THE Government is insisting that Hongkong Ferry (Holdings) pays a land premium of about $2.7 billion for its Central pier office development, despite strong protests from the firm. William Wong Wing-lun, director of Hongkong Ferry's major shareholder, Henderson Land Investment, said a higher than expected figure had been applied by the Government and it was excessive. 'The project should not be charged at a full market value,' Mr Wong said. Some analysts expected the Government to place a bigger discount on the premiums because a significant part of profit would subsidise the ferry service through its operating unit, Hongkong & Yaumati Ferry Co (HYF). A $2.7 billion land premium was first announced by the Government through the Government Information Service nine months ago, but was denied by the Government the day after. Mr Wong confirmed the $2.7 billion figure yesterday and said Hongkong Ferry would appeal. Hongkong Ferry former chief executive Peter Wong Man-kong had said the investment would not be viable if the land premium was as high as $2.7 billion. The Central pier development includes a retail, office and residential complex of four blocks, with a gross floor area of 590,000 square feet, on top of four new piers. The project is part of the first phase of the Central reclamation development in front of Exchange Square. According to the announcement released last year, Hongkong Ferry would provide HYF with the greater part of $640 million or 60 per cent of profits from the sale of the development, as well as half of the rental income derived during the franchise period from not less than 20 per cent of the gross commercial floor area. HYF would use the money to finance ferry service improvements, to keep future fare increases in line with inflation and to cover the losses that HYF would incur in operating ferry services.