ceremony at its site in Tseung Kwan O - and the land still remains a piece of barren land.
Google said lack of land availability could stop it taking advantage of the lower costs that arise as operations get bigger.
"While we see tremendous opportunity and potential in Hong Kong … we will not be moving ahead with this project," Taj Meadows, Asia-Pacific policy communications manager, said yesterday, according to the Wall Street Journal.
"To keep up with the rapid growth in users and usage across the region, we need to focus on locations where we can build for economies of scale."
The Hong Kong government confirmed Google's "decision to surrender the site".
Hong Kong Science and Technology Parks Corporation granted the 2.7 hectares to Google for its data centre, which would have housed computer, telecommunications and storage systems. And in 2011, the internet giant said it would be investing US$300 million in the centre.
Google operates 12 data centres globally, and it has announced an investment of US$300 million for a data centre in Taiwan and US$120 million for a facility in Singapore.
Both centres were scheduled to be operational before the new year.
A government spokesman said the surrender request was processed in accordance with the conditions stipulated in the lease, and the corporation was working with Allied Trade Holdings - the name under which Google obtained the site - on the final arrangements of the surrender agreement.
Paul Fung Tak-chung, who runs data centre Photon Link, said: "Google makes use of natural winds instead of air-conditioning in its new data centres overseas. It is environmentally friendly, but hard to replicate in Hong Kong due to stringent plot-ratio requirements.
"I don't believe the government would relax building regulations for Google no matter how innovative its design is," Fung added.
Information technology lawmaker Charles Mok blamed Leung Chun-ying's administration for letting the deal fall through.
"Why didn't Leung make a call to Google executive chairman Eric Schmidt?" said Mok.
"I'm sure [Taiwanese President] Ma Ying-jeou or [Singaporean Prime Minister] Li Hsien Loong must do that," he said.