LCQ7: Railway property development projects
Following is a question by the Hon Wong Kwok-hing and a written reply by the Secretary for Development, Mr Paul Chan, in the Legislative Council today (July 9):
Railway property development is a major source of housing supply in Hong Kong. However, the Secretary for Development pointed out early this year that the MTR Corporation Limited (MTRCL) failed to tender out any property development project in the past three years. In this connection, will the Government inform this Council:
(1) whether it knows the reasons for, and the relevant details of, MTRCL's failure to tender out any property development project in the past three financial years, and set out in a table the location, site area and number of residential units that can be provided in respect of each of such projects;
(2) whether it knows the property development projects that MTRCL plans to tender out in the coming five financial years, and set out in a table the location, site area and number of residential units that can be provided in respect of each of such projects;
(3) given that the tendering exercises for the property development project at Light Rail Tin Wing Station in Tin Shui Wai have failed twice, whether the Government has conducted any feasibility study on changing the use of the site concerned for the development of subsidised housing; if it has, of the details (including the expected number of residential units to be provided) and when the study will be completed; whether it will discuss the matter with MTRCL; if it will, of the details and the amount of payment involved for buying back from MTRCL the property development right concerned; if not, the reasons for that; whether it will in future request MTRCL to sell to the Government, for development of subsidised housing, the property development rights of those property development projects for which tendering exercises have failed for two or more times; if it will, of the details, and whether it will draw up the relevant criteria in this regard; if not, the reasons for that;
(4) whether it has requested MTRCL to improve the tendering arrangements so as to expedite the tendering out of property development projects; if it has, of the details; if not, the reasons for that; and
(5) whether it will consider buying back from MTRCL the rights for development of certain property development projects; if it will, of the details; if not, the reasons for that; whether it has conducted any study in this regard; if it has, of the details and the expected completion time for the study?
I reply to the five parts of the question as follows:
(1) As a listed company, the MTR Corporation Limited (MTRCL) has the discretion in taking forward the property development projects of which the development right rests with the MTRCL. Between 2011-12 and 2013-14, the MTRCL tendered its own property development projects at Tai Wai Station and Tin Shui Wai Light Rail Terminus, but the tendering was unsuccessful. In 2013-14, the MTRCL successfully tendered its own development project at Tseung Kwan O Area 86 (Package 4). The information about these three projects is at Annex A. The market response to the property development projects tendered by the MTRCL may be affected by a couple of factors, such as the bidders' outlook for the property market, their own development strategy and commercial considerations, etc.
(2) According to our understanding, the information about the railway property development projects owned and being planned by the MTRCL is at Annex B.
(3) The development right of the property development project at Tin Shui Wai Light Rail Terminus is owned by the MTRCL. We understand that the MTRCL is exploring the way forward for this project. As regards this project and other railway property development projects of which the tendering is unsuccessful in future, the Government will consider any proposal involving the Government based on its merits.
(4) and (5) The granting of property development rights to the MTRCL by the Government in the past is to provide funding assistance to the MTRCL for its construction and operation of railway projects (i.e. "Rail + Property" model). Under this model, the MTRCL is responsible for the development costs of the property development projects concerned as well as the costs of construction and operation of the railway projects concerned. The MTRCL has to bear the risks of financing the projects and operating the railways. Apart from the above, the MTRCL also acquired property development projects from the Kowloon-Canton Railway Corporation under the merger package in the rail merger in 2007.
The MTRCL acquired the development rights of the projects set out at Annex B through the above means. These property development projects are planned and implemented by the MTRCL, including the setting of the tender conditions on its own (except government land grant conditions). The Government will continue to communicate with the MTRCL on the implementation of its property development projects. As mentioned above, the Government will consider any proposal involving the Government based on its merits.
Ends/Wednesday, July 9, 2014
Issued at HKT 14:30