Secrecy over Kai Tak cruise terminal generates waves of questions
'The consortium chosen to develop a cruise terminal at Kai Tak will have the right to operate the terminal on the former airport site for more than 30 years.'
SCMP, October 19
PERHAPS WE'LL GET around to building it then before those 30 years are up. Chief Executive Donald Tsang Yam-kuen had been expected to present details in his policy address last week but no luck and the leaks we are now getting are still very short on detail.
Mr Tsang's reluctance is understandable. He has come a cropper on this idea once already. In his 1999 budget speech as financial secretary, he announced approval in principle of a cruise terminal in North Point to be built by a private developer.
That developer was tycoon Li Ka-shing but nothing came of the idea, perhaps because of the ruckus caused by the announcement in that same budget speech of another land grant (Cyberport) made without auction or tender to a member of Mr Li's family. It was just as well perhaps as North Point is not the right place.
Last year the government invited expressions of interest in the construction of a cruise terminal and got six replies. Only one of them proposed a terminal at the Kai Tak site, although Kai Tak had already been highlighted as a government preference. The others generally picked locations more convenient to their existing land banks. All were rejected.
The key date is now 2012 because this is the expiry date of Wharf Holdings' 50-year land grant on the existing terminal at the tip of the Tsim Sha Tsui peninsula. The location has been ruled out for a new terminal and the government will take the site back.
Thus Kai Tak it is to be and, judging by the latest version of the Kai Tak redevelopment plan, the terminal will feature two berths at the end of the old runway on a total of 13.3 hectares with related hotel, retail and entertainment facilities.
And now come the questions:
What is this mention of a consortium? There is no reason why it has to be a consortium. A single developer might do the job just as well, in fact perhaps better. Do we have a consortium stipulated because the government was embarrassed by proposing the single developer route for the West Kowloon Reclamation project and then had to reconsider?
Has this consortium already been formed or invited to bid for the project? There would normally be no reason to raise the question except that our government has an occasional habit of putting the cart before the horse in this way for big projects. Witness Cyberport and that North Point cruise terminal idea. There are other examples.
If no consortium already has the nod, how will the project be tendered? We are told that this is to be a 30-year build, operate and transfer project, which implies that the winner covers the cost of construction and operation, runs it for 30 years and then turns it all over to the government. Are we to have a completely open tendering process for this? Have we invited foreign terminal operators to participate?
Will the public purse get a share of the operating revenues? Thirty years is a mighty long time. Let's spare ourselves the embarrassment of awarding the project for one low lump sum and then seeing the winner generate profits of billions a year, all of which he keeps.
What about the land element? Will the winning bidder get the land for free and have to cover only the cost of constructing the facilities or will he have to pay a commercial price for the land? The land could be the single biggest cost element and we give land away for free much too easily in this town.
What about the hotels, retail and entertainment facilities? These facilities will be the biggest revenue drivers and there will be plenty of room for them. A site area of 13.3 hectares translates to 1.43 million square feet and this is site area, not floor area. Will these facilities also revert to the government in 30 years or will the developer keep them?
Has anyone in government yet obtained firm commitments from cruise line operators? Hong Kong has never been a big destination for cruises. Passenger arrivals from seagoing vessels amount to only 375,000 a year, a bare 0.38 per cent of all arrivals. How can we be sure that people will really come? New York demanded big multi-year passenger commitments from cruise operators before it built a terminal.
There are plenty more good questions among these lines and I am sure government officials will tell us that they will all be answered in good time. Trouble is, however, that good time does not always mean good answers and there is often nothing we can do about them any longer by that time.
This project appears a little too secretive for my liking in the way that only dribs and drabs of news on it have come out.
We need the terms and conditions clearly and fully stated now.