The total cost of the controversial Oriental Plaza project in Beijing has shot up to US$2 billion due to construction delays, according to Hutchison Whampoa chairman Li Ka-shing.
His latest estimate of the development's cost is about 17.6 per cent higher than the US$1.7 billion predicted last year and 54 per cent higher than a 1995 forecast of $1.3 billion.
Speaking after Hutchison's annual meeting yesterday, Mr Li said his flagship, Cheung Kong (Holdings), and Hutchison had invested more than HK$2 billion in the project in recent years.
The development is being undertaken by a consortium led by Cheung Kong and Hutchison and including Orient Overseas (International).
Analysts said the increase in costs could be partly due to inflationary pressures and to rising interest expenses due to construction delays.
Construction work at the prime site in the Wangfujing area was halted at the end of 1994 after the original plans were for too high a development, which was likely to spoil the image of buildings around the Forbidden City. The consortium had to scale down the design.
