The Yew Chung Education Foundation is seeking to acquire the Kowloon Tong site of the defunct Canadian Overseas International College to expand its primary section. The foundation began negotiations with the site's owners after the financially-troubled school folded last weekend. The Kowloon Tong site remains vacant after the English Schools Foundation (ESF), with support from the Government, agreed this week to run a new private independent school (PIS) for the affected students and teachers at a campus formerly occupied by the Australian International School in Cheung Sha Wan. Named Phoenix International School, it will be the first PIS school to begin operation. The ESF is building a permanent campus in Ma On Shan and is likely to move students to the new site in 2004. Winnie Cheng Wai-yee, assistant director of the Yew Chung Education Foundation, said the organisation had planned to build another primary school in Kowloon Tong. 'We need more space and that site is ideal as it is close to our two kindergartens,' said Ms Cheng. The foundation operates 10 international schools in Hong Kong, the mainland and the US. It will have an increased presence in Kowloon Tong with plans to move its current secondary school in Caldecott Road, Piper's Hill, to a newly allocated site next to the MTR station. Police are investigating suspected fraud at the Canadian school. The collapse of the school and the bleak economic climate has led to concerns among politicians about the international school sector. The international section of St Paul's Convent School closed in August for unknown reasons. Other schools, however, are still reporting increased enrolment. Principal of the Korean International School William May said his school had places on offer in some grades. Like others with overseas government links, it would not be seriously affected if vacancies increased because it was supported by the Korean Government and private companies. The market for international school places may shrink as more firms lay off staff or relocate to the mainland. But Mr May believes the sector can count on demand from parents unhappy with the large class sizes and teaching practices in local schools. 'They also think the reform will not make much difference,' he added. Principal Jack Saddler of the Delia School of Canada said the school accepted students throughout the year, explaining an extensive media campaign advertising places. It adopted a semester-based credit system, under which students could graduate at the end of a semester instead of a school year. He is undaunted by the competition, which will increase when the seven PIS schools that have so far been awarded sites open. 'It depends on the desires and needs of families and also how many expatriates come to Hong Kong. It will be a matter of survival of the fittest,' he said.