Planned arts and cultural facilities at the West Kowloon arts hub were projected in 2005 to incur losses of up to HK$300 million a year, a corruption trial involving former chief secretary Rafael Hui Si-yan heard yesterday.
The estimate came from the director of the Leisure and Cultural Services Department at the time, during a May 24, 2005, meeting of the steering committee for the West Kowloon Cultural District project, defence lawyers for Hui said.
At that time, Donald Tsang Yam-kuen was still the city's chief secretary and chairman of the committee, before he became chief executive later that year.
Hui is alleged to have received tens of millions of dollars from Sun Hung Kai Properties' co-chairmen to be the developer's "eyes and ears" in the government over the West Kowloon project and a development on Ma Wan Island.
The arts hub received proposals from five developers, one of which was an SHKP joint venture with Cheung Kong.
After Hui replaced Tsang as chairman, the committee in September 2005 decided the winning developer must carve out half of the residential and commercial developments in the arts hub for open bidding, Hui's lawyers told the Court of First Instance yesterday, citing documents.
This was more than the 40 per cent requirement Tsang suggested in May that year, the court heard. Hui became chief secretary on June 30.
The court heard the decision was meant to tackle public concerns that the project would be awarded to a single developer.
Worries about possible collusion between the government and the single successful developer were reflected in a public consultation that ended on June 30, 2005.
With Hui as chairman, the committee also decided to bar the winning developer from taking part in the bidding, unlike Tsang's proposal, Hui's barrister Edwin Choy Wai-bond noted.
It set the plot ratio of the project at 1.81, Choy said, citing an Executive Council document. Tsang had in May proposed increasing it to a denser 2.5, the lawyer said.
As well, the committee limited the space for residential development to 20 per cent of the total gross floor area, while setting aside 185,000 square metres for core arts and cultural facilities.
The successful developer must also pay HK$30 billion upfront to set up an independent trust fund supporting arts programmes, the court heard.
"This represents a significant difference from the proposal as envisaged by Mr Tsang in May 2005?" Choy asked.
Witness Danny Lau Kam-chuen, principal assistant secretary for home affairs that year, agreed. Lau was responsible for preparing confidential documents for the committee.
For each of those decisions, Choy asked: "The decision by the steering committee was made under the leadership of Mr Hui?"
In reply, Lau said: "The additional parameters and requirements had been explained to the steering committee members."
Exco endorsed the committee's recommendations in October, the court heard.
Hui, 66, faces eight charges related to bribery and misconduct in public office.
SKHP co-chairman Thomas Kwok Ping-kwong, 62, faces one charge of conspiracy to offer an advantage to Hui and two counts of conspiracy to commit misconduct in public office. His brother and co-chairman Raymond Kwok Ping-luen, 61, faces four charges, including one with Hui of furnishing false information.
SHKP executive director Thomas Chan Kui-yuen and former Hong Kong stock exchange official Francis Kwan Hung-sang each face two charges. All plead not guilty.
The trial continues before Mr Justice Andrew Macrae.