The government has turned down property tycoon Lee Shau-kee's offer to donate land for homes and urged landowners with similar plans to work with non-profit organisations such as the Housing Society instead.
The announcement was made yesterday by Secretary for Development Paul Chan Mo-po, five months after Lee's company, Henderson Land Development, first said it was in talks with the government about the proposal, which involved farmland in Yuen Long and Fanling.
Lee wanted to build 300 sq ft flats for sale to young people at HK$1 million each - enough to cover costs, provided the government waived its usual land conversion premium. Following Lee's offer, Henry Cheng Kar-shun, chairman of New World Development, said his group was also willing to donate land.
Lawmakers were speculating last night whether the government rejected Lee's offer to avoid being accused of colluding with the developers.
A government source had disclosed last month that Chief Executive Leung Chun-ying was in a dilemma over Lee's proposal.
Chan said: "Different donors have different ideals and impose different conditions on their proposals to donate land.
"In such circumstances, we think that it would be best for these interested donors to approach non-profit organisations to explore the possibility of donating land to them to take forward the projects and realise their ideals."
The minister cited the Housing Society - seen as the government's partner in the construction of affordable flats - as an example.
Chan added that if such bodies accepted land donations, the administration would work with them on issues that touched on government policy.
Lee said he had contacted the Housing Society following the government's decision and would now rethink his plans.
He said last night: "It was my dream to build 10,000 flats for young people ... But some sites do not fulfil environmental and planning requirements." New World Development did not reply to requests for comment.
Housing Society chairman Marco Wu Moon-hoi said the organisation would be willing to explore the proposal "as long as it fits in with government housing policy".
But he said it was up to the developer to provide more information, including whether the infrastructure necessary to support housing development was in place and whether relocation of residents would be an issue.
A government source had previously said officials were worried that Lee's proposal to designate the flats for young people would cause controversy by excluding older potential buyers living in subdivided flats.
Also, it is not usual to waive land premiums for developers.
Democratic Party lawmaker Sin Chung-kai said the government should not rely on non-profit-making bodies.
"At the end of the day, the government has to bear the responsibility for providing the infrastructure," he said.
Lawmaker Chan Yuen-han, who represents the Hong Kong Federation of Trade Unions, wondered whether the proposal to donate land was intended to further the interests of the developer - and also wondered what those interests were.
She urged the government to set up a transparent committee to define conditions for accepting land donations.
Lee dismissed any suggestion he was colluding with the government and said Henderson Land Development had always followed rules on land premiums.