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Hambrecht & Quest Asia Pacific may substantially scale down its US$1.2 billion Silicon Harbour project in an attempt to reach an agreement with the Government next month, according to the venture-capital company.

 Chairman Hsu Ta-lin yesterday said the size of the proposed technology hub could be reduced to an initial site of 20-30 hectares from the original plan of 200 hectares.

 Additional hubs of similar size on sites scattered around the SAR could be built later, he said.

 'Originally, we planned to build a big hub just like those technology parks in Taiwan and Singapore,' he said.

 'Now we are considering to divide that big hub into several smaller ones at about 20 to 30 hectares each.'  The first scaled-down hub would be able to accommodate 150 to 200 companies, Mr Hsu said.

 H&Q Asia, a subsidiary of United States-based investment bank Hambrecht & Quest, had only asked for a discount on a land lease from the Government, contrary to reports it required generous land and tax breaks, Mr Hsu said.

 The company had never asked for any substantial land grants to be made by the Government, he added.

 'Since the rents of industrial land here are not high, we only expect a little discount on the lease,' he said.

 Mr Hsu said he believed an agreement with the Government could be made early next month.

 Nine strategic partners have already been lined up for the project, he said.

 Nonetheless, Government officials have been reluctant to endorse it.

 In October, Financial Secretary Donald Tsang Yam-kuen said he was 'scared' that such a large tract of land was required for the project.

 Mr Tsang said Hong Kong was a suitable place for software development, but he questioned whether a labour-intensive industry such as semiconductor manufacturing could be successful in the SAR.

 In another indication the Government may not be fully behind the project, Secretary for Trade and Industry Chau Tak-hay last month said he had reservations about land and tax concessions reportedly sought by H&Q Asia.

 Yesterday, Mr Hsu argued software companies would still be attracted to take space at the hub despite its focus on the semiconductor manufacturing sector.

 'We have always emphasised the software industry,' Mr Hsu said.

 'Over 70 per cent of our investments in Asia are software-related.'  Meanwhile, HelloAsia.com, of which H&Q Asia is the largest shareholder, yesterday launched an e-commerce and promotion portal in Hong Kong which it has called asiarewards.com.



Silicon Harbour plan set to be scaled down for Government nod