The Hong Kong government had not discussed a mainland property developer's proposal to turn vacant Home Ownership Scheme flats into tourist guesthouses, ministers said yesterday. The Financial Secretary, Henry Tang Ying-yen, and the Secretary for Housing, Planning and Lands, Michael Suen Ming-yeung, moved to allay fears that unsold public housing flats would be passed on to private companies without open tenders. Local property developers have voiced concerns that the market could be adversely affected by the government's intervention. The government admitted that the mainland's biggest property development company, China National Real Estate Development, had put forward a proposal to buy about 20,000 flats. About 25,000 vacant HOS flats have been stockpiled since November, when the government suspended sales of the subsidised flats to low-income families. Speaking in Cancun, Mexico, Mr Tang said that the government would not resist mainland and overseas investment in Hong Kong but he refused to comment on the mainland company's proposal. The government had not discussed the proposal or the price, Mr Tang said, but intended usage would be the criteria when the administration considered any sale of the flats. Mr Suen said the mainland firm had made a 'preliminary introduction' of its ideas to the government but nothing substantial was discussed. 'Of course we have discussed questions of principles,' Mr Suen said. 'We would be open and we would definitely go through a public bidding process if the flats are to be sold. There is no question of bargaining.' Whether the firm's proposal was viable - including legal, planning and transportation issues - still needed to be studied.