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Kai Tak Sports Park

‘Get Kai Tak sports complex right or you lose HK$1 billion’

Government supporter says penalty proposal is a strategy to win lawmakers’ support for the project

PUBLISHED : Wednesday, 07 June, 2017, 9:55pm
UPDATED : Wednesday, 07 June, 2017, 10:40pm

Whoever wins the bid to build and operate a sports complex at the site of the former Kai Tak airport will face a HK$1 billion penalty if it fails to meet expectations, according to a pro-government lawmaker.

The idea was to quicken the approval process for the project in the Legislative Council, said Lau Kwok-fan, of the Democratic Alliance for the Betterment and Progress of Hong Kong.

Lau revealed on Wednesday that a representative from the Home Affairs Bureau suggested increasing the penalty from the original HK$150 million. The money would be forfeited if the contractor failed to deliver the Kai Tak Sports Park on time or did not operate it according to set standards.

The suggestion was made at a meeting with pro-establishment legislators last Friday.

“We were originally worried that under a deal to design, build and operate [the sports park], a contractor would have already pocketed a sum after construction. So would it continue to have the incentive to run it well?” Lau said.

“Increasing [the penalty] to HK$1 billion would increase the risk to the contractor. If it doesn’t operate [the park] well, the government could decide to end its contract and confiscate the HK$1 billion guarantee.”

Lawmakers gave the initial green light to the long-awaited sports complex at the end of May, but the government still faces an uphill battle to get final approval for the HK$31.9 billion project.

The bureau confirmed it met lawmakers but would not say who was present or if concessions were made.

Work on long-awaited HK$32 billion Kai Tak sports complex hoped to begin next year

“We continued to meet Legco members and stakeholders in the past week to listen to their views. Amendments, if any, will be submitted to Legco before the item is discussed at the Finance Committee,” a bureau spokeswoman said.

Lau believed the government had decided to make concessions so that the proposal could be approved sooner.

The park covers 28 hectares and includes a 50,000-seat stadium, a 10,000-seat indoor arena, a 5,000-seat community sports ground, 57,000 square metres of retail space, a “dining cove”, hotel and public open areas.

Taxpayers will pay for the construction, while the winning bidder from the private sector will be responsible for designing, building and operating the sports complex under a 25-year contract.

Lau said the bureau also agreed to consider appointing a committee to draw up guidelines to monitor the park’s operation and cut the number of “prequalified” bidders from four to three.

The two losing bidders would be compensated HK$60 million each – 50 per cent of the actual cost incurred in preparation of the tender – reducing the total payment from HK$180 million to HK$120 million.

This issue of compensation has been a sticking point with the opposition pan-democratic camp.

Civic Party lawmaker Tanya Chan, who opposed the funding proposal in the Public Works Committee, said she would need to see the “composition” of the proposed oversight committee and details of the apparent concessions, otherwise there was a risk of having “another Kai Tak cruise terminal”, which was criticised by the Audit Commission for being underused.