Basement woes could get deeper
Arts hub bosses could see costs rise even higher if they try to build controversial underground infrastructure in phases, experts warn
Arts hub bosses could be storing up problems for the future and risking even higher costs by taking the politically easier option of splitting work on the site's vast basement into phases, construction experts say.
The basement is intended to keep the West Kowloon Cultural District car-free, linking nearby roads and providing parking and loading facilities.
But it has become a hot potato since Wednesday, when it was revealed that the work would cost HK$23 billion if it were to be finished in one go. The authority overseeing the arts hub told lawmakers it was instead dividing the basement into six sections, to be finished in at least three phases. But experts say that approach brings its own problems.
"Asking for a smaller sum of money from lawmakers each time could be an easy way out politically. But the problem is that the later it is built, the costlier the whole project would be. In the end, it's taxpayers paying the money," said Chau Kwong-wing, chair professor in the department of real estate and construction at the University of Hong Kong.
Chau, who was commissioned by the Legislative Council in 2008 to review the government's proposed budget for the arts hub, estimates that construction costs will rise by an average of 8 per cent per year, based on increases of between 6 and 14 per cent in each of the last four years.
The government announced last year that it would put in HK$10 billion for basement work and other infrastructure improvements on the site - on top of the HK$21.6 billion endowment it gave the arts hub in 2008.
But that only covers some infrastructure and the first three sections of basement. Officials on Wednesday were reluctant to state how much the later work would cost, citing uncertainty brought to the second phase of the arts hub by a delay to the high-speed rail terminus, which will be integrated with the arts facilities. But observers like Chau believe the reluctance to put a price on the work has more to do with concerns about public expectation.
Chau sees little prospect of construction costs coming down as the government pours money into transport infrastructure across the city and encourages homebuilding, while the idea of importing construction workers remains taboo.
"Apart from the major infrastructural projects, don't forget about the city's ambitious housing target - and the government is only searching for land at this stage; few flats have been built," he said, referring to the chief executive's target of building 470,000 flats in the next decade.
Arts hub bosses say splitting up the basement work could help them financially because it reduces uncertainty relating to the rail link and should allow them to release land allocated for flats, offices and hotels three years earlier than expected.
But Chau says a decision last year to split the basement work into phases will also complicate the authority's plan to use revenue from restaurants and shops to pay its running costs in years to come.
"The scattered venues surrounded by construction sites will reduce the attractiveness of the art hub, hence undermining the revenues from retail and dining facilities," Chau warned.
According to the construction programme released last year, the 12 arts and performing venues are divided into three batches. Batch one, planned for completion in 2017, covers the park and the flagship museum M+ at the western end of the 40-hectare site and the Xiqu Centre for Cantonese opera at the eastern end.
The second batch, due by 2020 depending on the railway problems, covers the Lyric Theatre in the east, the medium-sized theatre and Centre for Contemporary Performance in the west. There is no definite timetable for the third batch, located at the heart of the site and including the Great Theatre, Musical Theatre and Music Centre.
Chau said the separate clusters of venues at the western and eastern ends of the site would mean the whole site would be disrupted by the construction work.
The authority admitted as much on Wednesday, when it forecast an operating deficit of HK$50 million for this financial year, growing to HK$400 million by 2018/19 due to the delays.
The deficits will have to be made up from the HK$21.6 billion endowment: a sum that now looks hopelessly optimistic.
Chau and lawmakers predicted as much back in 2008, but the government insisted the endowment would cover the cost of building and equipping the facilities. Its consultants had predicted an investment return of 6 per cent per year against an increase of construction costs of just 2 per cent annually.
In reality, the investment returns have been no more than half the predicted level, while construction costs have shot up. The authority now says the first two batches of venues will cost HK$17.8 billion, a figure that led Chau to ask: "Are we still building a world-class art hub?"
The number of venues has been cut from 17 in 2008 to 12 now and one, the Mega Performance Venue, will rely on private funding.
Ivan Ho Man-yiu, a council member of the Hong Kong Institute of Urban Design who has tracked the project for years, said the big mistake was to choose an ambitious design for the site put forward by world-famous British architect Norman Foster and including the basement.
"It was the scheme that had the least flexibility for changes and it required huge upfront costs to build the basement," Ho said.
He said the major problem with the idea of splitting up the basement project was that, for now at least, there would be no through road beneath the hub. That would leave visitors reliant on the busy roads and junctions around the site, including Austin Road and Canton Road.
"It would further worsen the traffic congestion in the district and visitors would have to spend more time travelling to the arts hub," Ho said.
That said, Ho believes a phased approach to the building is the way to go - but it will require careful planning.
"No place in the world can build such a massive arts hub in one go," he said. "Completing the whole basement right away could also intensify the competition for labour and materials in the building industry."
And what of the arts lovers who will flock to West Kowloon?
Art critic John Batten urged the government and the authority to consider how culture fans will get to and around the new facilities, given that the centre of the hub is likely to be a building site for years to come.
"How do people move from one end to the other? M+ will be isolated when it opens," Batten said. "The transportation link is appalling."
He believes an age-old Hong Kong solution could help. How about an arts hub ferry pier?