Three interesting decisions on property have come from the Financial Secretary Donald Tsang Yam-kuen this week, two of them likely to save him money, one to lose. The loser is that great white elephant, the Disney deal to build a theme park on Lantau Island, and in these protracted negotiations he has finally chosen to employ that old poker player's tactic, the bluff. Disney has until the end of this month to take it or leave it, he says, because that's the end and other people such as Universal Studios are knocking on the door anyway. Well, in poker you can never be sure and if Disney decides it is a bluff when it isn't then we will have a case of Disney takes the Mickey out of Donald's magic kingdom (sorry, couldn't resist that line). But whether Disney now does the deal at 10 minutes before midnight on October 31 or whether it then goes to Universal Studios, we are apparently still to be lumbered with a hugely expensive circus project on prime land that could be much better put to other uses. This one remains a loser. A possible winner is Mr Tsang's remark in Singapore on Wednesday that he has reservations about allocating 200 hectares of land for a microchip manufacturing plant in the New Territories. This one, Silly-con Harbour, is purportedly sponsored by the big United States venture capital firm, Hambrecht & Quist, but you may have reason to wonder how solid the backing of the name is. It seems mostly to be an idea put up by a small Taiwanese industrial punter who has convinced H&Q to allow him to use its name. Mr Tsang's objections are that Hong Kong is not suited to high-technology manufacturing and it is an awful lot of land to give away. But an easy solution offers itself here. We have 180 million square feet of industrial space, almost all of it redundant now and prices are so low, little more than $600 a square foot, that they exceed the cost of construction, which means that the underlying land, if it remains assigned to industrial purposes, is essentially valueless. Tell this supposed H&Q offshoot to pick up some of this industrial space for its plant. It will never do it. It wants an easy sweetheart deal but its bluff is easily called. More than that, however, Mr Tsang seems to have sent his boss, Chief Executive Tung Chee-hwa, a message here that he had better think again. The boss is not a professional government man and it means something when one of the professional subordinates speaks up against an idea the boss likes. He also seems to have spoken up against a third idea the boss likes, although we cannot formally pin his name to it yet. This one was the announcement in Mr Tung's big policy speech that the newly formed Urban Renewal Authority (URA), which is to clean up urban blight with new developments, will waive lease-conversion premiums for redevelopment projects. The original idea was that developers would move into areas of blight with the authority of the URA behind them and negotiate directly with owners, who would not need to be forced by the stick of the URA when they had the carrot of getting all the redevelopment value of their land instead of paying most of it away as premiums. But apparently there was an eruption in the civil service about this. Land sales and land-premium income are the Government's biggest source of revenue and a time of record financial deficit is no time to give money away. So what we have now is a proposal that the URA will take direct charge of land resumption and site formation and then sell the sites to developers through auction. Tough luck for the owners. They won't be keeping that premium difference this way. We shall call it another message from Mr Tsang to Mr Tung - 'I've told you before, sir, and I'll tell you again. Don't you dare talk money without talking to me first.' Yes, it was an eventful week in property.
