• Fri
  • Dec 19, 2014
  • Updated: 4:02pm
NewsHong Kong

Pressure on MTR over pace of property rollout

Corporation could be asked to surrender the right to develop property on top of stations

PUBLISHED : Monday, 03 March, 2014, 5:17am
UPDATED : Monday, 03 March, 2014, 5:06pm

The MTR Corporation could be asked to surrender the right to develop property on top of stations should it fail to roll out projects in a more orderly manner in the next two to three years.

The warning by Secretary for Development Paul Chan Mo-po yesterday came just days after he expressed dissatisfaction with the railway company for not doing enough to help the government ease the housing shortage.

In a TVB interview yesterday, Chan also said the government was negotiating with the corporation over the fate of a site in Tin Shui Wai that the MTR Corp had planned for private housing. The government wants to reclaim it for public housing development, after two failed attempts by the company to find a contractor.

He declined to discuss what options were being considered for the site, but did reject suggestions put forward by some critics that the government should offer the MTR Corp another site elsewhere for developing property.

Speaking after the TVB interview, Chan said: "We are talking with the MTR Corp with the aim of enabling its property projects to be rolled out in a more orderly way in coming years. We understand that is also its objective. Both of us are working hard together [towards that aim]."

Asked if the government would consider taking back property development rights from the railway company, Chan said he would not comment at this stage but added: "I can tell you that we have done many studies and preparatory work [on this issue]." He said it involved very complicated legal issues.

A corporation spokesman said the so-called railway-property model had worked effectively for decades and provided tens of thousands of homes.

It is government policy to grant the MTR Corp the right to develop property atop stations as a means to subsidise its rail development projects, which involve huge capital investment and are not always financially viable.

One example of an MTR property project in recent years is Lohas Park, at Lohas Park station.

Last week, Chan said the railway company had not been doing enough to help solve the city's housing shortage, and asked the MTR Corp to "try harder". Such criticism was seen as unusual, given the government is a major shareholder in the company.

The MTR Corp has not launched a single project in the past three years, with its projects often receiving a tepid response at tender.

The latest failure saw the corporation withdraw in January a project at Tin Wing light rail station in Tin Shui Wai, saying all three bids it received failed to satisfy the financial requirements.

It was the corporation's second attempt to put the project out to tender.


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MTRC can only build flats when there are stations below.....Chan's comments come from a govt. that left Kai Tak and West Kowloon fallow for more than 15 years. Let's not forget that that bumbling i d i o t Donald halted land sales.
I really don't understand why CY keeps people like Chan around. Surely K S Wong could be shifted from Environment to Development head as his background as an architect is suitable and Christine Loh promoted to head up Environment. There are very capable people in HK....unfortunately too few are in govt.
Yeah, totally agree but unfortunately, CY needs to have obedient people like Paul Chan follow him around with his tongue dangling............any competent or capable person around would not sit on the same boat as CY.
From my posting elsewhere:
Using MTR site, mainly of the space above tracks and stations has been a way to add housing stocks in Hong Kong. It makes all sense in efficient use of land and to provide MTR service where new population is expected and yet not using a cent in building the new required tracks and station. The cost of them all is paid by proceed derived from selling its air rights and any adjacent land it is given by the government free. Hong Kong government for a long time prides itself for tackling transportation and housing together with just one act and adding and expanding MTR facility and service ‘free’.
Unfortunately, there is no such free lunch. People who live above and near the MTR station not only pay for the flats but must also pay for the MTR station and tracks. What the most unwitting damage this ‘free lunch’ approach for MTR it establishes the benchmark of new flats for housing elsewhere in Hong Kong. One can imagine what profits are reaped by property developers in Hong Kong.
The collateral damages by such model in getting a ‘free’ MTR are flats must be small enough and dense enough to be affordable and sufficient amount to pay for the expansive MTR.
Hong Kong has made two mistakes when come to get its MTR built. First, forcing MTR to use property to finance its operation. Secondly, Privatizing it. Both moves is now come to roost after it can’t repeat its ‘free finance’ by property formula. MTR can’t sell its air right as much to meet its cost. Property developers aren’t bidding because cost of property is down by 30% -- more or less reflects the real cost of housing without the burden paying for a ‘free’ MTR station and tracks.
I am still puzzled that the government being the majority shareholder of MTRC, yet it is telling the public having difficulty in dictating the use of the air rights. Can the government explain the difficulty?
I only can advise the government to scrape the way how infrastructure should be financed. Not by one generation but many?
Perhaps government should buy back the MTRC especially the recent string in management troubles may tell us the future of a privatized infrastructure to maintain a good track record is a skimpy hope – an exception in the world of railway to be otherwise.
Taking property development away from the MTR Corporation might just get them to turn their attention back to running a public transport system which for some time now has been treated like a step-child and has been suffering for lack of focus, attention and resources.
Good idea if you don't want any more rail lines or stations built or any renovation of existing facilities. The real estate revenue for MTRC pays for all of that.
MTR runs trains. It is very odd that it should also be responsible for building housing. Is that to save on Govt involvement and funds?
The sale of real estate above stations is how MTRC pays for system construction. MTRC is really a real estate company with a loss making railway. If you take away real estate, there is no mechanism in place to pay for rail and station construction.


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