Cyberport sales give $1.67b windfall

Government will add the money to this year's accounts, reducing the deficit

The government has received its first payment from the controversial Cyberport development, netting $1.67 billion from the sale of half of the project's residential units.

In a joint announcement yesterday, acting Financial Secretary Frederick Ma Si-hang and PCCW deputy chairman Jack So Chak-kwong said they would split the $2.59 billion surplus proceeds from the first batch of presales of Cyberport's residential units. PCCW, which holds a 35.5 per cent stake in the project, receives $920 million.

Mr Ma said the proceeds had not been included in the government's original 2004-05 budget estimates. They will now be added into general revenue accounts for the current fiscal year and should help ease the government's budget deficit, which stood at $17.04 billion as of June 30.

A total of 1,460 units have been sold, leaving about 1,340 units in stock. The government will collect further payments every quarter until the entire project is completed by mid-2007.

The first payment covers only a small fraction of the $12.3 billion that the government and PCCW have invested in the project, however. The government invested $7.93 billion through its land contribution, and PCCW added $4.372 billion in cash.

Refusing to comment on whether the entire investment would be recovered from sales proceeds, PCCW's property development arm - Pacific Century Premium Developments - is upbeat on the outlook for the local property market, and has decided to delay sales of new units until next year in the expectation of achieving higher prices.