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Development Bureau responds to media enquiries on open tender exercise for the observation wheel site in new Central harbourfront

In response to media enquiries on the tender exercise for the short-term tenancy (STT) of the observation wheel site in new Central harbourfront, a spokesman for the Development Bureau replied as follows today (September 3)  .

The Government conducted an open tender exercise for a new three-year STT of the observation wheel site in new Central harbourfront in November 2016.  After assessing various aspects including the experience, overall design for the site, daily operations, ticket pricing and community participation programme of tenderers, the Government announced on May 23 that a new operator (The Entertainment Corporation Limited) won the tender.  The new operator has fared better than the other tenderer in terms of its technical submission.  In particular, its ticket pricing has a clear competitive edge.  The open tender exercise was conducted according to the procedures as stipulated in the Government's "Stores and Procurement Regulations" and the tender result was also endorsed by the Central Tender Board.  

In accordance with the Amusement Rides (Safety) Ordinance, observation wheel is a kind of amusement rides that relevant permit under the said Ordinance is required before its operation.  The tender specifications have required tenderers or responsible persons of the tendering firms to have at least 12 months of experience in planning, operating and managing observation wheels or theme parks/carnivals with amusement rides.  The responsible person of the new operator fulfils such a requirement. 

According to the tenancy agreement, the operator should set up, operate and manage its observation wheel in accordance with its technical proposal submitted during the tender process.  Included in the technical proposal of the new operator is an undertaking to build an observation wheel with a diameter of 55 metres.  The tenancy agreement has provisions allowing the new operator to continue using the existing wheel.  However, since the purchase of the wheel is a commercial decision between the two operators, the Government has not mandated the use of existing wheel by the new operator. 

After the announcement of the tender result, the Government has received from the new operator a deposit amounting to six months of rent.  The Government has also maintained contact with both operators with the hope of assisting their communications on interfacing issues.  We understand that both parties have been discussing about the purchase of the wheel and other facilities within the site.  However, since the Government has not been involved in the commercial discussion between the two parties, we would not comment on the commercial operation and financial arrangement involved in the discussion.  

Since the last operator lost the tender, it cannot renew the tenancy for the operation of the observation wheel upon the termination of its original tenancy.  The last operator must complete all the demolition and reinstatement works within the wheel site by October 31 so that the site could be handed over to the new operator.  Notwithstanding the last operator's request to the Government about re-opening the observation wheel, unless it could reach an agreement with the new operator to retain the wheel, it is responsible to commence the works for timely return of the site.  In fact, the Government has already approved the last operator's application for relevant permits for such demolition and reinstatement works. 

Once the site is handed over to the new operator, the new three-year tenancy would then commence.  If the operator is building a new wheel, the timing for commencement of wheel operations will depend on when the new operator could attain relevant permits and licences.  While the works process and licence application are underway, the new operator could also provide ancillary facilities or organise events within the site in order to enable early public enjoyment of facilities therein.

Ends/Sunday, September 3, 2017
Issued at HKT 15:53

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