Shanghai threatens to repossess sites left idle by developers

Shanghai's municipal government has threatened to repossess eight undeveloped sites, including one owned by former Hong Kong chief executive Tung Chee-hwa's family, in a bid to prevent developers hoarding land to boost prices.

The Tungs' Orient Overseas (International) bought the site in Xuhui district through public tender in 2005.

Stanley Shen, responsible for investor relations at OOIL said the firm had not received any notification from the city government, adding that the land fee had been fully paid.

'Our project has not got off the ground because we are still waiting for government approval of the building plan. We are not hoarding sites,' he said.

He said OOIL changed the plan from a boutique hotel to serviced apartments last year and 'we had to apply for government approval again'.

Shen insisted there had been no requirement for a start or completion date on the project because the site was not vacant when OOIL bought it - it housed a recreation club. Only when the club was demolished did it become a vacant plot, he said.

However, the firm acknowledged that the government had the power to resume the land if the developer does not start work soon. 'Construction will begin as soon as we get the building approval,' said Shen.