Sun Hung Kai Properties (SHKP) will get a special discount in land premium for a Sha Tin residential project due to expected huge outlays on complicated road works. Lands Department deputy director John Corrigall made the announcement but did not indicate the value of the land premium, nor the proposed discount rate. Analysts estimated the premium could be more than HK$600 million and that SHKP had asked for a discount of not less than 20 per cent. The settlement might not be booked into this financial year's accounts, Mr Corrigall said, because the reassessment would take several months. SHKP revived interest in negotiating with the Government about the project's land premium, following last month's settlement of a basket of premiums. Premiums for seven projects were settled at HK$2.1 billion. Some years ago SHKP secured planning approval to develop a total floor area of 742,000 square feet on three adjacent agricultural lots near Tung Lo Wan Hill Road, Sha Tin. It paid a land premium changing the land use to residential from agricultural. It also had to put in a link road to serve the isolated sites. Last week Mr Corrigall said SHKP raised a new argument in the premium negotiations - excluding expenditure related to the road works. As a result of this request the Lands Department would reassess the premium, taking the road works expenses into consideration. 'A new road passing through the valley is essential and the Government will take the cost of road works into account,' he said. The road construction was quite complicated and the department had to consult other professional departments for a reassessment of overall expenditure. Last year, it was reported the Government made a HK$900 million-premium offer to SHKP. This represented an accommodation value of about HK$1,200. SK Pang Surveyors managing director Pang Shiu-kee estimated the latest accommodation value at about HK$900 per square foot, accounting for a 25 per cent cut. Mr Pang said it was not common practice for the Government to reduce the land premium for developers because of the additional cost of building a road. 'It depends on whether the road exclusively serves residents of the development,' he said. Meanwhile, the Government has been asked by Mass Transit Railway Corp to deduct HK$1.3 billion from the land premium for a huge housing project at Area 86, in Tseung Kwan O, to cover the cost of building public facilities including seven schools and a community centre. A surveyor said the Government had, in fact, made great concessions in calculating land premium after the September 11 terrorist attacks in the United States. In the aftermath of the incident some developers had been granted a 20 per discount, he said. Earlier, Mr Corrigall confirmed the Government reduced land premiums after September 11, based on the market situation. He declined to disclose details.