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Public should have been notified of wheel closure, Hong Kong development chief admits

Michael Wong Wai-lun says initial silence was because government believes in ‘spirit of contract’ and did not want to pressure operators

PUBLISHED : Sunday, 10 September, 2017, 12:23pm
UPDATED : Sunday, 10 September, 2017, 2:33pm

Hong Kong’s development chief has admitted the government should have notified the public about the closure of the Observation Wheel at Central Harbourfront in late August.

On Sunday, Secretary for Development Michael Wong Wai-lun conceded city officials “should have told people” about the potential closure but at the time they hoped “both operators would reach an agreement and send out a notice instead”.

On August 30, the tourist attraction was suddenly shut down. It later emerged that former operator Swiss AEX was locked in a payment dispute with new tenant The Entertainment Corporation Ltd (TECL). The wheel faced demolition if a consensus could not be reached.

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The ride’s future was not secured until Wednesday last week after the two companies struck a deal just one day before the deadline. Swiss AEX agreed to hand over control of the wheel to TECL.

The week-long saga came down to a game of brinkmanship, according to tycoon and mediator Allan Zeman.

It also sparked concerns over the role and capability of the Development Bureau in the transaction. The government was behind the retender decision, with TECL eventually winning the contract.

Addressing the matter on Sunday, Wong said: “We did not press either side because Hong Kong doesn’t work this way. We respect the spirit of contract.”

He added the bureau had promptly replied to media inquiries about the uncertain fate of the wheel after news of its shutdown broke.

“But then negotiations were still ongoing so the government didn’t want to take a strong stance which might also have brought talks between both sides to a standstill,” Wong explained.

Hong Kong doesn’t work this way. We respect the spirit of contract
Michael Wong, development chief

He said there were already terms in the transaction stating that the new tenant could run the facilities built by the former operator.

“We didn’t make it mandatory for the former operator to sell the facilities to its successor because the site was on a short-term lease and a clause like that might have driven away potential tenants,” Wong said.

With TECL on a three-year contract, long-term planning for Central Harbourfront was another issue that came under the spotlight during the wheel row. It was now unclear whether there would still be a wheel on the site after 2020.

Wong said by that year, when most of the land currently used as construction sites were returned to the government, the bureau would have a better chance to make long-term plans for the open waterfront space.

“If in the future, a wheel is still considered a good choice, we may have a larger and better one,” he said.