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Vivian Au

Some of the 100 companies showing interest in a Hong Kong pilot scheme for developing large land parcels in the Northern Metropolis have raised concerns over the projects being awarded to the highest bidder amid the sluggish economy, as the policy will favour firms with more capital.
A source from a firm that attended a briefing session on the scheme also said the project details were not attractive enough due to the high investment required.
During the session on Thursday, the Development Bureau laid out details and development requirements of the three plots earmarked for the large-scale land disposal scheme. It also introduced an execution model to help interested parties decide how to use the land.
Nearly half of the companies that attended the briefing were believed to be from mainland China, according to the source.
But some developers did not agree with the tendering process.
“The tender will be awarded to the highest bidder and the government has confirmed that it will not provide any discounts or incentives to attract companies,” the insider said.
He said that companies needed to invest a substantial amount of money given how large the land parcels were, adding the project was not very appealing because the government had not offered discounts.
“I believe the government may need to make significant changes to attract companies,” the insider said.
The government has adopted a “two-envelope” approach, which assesses both price bids and design proposals from developers, for some other projects in the Northern Metropolis, rather than simply awarding to the highest bidder.


Under the pilot land disposal scheme, developers would need to conduct site formation work and build public facilities for the government while retaining the private residential sites for profit.
The government blueprint aims to transform 30,000 hectares (74,130 acres) of land in the New Territories, near the mainland border, into an economic powerhouse and housing hub.
Another source added that some companies questioned how similar industry-oriented land in Shenzhen was sold for less than HK$100 (US$12.84) per square foot, which was much cheaper than in Hong Kong.
Last year, 85 business heavyweights pledged to support and participate in the Northern Metropolis blueprint, after Beijing’s point man on Hong Kong affairs, Xia Baolong, called on business leaders to take “concrete actions” in supporting the city’s development.
The pilot scheme reserves three parcels of land between 10 and 20 hectares, including an 18.6-hectare site in San Tin, one-third of which will be dedicated to private housing.
A parcel in Hung Shui Kiu measures 12.5 hectares, with two hectares designated for private residential purposes, while the remaining plot in Fanling North involves 16 hectares, with three hectares allocated for private flats.
The Development Bureau said the firms that attended the briefing represented various industries, including developers, banks and financial institutions.
“The response of the companies has been positive and we welcome companies to share their suggestions in the expressions of interest,” the bureau said.
The bureau earlier indicated that each parcel was expected to involve a development cost of between HK$10 billion and HK$20 billion. But the cost of the work done for the government could be deducted from the land premium.
Lawmaker Andrew Lam Siu-lo said that whether the government would make changes to the tender plan depended on the final results of the expressions of interest.
Last December, the government launched a three-month exercise to invite interested parties to submit expressions of interest for the project.
Lam added that even though the tender was based on an open tendering process, in which the highest bidder would get the land, there were still “flexible payment” plans.
“I believe that there is room for the government to adjust the terms of the tender,” he said.


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Hong Kong housing

The government blueprint calls for turning 30,000 hectares of land into an economic powerhouse and housing hub. Photo: Eugene Lee

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Secretary for Development Bernadette Linn says an agreement signed last month aimed to unite efforts and promote the project near the border with mainland China. Photo: May Tse

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Financial Secretary Paul Chan has updated the deficit forecast to “hit somewhere about under HK$100 billion”. Photo: May Tse

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Government will award the tender to the highest bidder without providing discounts or incentives to attract companies, source says


Government will award the tender to the highest bidder without providing discounts or incentives to attract companies, source says.


Northern Metropolis

Hong Kong economy

Hong Kong property