The Urban Renewal Authority's biggest single project has suffered a setback after bids by developers apparently failed to meet standards set out by the quasi-governmental body.
The authority said yesterday it had been unable to choose any of the four bidders under the tender terms it had set for a project that is intended to turn Kwun Tong's rundown town centre into a "mini Taikoo Shing", and would revise some of the terms and seek new bids.
But it insisted that the target of providing the project's specified 1,700 flats by the 2019-20 financial year remained unchanged.
Ten companies had been invited to bid for the project but only four did so.
The development also includes three hectares of floor area for shops and a two-level public transport interchange over two hectares.
Under the bidding terms, the winner was required to pay a minimum of HK$8 billion to the authority, with total investment for the project estimated at as much as HK$18 billion.
After a board meeting yesterday, the URA announced that the 10 developers would be invited to submit proposals again based on new terms yet to be released.
One of the major reasons behind the failed bidding process was that the prices offered by all four bidders were below the authority's expectations, according to three sources from the URA board. But a fourth source from the board said price was just one of the factors and each of the four developers had disagreements with the URA over some of the requirements, which he did not elaborate on.
While the new terms have not yet been decided, one of the sources said increasing space for retailing was one of the possibilities which would be looked at to boost the project's potential profitability for the bidders.
Dr Lawrence Poon Wing-cheung, a real estate scholar at City University, said the scale of the project, its expected high construction costs, the winner's responsibility to build the public transport interchange, the noise problem on Kwun Tong Road, and the URA's strict requirements for the design were all deterrents to developers.
Poon said the failed bidding process dealt a blow to Chief Executive Leung Chun-ying's target of building 470,000 flats in a decade.
"Will another round of tenders fail again?" he asked. "It may pose further uncertainty for housing supply."