CY scheme to shorten land premium negotiations is open to graft, lawyer says
Arbitration aimed at saving time in land premium negotiations would not be binding and would invite corruption, arbitrator and surveyor warns
An arbitrator and a surveyor has cast doubt on a pilot scheme to bring arbitrators into negotiations over the premiums developers must pay to rezone land.
The scheme was announced by Chief Executive Leung Chun-ying in his policy address earlier this month, with the aim of shortening land premium negotiations - during which a developer can sit on land set aside for redevelopment for years.
Research by the shows a significant drop in the number of such redevelopment cases - involving lease modifications or land exchanges - over the past decade, from more than 60 in 2003 to about 20 last year.
According to officials, instead of waiting for a developer to accept a proposed premium, the government would invite an independent arbitrator or surveyor to suggest an amount that would satisfy both sides. But developers would have to consent to using an arbitrator.
The idea has been challenged by Daniel Lam Chun, a former chairman of the Hong Kong Institute of Arbitrators and a council member at the Hong Kong International Arbitration Centre.
He said it was wrong to label the scheme arbitration and warned the process could be open to corruption.
"Arbitration cannot be applied in this case as disagreement over the amount of land premium is not based on any contract or agreement," Lam said. "You can only call it an expert's determination, which is far less effective and reliable."
