Airport centre carries $4b price tag

PUBLISHED : Thursday, 08 November, 2001, 12:00am
UPDATED : Thursday, 08 November, 2001, 12:00am

The proposed convention centre at Chek Lap Kok is expected to cost HK$4 billion, according to a government report.

The Commerce and Industry Bureau, in a paper submitted to the Legislative Council, said a growing regional demand created the need for the centre.

The bureau said the airport site was the only one that could meet the 2005 target opening date and would bring significant benefits to the Hong Kong economy.

However, it said, while the centre could cover operating costs, the investment return would be below the cost of capital, sparking the need for government support.

The Government and the Airport Authority will enter into a joint venture and select a third party via an open international tender to develop the centre, which will span eight hectares on completion.

The Government has announced it will inject HK$2 billion into the centre as part of the SkyCity project.

The Airport Authority, in return for a 10 per cent stake, will supply the land for the first 10 years of the centre's operation. It will lead the entire development process and secure the infrastructure and transport facilities when the centre begins operations.

The authority will have to forgo revaluation of the land during further development and upon expiry of the initial 25-year term.

The private-sector consortium will distribute income above the preferred rate of return specified in the tender among the three parties according to equity contribution ratios.