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Tourism

Site for Hong Kong Observation Wheel may be seized if new tenant fails to execute plan

Development Bureau stands by retender decision and says new operator should be motivated to start the ride as soon as possible, since it has to pay rent

PUBLISHED : Tuesday, 05 September, 2017, 8:33am
UPDATED : Tuesday, 05 September, 2017, 3:28pm

The government has said it could seize the land that the Hong Kong Observation Wheel stands on, if the new tenant does not get the waterfront Ferris wheel up and running soon.

The Development Bureau also reserved the right to seek damages in court if it has to go through with the seizure.

In a statement issued late on Monday night, the bureau stood by its decision to put the site up for retender last November, instead of giving another short-term lease to the current operator, Swiss AEX.

Bidder for Hong Kong Observation Wheel pledges to lower ticket prices

“Our main consideration is to attract competitive tenders through fair and transparent means to provide the public with a high-quality wheel operation,” the bureau said.

On Tuesday, Chief Executive Carrie Lam Cheng Yuet-ngor said the government could only respect the tender process and act as a mediator between the firms.

Our main consideration is to attract competitive tenders
Development Bureau

Asked if the government would step in if the wheel had to be torn down and whether the government had a responsibility to evaluate the situation during the tender process, she said: “As is the usual practice, the government could only work according to the spirit of the tender. We could not interfere in a random way.”

Lam described the tender process as “fair, just and without bias”. She added some might argue the tender requirement be written more strictly but others could be deterred if it were too strict.

Last week the wheel was closed with no warning or explanation from the Tourism Board.

Swiss AEX had earlier lost the retender for the site to The Entertainment Corp Ltd (TECL), which is obliged to operate a wheel, but not necessarily the current one. The two companies were locked in a dispute over payment issues, which had contributed to the sudden shutdown.

The bureau’s statement on Monday night said: “Once we have decided to retender [the site], there can be no guarantee that the current operator will win the bid. We also have to accept the possibility of a service suspension if another company secures the tender, be it [TECL] or other companies.”

Authorities also said should TECL fail to execute its plan, or if there were reasonable grounds to believe it could not do so, the site would be seized and the security deposit confiscated.

The bureau refused to disclose details of the winning tender, citing the need for consent from the parties involved.

Hong Kong Observation Wheel could be closed for two years as new operator takes over

The bureau also defended its decision not to impose a deadline for TECL to start running either the current wheel or a new one.

“Since the new operator is still required to pay the rent while building the wheel and applying for relevant permits, there should be enough incentive for the operator to start service as soon as possible.”

In a statement issued earlier on Monday night, TECL pledged to offer lower ticket prices, despite admitting it was still in talks on acquiring the wheel.

Swiss AEX said it was still seeking payment for the wheel from TECL, which it described as a newly formed company “with no experience of operating observation wheels whatsoever”.

TECL also said on Monday night it was in direct discussions with ride owner Dutch Wheels about the acquisition.