No survey carried out before tender for Cheung Kong project
The government did not survey the exact size of the former Marine Police headquarters when it was sold to property giant Cheung Kong (Holdings), Secretary for Development Carrie Lam Cheng Yuet-ngor told lawmakers yesterday.
Instead, officials relied on estimates based on a consultant's report commissioned by the Planning Department.
Lam made the disclosure yesterday at the Legislative Council's development panel meeting. She said the planning brief and the tender document for the project were based on a floor-plan estimate.
Lam said property giant Cheung Kong did not have to pay a land premium for the 1,310 square metres of bonus gross floor area it gained. This contradicted an earlier government statement that Cheung Kong paid the necessary land premium for the extra floor area.
The HK$94.5 million Cheung Kong paid last year was merely for the extra 200-square-metre gross floor space it gained from the site's new development.
Several lawmakers from the pan-democratic camp expressed disbelief that the government did not conduct a survey before the tender, calling it serious negligence.
Conservationists cited the project as an example of what could go wrong with the government's plan to auction the West Wing of the Central Government Offices for commercial development.
The South China Morning Post reported yesterday that tycoon Li Ka-shing's flagship company Cheung Kong gained an unexpected bonus in its redevelopment of the historic former Marine Police headquarters in Tsim Sha Tsui: an additional 1,310 square metres of valuable floor space not counted in the planning brief and brief to the Legislative Council.
When Cheung Kong subsidiary Flying Snow won the tender in May 2003 by paying HK$352.8 million to revitalise the abandoned Grade I monument, the floor space in the existing buildings was estimated at 4,300 square metres.
But building plans displayed for public inspection after the completion of the project, now named 1881 Heritage, showed the existing buildings contains 5,610 square metres.
Cheung Kong paid HK$94.5 million in March last year for extra floor space it gained in new construction for the project, when the city was in the midst of the global financial crisis.
In a written reply to the Post, the Lands Department said 'the quoted land premium reflects the enhancement in the value of the land under the previous concept plan and the new concept plan'.
But the development chief ruled out Cheung Kong's duty on paying land premium on bonus gross floor area (GFA). 'This was a technical amendment based on a detailed survey, reflecting the actual GFA of those historical buildings ... no additional premium could be levied on such a technical rectification.'
Lam said the planning brief was based on a study in 2001 on the project's development potential. 'No measurement was conducted in those days because the consultancy report estimated the existing buildings had 4,300 square metres of GFA.'
Legislator Cyd Ho Sau-lan criticised Lam's answer.
'The problem is who decided there was no need to conduct a survey on a piece of government land when the tendering exercise had commercial elements in it?'
