Lawmakers have criticised a land premium deal with Wharf Holdings and Wheelock for Ocean Terminal in Tsim Sha Tsui for being too low. The deal with the Lands Department came as Wharf's subsidiary, i-Cable Communications, is struggling to get a free-to-air television licence.
Wharf and Wheelock are trying to resolve the dispute by clarifying the extra gross floor area they can generate from the renewed land lease. The companies could gain up to 24,542 square metres and plan to build a four-storey building with a total floor area of 8,752 sq m. But, 80 per cent of the area will be used for car parks and cruise terminal facilities.
'The land premium is too low as they are leasing retail space for more than HK$1,000 per sq ft (per month) but they only need to pay a land premium of about HK$500 (per sq ft),' Democratic Party lawmaker Lee Wing-tat said.
He and nine lawmakers wrote to the chairman of the government's Panel on Development, Professor Patrick Lau Sau-shing, seeking an urgent meeting on the issue.
'Ocean Terminal is a big project and it should be released for open bidding instead of negotiating with Wharf. Then we can get the real market price,' Lee said. 'It is difficult to speculate if the issue is related to the free-to-air television licence. But the land premium assessment procedure must be open and transparent.'
Legislator James To Kun-sun said that if the project was an open tender, lawmakers could not criticise the premium. 'But now it is a private negotiation,' he said. 'The government has to justify that the land premium is reasonable.'
Ronny Tong Ka- wah, a Civic Party lawmaker, said the Ocean Terminal site was a large site in a prime location that should be up for tender.
'The existing procedure of land premium assessment shows a lack of transparency,' he said. 'The government should give us more information about the case.'
Others views were mixed on Ocean Terminal's land premium. A report by CLSA said the land premium of HK$7.9 billion was less than their expectations. But Credit Suisse said that by including the potential increased gross floor area into their calculation, HK$408 per sq ft per year was in line with their expectation of HK$397 per sq ft.
Chan Cheung-kit, a director at Lanbase Surveyors, said it was impossible to judge whether the land premium was too low or too high. He added that it also included land used for the actual terminal, not for retail.
A source from Lands Department said the calculation of Ocean Terminal was different from other projects as the lease was for 21 years instead of 50 years.Topics: Hang Seng Index Constituent Stocks Construction Ocean Terminal The Wharf Wharves Construction