MTR Corp says Central harbourfront site bid did not involve government board members to avoid conflict of interest

MTR joined Wharf REIC and Chinachem Group consortium to bid for the prime Central harbourfront site
Board members with conflict of interest were excused from the part of the meeting at which the project was discussed and the decision to submit a bid was taken

Hong Kong MTR

Sandy Li

Published: 6:30am, 21 Jun 2021

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Government board members were absent from meetings related to the discussion and decision to bid for a prime site in Central, the MTR Corp said to allay public concerns about conflict of interest.

The rail operator and property developer, in which the Hong Kong government holds a 75 per cent stake, issued a statement in response to media queries over potential conflict of interest after it said it had taken part in the government land tender for the New Central Harbourfront Commercial Site 3. The decision to bid was based on purely commercial consideration, it added.

It was the first time since the MTR’s formation in 1975 that the company had taken part in a government land bid. It formed a consortium with Wharf Real Estate Investment Company, a unit of the Woo family’s Wheelock and Company, and Chinachem Group, to submit a bid for the plot.

“When the decision to submit a bid for the project was deliberated by the MTR’s board of directors, those board members who had an actual or potential conflict of interest in the project (including all government board members) did not receive the relevant board papers and were excused from the part of the meeting at which the project was discussed and the decision to submit a bid was taken,” the MTR said on Saturday.

The Central harbourfront site is estimated to fetch between HK$37 billion and HK$55 billion. Photo: Martin Chan

The site, which can yield 1.61 million sq ft of gross floor area, has been valued at between HK$37 billion and HK$55 billion (US$7.1 billion). It is likely to set a record as the most expensive in the city’s history, according to property consultants.

MTR said that as this was a landmark project located in Central, next to Two International Finance Centre (IFC2) which was developed and managed by the company, “it will bring synergies to the company’s existing business and further reflect the MTR’s community development experience in Hong Kong.”

MTR, which owns the land, jointly developed the IFC2 as part of a consortium led by Sun Hung Kai Properties and Henderson Land Development.

MTR said that its bid partners Wharf REIC and Chinachem Group have their own strengths and bring synergies to the project’s development and management.

MTR’s board members include Secretary for Financial Services and the Treasury Christopher Hui Ching-yu, Secretary for Transport and Housing Frank Chan Fan, Commissioner for Transport Rosanna Law Shuk-pui and Permanent Secretary for Development (Works) Lam Sai-hung.

Under the government’s “two envelope” approach for the sale of the Central harbourfront site, submitted bids will be weighed equally for design and price.

The 516,316 sq ft plot that includes the General Post Office has attracted six bids from some of Hong Kong developers owned by the city’s wealthiest families.

Other bidders include Sun Hung Kai Properties, Hong Kong’s largest developer by market value and controlled by Kwok families. CK Asset (Holdings), one of the two flagship companies owned by Hong Kong’s richest tycoon Li Ka-shing. Henderson Land, founded by the second-richest tycoon Lee Shau-kee is also taking part. Sino Land, controlled by the family of Robert Ng Chee Siong, submitted a joint bid with Great Eagle Holdings of the Lo family, as well as the Chinese state-owned enterprise China Merchants Group.

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