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SCMP Reporter

WHEN the Government vowed to curb property prices by increasing land supply, it also invited a new influx of multi-billion dollar infrastructure-linked development projects from the major property players.

  Analysts believe developers will dust off proposals which have been shelved for various reasons over the last few years and re-package them for re-submission.

   ''It is logical for the developers to take advantage of the Government's attempt to adopt a more flexible approach towards land supply and allow the private sector to contribute to infrastructure build-up in large-scale housing projects,'' said Nichols Pang of Crosby Securities.

  Sitting on huge profits, these local developers have long been keen to find property-related investments in Hong Kong.

   High on the agenda are likely to be the three massive rail projects by Cheung Kong and Sun Hung Kai Properties which also involve massive property development along the routes.

  Last February, Cheung Kong submitted an $8 billion project which involved building a 16-kilometre railway linking central Kowloon and the northeast New Territories.

  It was proposed that at least four railway stations along the planned route be earmarked for property development, which would render the transport project a viable business venture.

  A similar venture was attempted by Sun Hung Kai Properties which proposed to build a 19 km elevated rail system connecting Kowloon and Sai Kung via Sha Tin, and another road system from Ma Wan to northern Lantau.

  The project was expected to cost between $7 billion and $8 billion, with about seven stations which would be involved in property development.

  Bureaucracy and concern about whether developers would be reaping huge profits from these ventures are understood to have been partly responsible for the long delay in processing the projects.

   One example is the elevated rail project proposed by New World Development which aimed to connect Tsim Sha Tsui to Hunghom. Although little property development was involved, the project ultimately fell through due to environmental problems.

  But analysts said that, with growing pressure to accelerate property development in order to ease the housing shortage, the Government would have to take a second look at proposals from the developers.

  Also, it is expected that infrastructure-linked projects in the northwest New Territories will have a better chance of success given the determination to open up that part of Hong Kong as the major source of land supply over the next few years.

  FMD Talents Surveyors Ltd director C. K. Chan said urban property projects were to a large extent governed by the metro-plan which was the blueprint for the future development of Hong Kong.

 As building land is in short supply in the densely built-up areas of Kowloon and Hong Kong Island, major developers have long been making strong advances into the New Territories for new housing projects.

  Mr Chan said the metro-plan aimed to re-locate the population to the less densely populated New Territories and the Government should be giving serious consideration to any plans from the private sector which would improve transportation and build more homes. MEANWHILE, developers have been calling on the Government to apply more sophisticated means such as re-zoning and speeding up urban renewal projects to increase land supply, rather than just releasing large parcels of land in the New Territories.

  Over the last few years, companies including Hong Kong and China Gas and Shun Tak Holdings have proposed to convert two industrial sites into residential developments. But the proposals were subsequently rejected in favour of industrial projects.

   The project by Shun Tak is located in the densely populated Lai Chi Kok district and adjacent to the future Western Crossing, while the one by Hong Kong and China Gas in the old gas plant in Ma Tau Wai is less than five minutes' drive from the airport.

   It was suggested by some analysts that the Government should adopt a more flexible approach towards these kinds of projects rather than just stick to strict town planning rules.

   Despite the fact that the metro-plan was designed to improve Hong Kong's living environment, analysts said the Government should also address the population's desire to live near the city. In the past, the Government was seen to have been too rigid in its application of the town planning rules.

  In the cases of the Lai Chi Kok and Ma Tau Wai projects, both are located in the areas which are poised for significant improvement of transport and other infrastructure after the existing airport is moved to Lantau and the Western Crossing is completed.

    Mr Pang agreed a more flexible approach to land usage modification applications was needed, but said the twin problems of zoning and land premium remained.

 ''Re-zoning can involve a great deal of complicated procedures. Also, even when approval is given to the development, land premium could be another headache the developers have to deal with,'' he said.

  Although it is not expected to have a lot more land usage conversion applications in the short future, the Government's pledge to increase land supply nonetheless offers more scope for discussion over the land usage modification in the urban areas.

  In the past, utility companies such as China Light, Hong Kong and China Gas or Hong Kong Ferry, have not always succeeded in changing existing facilities into building projects. But these companies may now explore further opportunities for property projects in the light of the Government's land supply measures.



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