Union Hospital got HK$300m from developer for flat site

Union Hospital received up to HK$300 million for giving part of its site to Henderson Land to develop a luxury property project, the hospital chief admitted yesterday.

Chief hospital manager and medical director Anthony Lee Kai-yiu said the land transaction took place because the private hospital in Sha Tin was facing financial difficulty as a result of poor demand in the 1990s, when the government spent heavily to strengthen the public hospital system.

"At the time, the operation was difficult. We [also] studied transforming the hospital into an elderly home or for other purposes," Lee said in a Commercial Radio programme. He said the hospital was given between HK$200 million and HK$300 million for the transaction, and the money was to develop the hospital. "Private hospitals are investments," he added, stressing that the hospital was not built on free land.

But critics questioned how the 1.92-hectare site - which was first acquired for health use by the hospital operator for HK$60 million in 1982 - could be turned into luxury flats. The Director of Audit had on Wednesday issued a report criticising the government for not monitoring whether operations of private hospitals were in line with the conditions stipulated in their land grants.

Although the land was acquired in the early 1980s, Union Hospital started operating only in 1994, providing about 410 beds. But the hospital operator has repeatedly made applications to the authorities to embark on property development on the site since 1986.

That year, it wanted to turn the whole site into flats. It was only 15 years later in 2001 that the authorities finally approved about half the land on the site to be made available for property development.