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. Mr Li hinted yesterday that construction of the 6.06 million square foot project would restart soon. He said he had heard that the project had been approved, though formal approval from Beijing had not been received. 'I will be very happy if the project starts construction before July 1,' he said. He hoped construction would be finished by the end of 1999. Mr Li would not disclose the equity distribution among shareholders. According to its latest annual report, Hutchison has 22 per cent of the project. Commenting on the outlook for Hutchison's property division, Mr Li said Hutchison had sufficient land bank for future development.