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Old April 4th, 2014, 02:06 PM   #1721
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HK's future might lie with Dapeng Peninsula
4 April 2014
China Daily

According to a leak from official discussions, Hong Kong had considered acquiring a piece of land in the Nansha district of Guangzhou. This land could be turned into a special region for Hong Kong.

Effectively, the geographical size of Hong Kong would be enlarged, and the extra land could be used for different purposes. It was reported that the government had suggested that the Nansha land be used for the elderly and for public housing. Nonetheless, there needs to be more decisions about this from the central, provincial and city governments - as well as the Hong Kong government.

The Nansha district is seen as a good choice because it is adjacent to Hong Kong. It takes about one hour by ferry from Tsim Sha Tsui and can also be reached by land. It is situated at the tip of the Pearl River and numerous economic activities can be conducted there. It offers considerable potential as an industrial base, an educational hub and a center for commercial and residential activities. There really is no shortage of opportunities.

However, one has to be pragmatic and examine all the administrative realities and territorial possibilities. Firstly, the land of Nansha is connected to other parts of Guangdong. The first question is territorial - and the possibility of creating a "border". Secondly, how should we treat residents of Nansha? Even if we consider people with household registration as residents of Nansha, the land connection would make it difficult to draw a clear cut division on the number of Nansha residents. Furthermore, the Pearl River area is already quite developed and the standard of living is at a fairly high level. The idea of Nansha seems similar to nearby developments in Qianhai, where much has been made about building a "new Hong Kong". Developments there can potentially be more rapid than in other areas.

However, even though its acquisition by Hong Kong could be attractive to local residents, the choice of Nansha would be complicated. The idea of looking for nearby land to be included into the territory of Hong Kong is a noble one. A good alternative is Dapeng Peninsula, which is situated on the east of Hong Kong - east of Tung Ping Chau. One clear disadvantage is it is close to the Daya Bay Nuclear Power Plant. However, there are numerous advantages there. One is that it is a peninsula like Kowloon, and the "border" can be structured along the S30 Huishen Coastal Expressway. Together with natural divisions by the Jingxin Reservoir in the middle and the Forest Farm in the east, the establishment of a "border" should not be difficult. The peninsula can also be reached by ferry through Tung Peng Chau across Mirs Bay to the western side of the peninsula.

The number of residents in Dapeng Peninsula is surely not as large as Nansha. The number can easily be checked through the household registration system. In short, the peninsula is a raw or rather less-developed piece of land that would be useful to the future and long-term development of Hong Kong. Even if the residents in Dapeng Peninsula are given Hong Kong resident status, land in the peninsula can be used for various purposes. Basic infrastructure that can be built includes airports and shipping terminals. But development could cover financial trading and banking, industrial development, waste disposal, agriculture, marine farming and new residential destinations. Since Hong Kong law is to be introduced, the area would be manageable, as the sea surrounding it is easier to define than land connections in Nansha.

One can think of "twin peninsula" development, with the abundant supply of new land to Hong Kong. Much new investment would be attracted to it, and population congestion in Hong Kong could be eased.

With the hypothetical acquisition of Dapeng Peninsula, economic development in Hong Kong would then become "two-sided". The western side would deal with development along the Pearl River region - competing with Shenzhen, Macao and Guangzhou. Development on the eastern side would be less competitive, as the pace of development in the peninsula would be managed and funded by Hong Kong. This would offer a much greater degree of flexibility in deciding the use of land resources in Dapeng Peninsula.

The establishment of the "border" would be similar to that currently practiced with Shenzhen. Other than the existing S30 expressway that connects Shenzhen with Dapeng Peninsula, some border checkpoints could be arranged. An entirely new expressway could be built to serve as a border between Hong Kong and Shenzhen.

If the Hong Kong government has a vision for the future of Hong Kong, securing more land from Guangdong with the permission of the central government would provide more development opportunities. In a few decades, the Dapeng Peninsula would become a second Hong Kong.

It is feasible to conduct a study on the Dapeng Peninsula to see how it could be turned into "Hong Kong land" economically, geographically, legally, administratively and financially. It could also be the responsibility of Hong Kong to develop the peninsula. Bonds could be issued to help finance its long-term development.

The late paramount leader Deng Xiaoping once remarked that the post-1997 Hong Kong economy should outperform the pre-1997 one. Such a remark showed his long-term vision. Given the pragmatic economic system of Hong Kong, easing the city's land shortage would produce tremendous opportunities. Dapeng Peninsula seems to provide a ready-made answer.

The author is associate professor of the Department of Economics and Finance at City University of Hong Kong.
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Old April 7th, 2014, 03:42 PM   #1722
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Hong Kong property experts call for new tack to lure shoppers
With competition growing from the region and change in buying behaviour of mainland visitors, the government is urged to increase retail space
PUBLISHED : Monday, 07 April, 2014
South China Morning Post

Hong Kong is still a shopping paradise, especially to residents from the Pearl River Delta, but a strategic plan for the next 10 years is urgently needed given growing competition from neighbouring cities and changes in the shopping behaviour of mainland visitors.

The government is being urged to increase retail space supply to allow more shopping facilities near the border control point at Lok Ma Chau to capitalise on growing commuter traffic in the delta region, according to property consultants.

They also raised attention to Macau. The territory's ability to replace Hong Kong as a shopping destination still seems unlikely, but the gaming mecca will see rising retail sales, which will attract more luxury brands as shopping facilities increase in the coming years.

"The retail property market in Hong Kong has enjoyed strong growth in the past 10 years, bolstered by the individual visit scheme, rather than the city's strategic planning. As the shopping style of mainland visitors changes, what is our strategy to keep our competitiveness?" asked Helen Mak, a senior director at Colliers International.

Mak noted a rise in less affluent mainland visitors and the change in tourist consumption from luxury goods towards mid-priced products - daily necessities such as beauty or personal care goods.

The mainland's political campaign against extravagance might have curbed luxury consumption, she said.

Hong Kong's retail sales fell 2.3 per cent from a year earlier to HK$40.5 billion in February, the first fall in value since August 2009, the Census and Statistics Department said.

The value of sales of jewellery, watches and clocks, and valuable gifts increased 5.3 per cent, down from the 10 per cent growth notched in January.

The increasing proportion of middle-class affluence is reflected by faster growth in the same-day visitor arrivals, according to Colliers.

In the first six months of last year, same-day visitors from the mainland accounted for 65.4 per cent or 8.26 million tourists and it is essential for the government to discover a new retail hub to capture the increasing demand for shopping facilities.

According to the latest report by the secretary for commerce and economic development, the city could see a 30 per cent increase in visitors to 70 million in three years.

The increasing number of tourists will strain infrastructure in the city centre. On the other hand, same-day visitors would not necessarily head for the city centre if all they wanted to buy were daily necessities, Mak said.

"The control point at Lok Ma Chau is one of the spots with the highest daily passenger throughputs and we believe the place should provide facilities to capitalise on the growing volume," she said.

"Renowned brands at discounted prices, last-minute gifts and utilisation of time are the factors to induce purchases at control points' retail stores."

The government also announced that Hong Kong Park, Victoria Park, Happy Valley racecourse and Kowloon Park are among areas initially selected for a pilot study on developing underground spaces.

Mak said improved infrastructure between Hong Kong and the Pearl River Delta had increased Hong Kong's competitiveness, leading to larger numbers of mainland visitors.

For example, when the Shenzhen-Hong Kong section of the Express Rail opens next year, travelling time from Shenzhen's Futian to West Kowloon Station would only take 15 minutes, she said.

Thomas Lam, the head of research and consultancy for Greater China at Knight Frank, said establishing a shopping centre at the border was a viable option to capture passenger traffic.

"Mainlanders' buying patterns have been changing. Those affluent and eager to buy luxury goods would have already visited Hong Kong in the past 10 years. Such visitors will drop and the buying list of luxury items will become shorter after their numerous purchases," Lam said.

"The good old days that rely on luxury items to boost rents are over. The retail property market has peaked."

Retail landlords also noticed the changes.

Stephen Ng Tin-hoi, the deputy chairman and managing director at Wharf, said after the company's recent result announcement the company wanted to attract shoppers from neighbouring countries to reduce the reliance on mainland travellers.

Instead of limiting the number of mainlanders visiting Hong Kong, Ng said: "We should come up with a solution to accommodate them."

For example, Wharf has converted some office space at Harbour City in Tsim Sha Tsui into retail space.

"It will help accommodate more retailers to meet the growing demand. We have seen positive results," Ng said.

Another challenge the Hong Kong market is facing is a dearth of variety in retail outlets.

High shop rentals have forced some long-established and distinctive retailers and restaurants out of prime shopping districts.

Joe Lin, a senior director of retail services at property consultancy CBRE, said: "Hong Kong can no longer rely on its existing superiority as an international city and gateway to [the mainland].

"We need to highlight its uniqueness as a retail hotspot, expand its tenant mix and also focus more on cross-border growth to remain competitive."

Hong Kong is ranked sixth among cities in the world that have the highest percentage of retailers at 40.5 per cent, according to a CBRE survey.

In 2012, many international brands expanded through branches in the city but the number declined last year, while Singapore and Vietnam saw increasing number of global retailers opening, according to Lin.

Hong Kong's retail industry remains heavily reliant on mainland visitors.

Ng said those clamouring for curbs on the influx of mainland tourists should be aware that other markets were keen to attract these big spenders. Macau is one of those cities.

Tom Gaffney, the head of retail at JLL Hong Kong, is optimistic of strong growth in retail sales in Macau, saying that 90 per cent of shoppers there came from the mainland.

Retail sales in Macau rose 25 per cent to 66 billion patacas last year while Hong Kong's grew 11 per cent to HK$494 billion.

Gaffney noted an increasing number of luxury brands, such as those selling watches, opening shops in Macau, attracted by strong sales and lower rents. In contrast, the expansion pace in Hong Kong slowed over the past few years.

New shopping centres were being built as part of casino developments in Macau catering to tourists, he said.

"As shopping facilities improve, fast fashion retailers such as Uniqlo and H&M are also eyeing the market there," said Gaffney. "Tenants receive good sales [in Macau] and the margins are much better."
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Old April 9th, 2014, 07:05 AM   #1723
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Better environment and rest breaks for workers
9 April 2014
South China Morning Post



Working in the bar-bending industry for half a century, Luk Kwan-ngai has witnessed many changes in the industry, in areas from environment and wages to safety.

“The working environment is safer and cleaner. It has improved a lot,” Luk said.

“Showering facilities, drinking water and temporary sunshades are all provided on construction sites. We now work about eight hours a day. We have two rest breaks – a 15-minute break in the morning and a 30-minute rest in the afternoon.”

During the colder months only the afternoon break is given, but last year the Construction Industry Council recommended that the morning break be added during summer months to help reduce heatstroke concerns in hot weather.

Site safety and health measures are among the efforts by the government and the private sector to attract manpower in the face of a shortage of construction workers.

“To attract young people to join the industry, we have tried to improve the working environment, such as providing more facilities, including showers,” Sino Land associate director Victor Tin Sio-un said.

Other initiatives include wage increases and improving the image of the industry, which has long been regarded as dirty, dangerous and lower-class.

“Five years ago, skilled bar-bending workers like me earned about HK$1,000 a day; now it has increased to about HK$1,800 per day,” Luk said. “We have seen newcomers, their ages ranging from 20 to 50 years old.”

Secretary for Development Paul Chan Mo-po said on his blog in January that the government would study and implement safety measures regarding high-risk work and refine guidelines on works and designs to enhance work safety.

Chan said more young people would be drawn to the construction industry with further improvements in site safety.

He said the accident rate for public works projects had dropped more than 80 per cent to 9.7 per 1,000 workers in 2012 from 56.6 in 1996.
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Old April 9th, 2014, 08:33 AM   #1724
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I'm in the City Planning hall now. So many projects on the horizon! Most of it has already been posted here of course but wow. Especially infrastructure-wise there is a lot to come.

Will post some construction updates later.
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Old April 9th, 2014, 11:15 AM   #1725
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Land sale review a wise measure
8 April 2014
South China Morning Post



There were mixed reactions when Leung Chun-ying sought to tame the runaway property market by introducing residency restrictions on land sales. Those eager to see prices come down praised him for shutting out speculators from the mainland. But for champions of the free market, the intervention was uncalled for. Controversial as it was, the restriction was an exceptional step during exceptional times. With the market appearing to be stabilising, a review is wise.

This is what the chief executive is doing. Having imposed the local-only conditions at two residential sites in Kai Tak last year, along with special stamp duties to dampen property speculation, the market is in better shape than two years ago. Transactions involving non-locals are down from double digits to only 2 per cent. That explains why subsequent land sales no longer come with residency requirements.

Intriguingly, this has been interpreted by some as a policy U-turn. Critics lashed out at Leung for failing to sustain his campaign promise of giving priority to locals. Some escalated it further to a governance issue, saying his policies lacked consistency, and likened it to the “85,000 saga” 16 years ago, when former chief executive Tung Chee-hwa was roundly criticised for dropping the annual flat production target without any announcement. Given the current political atmosphere, the criticism levelled at Leung is hardly surprising.

It is worth noting that the residency restriction was a pilot scheme. When Leung made his campaign promise, he made clear that it would be subject to the market situation. Since it was never meant to be a long-term policy, officials were arguably not wrong in saying there was no question of shelving it. When intervention is no longer warranted, there is no reason to continue just for the sake of continuity.

The controversy has inevitably turned the spotlight on the special stamp duties. As the land chief says, the levies are pivotal to a stabilised market. It makes sense to keep them for the time being lest the speculators return. But like the residency restriction, the levies are also market intervention. When the situation permits, they should be withdrawn.

Although the market is no longer as overheated as before, property prices are still out of reach for many prospective buyers. The government should step up efforts to increase land supply in the short and longer term. That is the ultimate way to provide affordable housing for the people.
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Old April 10th, 2014, 05:40 AM   #1726
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Hong Kong private home completions to reach 10-year high in 2014



HONG KONG, April 4 (Reuters) - The number of private home completions in Hong Kong this year will reach its highest since 2004, the government said on Friday, further pressuring developers after a series of cooling measures forced them to cut prices.

The number of flats forecast for completion in 2014 is around 17,610, a 113 percent increase from a year earlier, according to the city's Rating and Valuation Department.

With a surge in new home supply and higher government duties to cool prices - which have soared nearly 120 percent since 2008 - competition to lure buyers could trigger even steeper discounts and further pressure developers' margins in one of the world's most expensive home markets, analysts said.

The government said close to 61 percent of completions would be in the New Territories district close to China, where major developers deploy their saleable units, including Sun Hung Kai Properties Ltd and Cheung Kong (Holdings) Ltd , which is controlled by Asia's richest man Li Ka-shing.

Profit margins for Hong Kong's six major developers will fall from 36 percent in 2012 to 20 percent in 2015 and 14 percent in 2016, UBS said in a report in February.
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Old April 11th, 2014, 12:09 PM   #1727
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Labour imports could reduce building costs, but no guarantee home prices would fall
8 April 2014
South China Morning Post

Rapidly rising construction costs have been cited by developers as a reason property prices in Hong Kong will not drop significantly.

Those costs, driven up by an increasing number of public and private projects and a shortage of labour, might be reduced by importing at least 10,000 skilled workers, property analysts said.

However, industry insiders are divided on whether that reduction would result in a fall in home prices.

The latest survey by the Hong Kong Construction Association estimated a shortfall at new construction projects of more than 10,000 workers at the end of November. Respondents to the survey reported a shortage of 16.72 per cent of the required construction workforce, up from 15.68 per cent in April last year.

Thomas Ho, president of the association, said: “If you include all the construction projects, the industry lacks 20,000 skilled workers. And the problem of ageing workers is serious. About 60 per cent of formworkers, bar-benders and fixers are aged over 55.”

The shortages of bar-benders, fixers, formworkers (carpenters) and concretors are the most serious among the skilled workers.

Ho said new railway lines under construction in the city require up to 19,000 workers, but the survey found only 13,000 workers.

“The shortage of workers has boosted wages sharply,” he said. “For example, the wages of timber formworkers have grown to HK$2,500-HK$3,500 a day, even higher than those of administrative officers in the government. And there is no sign that growth will stop in the near future.”

Ho said the industry has suggested that the government shorten the process of importing labour to five or six months from between seven-and-a-half and 12 months at present.

“Importing labour would not lower construction costs, but it could stop them from growing,” he said.

“The construction cost for mass residential has reached HK$4,000 to HK$5,000 per square foot, and the flat is selling for HK$10,000 per sq ft. It is difficult for the general public to afford the flat.

“It would get worse if construction costs continue to rise. The government should solve the problem.” If construction costs decreased, the selling prices of new projects could be lower, particularly as the current market sentiment is weak Stewart Leung Chi-kin, Wheelock Properties

Chau Kwong-wing, a professor in the department of real estate and construction at the University of Hong Kong, believes construction costs would drop if the city imported labour.

“Property prices would lose one of the factors supporting their growth,” Chau said.

“Of course, the lower construction costs would not lead to a fall in property prices in the short run. There are other factors, such as interest rate movements and land supply, that affect the price. But in the long term, the property price would drop.”

If construction costs continued to rise amid weak property sales, Chau said, developers would decrease production.

Stewart Leung Chi-kin, chairman of Wheelock Properties, said a fall in construction costs could lead to a drop in property prices.

“If construction costs decreased, the selling prices of new projects could be lower, particularly as the current market sentiment is weak,” said Leung, who also chairs the Real Estate Developers Association’s executive committee.

“As the government is unlikely to remove the cooling measures in the property market, it would be impossible for developers to ask for a high selling price.”

But Ho disagreed that a fall in construction costs would lead to a decline in flat prices, saying developers’ asking prices largely depended on market sentiment.

Julian Poon Yui-man, vice-president of Lai Sun Development, said labour costs made up about 50-60 per cent of construction costs.

“You have to pay more to hire workers. That’s why construction costs continue to rise significantly even though the cost of materials has stabilised,” Poon said.

But property prices are not necessarily related to construction costs, he said.

“There is a higher chance that the prices of new flats would be lower [if construction costs fall],” Poon said. “It doesn’t mean it would happen for sure.”
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Old April 13th, 2014, 05:04 PM   #1728
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More workers falling to death
13 April 2014
South China Morning Post



Government figures show fatal falls at highest level ever recorded as accident at The Peak puts rules on working at height in the spotlight

The number of people falling to their deaths at work has hit its highest level since 2003, prompting calls for tougher supervision and penalties.

The Sunday Morning Post analysed Labour Department figures on workplace deaths after the latest incident, in which two workers – a man and a woman – fell to their death from a block of flats on The Peak on March 25.

They had been carrying out maintenance work from an 11-metre metal cradle at the 66-storey Tregunter Tower 3 when the platform snapped in two. Two other workers managed to cling on as it broke apart. The two men left the scene before the emergency crew arrived and are still being sought by police.

An investigation is under way into whether illegal labour was involved, a police source said. No one has been arrested. An Electrical and Mechanical Services Department spokesman said it was assessing a report on the incident from the platform provider.

Workers’ rights groups say a law under which contractors must provide safety equipment for anyone working at a height is often flouted.” That’s because it’s expensive to provide enough safety gear but penalties imposed by the courts are always light,” said Chan Kam-hong, chairman of the Association for the Rights of Industrial Accident Victims.

Labour Department figures for 2012, the most recent year for which figures are available, show that 31 people died after falling from a height in industries such as construction and transport. That is the highest death toll since 2003, the year the department began providing figures on workplace accidents on its website. Twelve workers died that year.

In 2011, 21 people fell to their deaths, up from 15 in 2010. The number was 25 in 2009. More lives were lost in the construction industry than any other: 15 in 2012; 10 in 2011; and six in 2010.

Chan said contractors were required by law to provide a work platform and safety belts for labourers working at a height of two metres or more.

The maximum penalty for breaching the law is a year in prison and a HK$500,000 fine. But most companies are fined just HK$10,000 and no one has ever gone to jail for the offence.

Chan said tougher penalties were needed to deter offenders. He added that the city could learn from Britain, where offenders could lose a proportion of their profits for flouting safety rules.

Ip Wai-ming, of the Federation of Trade Unions, said the “shockingly high” death toll was a result of inadequate inspections and a reluctance by contractors to provide enough safety gear. “Although the law states that safety belts are required, how many people are actually providing them?” said Ip, who is deputy director of the FTU’s occupational health and safety committee.

There were 76,804 construction site workers across the city as of September, according to the Census and Statistics Department. It also counted 885 vacancies, but the figure may not reflect the extent of the industry’s labour shortage: a survey last year by the Construction Association found a vacancy rate of 15 per cent. The shortage means more contractors are resorting to illegal labour.

The Labour Advisory Board last month approved a plan to shorten the time it takes for contractors to bring in workers via the Supplementary Labour Scheme. It will cut the process to six months, from an average of 71/2 months for 26 jobs – including bar-bending and formwork.
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Old April 15th, 2014, 05:10 PM   #1729
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A village ‘SAR’ of sorts by the border
14 April 2014
South China Morning Post

By chris_chris_xyz from dcfever :



In the border enclave of Luk Keng, the area outside the Fat Kee grocery store in Kai Kuk Shue Ha village is a “special administrative” region of sorts.

It lies within a country park but is also part of the village area – known officially as the “village environs”. In theory, park rules are to be respected there, but in reality village norms prevail.

The setting might lead a visitor to believe this is another typical New Territories village: land partially covered with concrete; temporary car parks offered for a fee; signs of construction waste being dumped; and chopped down trees.

So it only adds to the confusion to discover that some of the area is zoned for conservation. Parts are privately owned, but those owners have never prevented access to the public. There are no signs warning visitors to stay away.

For years, the area outside the store has been very popular as an informal trailhead for hikers; a temporary shelter offers a place to take a rest.

But there appears to be no sign marking where the country park and trail begins. A sign for the trail, and one warning against cycling, stand 200 metres from the park’s boundary – perhaps in a bid to avoid the section of private land.

“I am not sure if this is part of the country park,” said one hiker who had visited the popular Fung Hang Family Walk. “But it doesn’t matter as long as the access is not blocked.”

Cars can get there directly, but only via Bride’s Pool Road. By law, entering any country park by vehicle requires a permit issued by the country park authority.

Meanwhile, local villagers have little interest drawing attention to the situation, which may be the result of a mutually beneficial deal.

Responding to Post inquiries, a spokesman for the Agriculture, Fisheries and Conservation Department said it had found no irregularities in the area, but it would monitor the situation.
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Old April 16th, 2014, 04:34 PM   #1730
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Big cuts to cost of border crossing ruled out
12 April 2014
South China Morning Post

Development officials have trimmed the cost of a new border crossing point by just 1.2 per cent, effectively stonewalling a demand by legislators to reduce its soaring price tag.

They also dismissed money-saving suggestions from lawmakers, arguing that their ideas would end up increasing the total cost of the Liantang-Heung Yuen Wai border control point.

The Legislative Council’s Finance Committee originally approved HK$16.25 billion for the checkpoint in 2012. But the government late last year asked for a further HK$8.5 billion to meet rising construction costs, blaming the increase on heavy engineering work, poor ground conditions and rising wages.

But, alarmed by the 50 per cent increase in the budget amid a string of government requests for extra cash for public works projects, Legco’s development panel voted down the funding request in January and demanded cost reductions.

A Development Bureau spokesman said yesterday that no further cuts were possible.

“We have conducted a thorough review of the scale and scope of the project and found there was no room for further reductions,” he said.

After updates based on inflation and actual expenditure incurred so far, the overall cost of the project is now put at HK$24.5 billion, down from HK$24.8 billion in January – a cut of 1.2 per cent. A revised funding request is expected to go before the panel later this month.

“As works have started, we have reached the point where there is nothing more to trim, and further delays to the project will do no one any good,” the spokesman added.

But panel member Albert Chan Wai-yip, of People Power, said: “If the government refuses to cut costs, we shall continue to vote no to the funding request.

“I don’t think it is a big deal if the project is delayed for several years. Maybe the costs will drop if we build it after the building boom in the next few years.”

According to the bureau’s projections, the project could cost HK$4.2 billion more if delayed for a further three years.

Expanding existing roads rather than building a new, 11-kilometre stretch of highway to the checkpoint – another idea from lawmakers – could push up costs by HK$8 billion, the bureau said. “Expanding the existing countryside roads won’t mean we can cope with traffic growth in the long run,” the spokesman said. “At the end of the day, we will still need the highway link.”

The spokesman added: “We are confident the panel will endorse it this time. We have followed up the suggestions members raised last time.”

The extra cash, if approved, will see the new crossing – situated between the Man Kam To and Sha Tau Kok crossings in the northeastern New Territories – completed on time in 2018 to provide better access to eastern Shenzhen.

Lawmakers also rejected a funding request for RTHK’s new headquarters. The Central-Wan Chai bypass is among several other projects that are over budget as construction costs soar.
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Old April 23rd, 2014, 06:05 PM   #1731
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More border crossing funds sought
The Standard
Wednesday, April 23, 2014

The government is once again seeking the Legislative Council's approval for additional funds to complete the construction of the Liantang/Heung Yuen Wai Boundary Control Point.

It is proposing to increase the approved project estimate by HK$8.19 billion to HK$24.4 billion, from the original HK$16.2 billion.

The original proposal for an additional HK$8.55 billion was made in January this year, but it faced fierce opposition from lawmakers and was put on hold.

Following severe criticism from lawmakers, the government has now reduced the cost by about HK$350 million.

"An over-budget amounting to 50 percent is unacceptable. Are contractors cheating the government by exaggerating the cost?" DAB lawmaker Leung Che-cheung asked.

Labour Party lawmaker Fernando Cheung Chiu-hung said: "We should have passed the proposal the last time if we really wanted to."

He said the HK$350 million reduction is not significant.

Civil Engineering and Development director Hon Chi-keung said there is no other way to cut back on construction costs, adding that the three contracts for the project take up 90 percent of the expenditure.

"We are confident that the final amount will remain at this level," Hon said.

He added the government had studied three options to reduce costs but found them unfeasible as delays would only give rise to even higher expenditure.

He added that it could also inconvenience the public if the opening was delayed by two to three years.

Hon said the government estimates that project costs will remain as high as HK$160 billion to HK$190 billion in the next 10 years, which is close to the current level, and thus delaying the projects will not help.

He was confident that the boundary control points could be completed by 2018.

Meanwhile, the government also sought the panel's approval of HK$96 million for a planning and engineering study on the Sunny Bay reclamation.

While some pan-democratic and pro-government lawmakers were not happy, saying the government was simply developing tourism, the panel approved the request.
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Old April 24th, 2014, 08:23 AM   #1732
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Extreme weather set to raise risk of landslides
South China Morning Post
11 April 2014




Hong Kong should be prepared for the increased risk of landslides as extreme weather conditions are expected to hit the city more frequently and vigorously, the Civil Engineering and Development Department says ahead of the coming rainy season.

The downpour last month which saw the Observatory issue the first black rainstorm alert of the year was an example of extreme weather conditions, said Au Yeung Yan-sang, deputy head of the department's geotechnical engineering office. The office received 11 reports of landslides on that night. In one case, a homeowner in Sai Kung was told to stay out of a section of their flat because of a risk of falling debris.

Au Yeung said the department had started to reinforce slopes, which would keep the risk of landslides low. It strengthens 150 government man-made and 30 natural slopes every year, so they can withstand heavy rain. The department will also work on delivering faster and more accurate landslide alerts, and improve co-operation with other departments, he said.

"It will become more challenging to keep the risk of landslides low in the future," he said. "No government or place can say we can prevent disaster, but we can work on minimising the damage."

Some 2,700 natural slopes had been identified as needing reinforcement, and Au Yeung was satisfied with the rate of strengthening 30 such slopes each year, as most are not in urgent need of work.

Last year, the department received 241 reports of landslides, lower than the average of 300 for the last 20 years. None of the landslide cases last year were fatal. Most of them affected roads, car parks, playgrounds, gardens and other open areas.

One of this year's projects is the slope above Bowen Road, where landslides occurred in 2005 and 2008. No one was injured in either event, but a security-guard booth in Ewan Court was crushed in 2008.

Five concrete barriers are being built to contain as much as 2,000 cubic metres of debris in case of a landslide. In one section, a 30-metre deflection wall will funnel the debris into one of the structures.

Soil nails will be installed at distressed areas to help stability, while mesh fencing will stop debris reaching nearby buildings.

The HK$227 million project is expected to be completed by the end of the year, Au Yeung said.
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Old April 24th, 2014, 09:38 PM   #1733
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Sharp drop in land prices unlikely for prime sites in HK
22 April 2014
South China Morning Post



Correction in properties in urban areas will be less severe than those in the New Territories

Recent land sales results have shown the government is willing to accept lower offers for its sites.

The trend is reflected in the sale of the Whitehead residential site in Ma On Shan, which Sun Hung Kai Properties bought last month for about HK$1.83 billion or HK$4,241 per square foot, 18 per cent less than a site in the district acquired by Cheung Kong in November 2012.

But the city’s current average property price is still 2 per cent higher than in 2012, according to Centaline Property Agency’s Centa-City Leading Index, a barometer of the local property market.

Another example of the downward trend is the case of the Lands Department charging a land premium of HK$2.71 billion or HK$2,059 per square foot for phase four of Lohas Park in Tseung Kwan O at the end of last month. The levy was 15 per cent less than that charged for phase three in 2007. Nonetheless, property prices have surged 117 per cent since then.

In another example, Far East Consortium International bought a residential site in Tai Wai for HK$148 million or HK$3,336 per square foot. It is the lowest price paid for a residential site in the eastern New Territories over the past 10 years.

These sales show land prices are falling, the result of higher construction costs and weakening market sentiment.

Developers used to enjoy higher profit margins. As they say it is difficult to cut construction costs, they have lowered their offers for land acquisitions to maintain those margins and cushion the impact of the market downturn.

However, the trend does not mean land prices will drop sharply and all over the city.

For example, Wing Tai Properties paid HK$433 million or HK$9,396 per square foot for a site in Shau Kei Wan. The price is at the upper end of market expectations, even though the site is small.

The different prices for the sites are because of the location. If the site is on Hong Kong Island and in other urban areas with less supply, developers are willing to offer a higher price. The competition for sites in prime locations is strong and local developers are facing rivalry from mainland players.

As land prices on Hong Kong Island remain stable and future home supply is tight, price correction will be less.

Many developers are trying to build more small flats to maintain a higher price or sit on their inventories.

But in the New Territories, property prices will experience a sharp correction when new home supply increases significantly and market sentiment is poor.
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Old April 25th, 2014, 05:21 PM   #1734
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Panic on horizon over mall upgrade
The Standard
Friday, April 25, 2014



Residents of South Horizons in Ap Lei Chau are worried as the nearby mass-market retail mall Marina Square (West) may be turned into a high-end shopping mecca for tourists.

Some living at the blue-chip estate have signed petitions, with legislators and district councillors due to meet the landlord which is forcing tenants to move out of the four- story mall immediately.

Most small tenants that have catered to the daily needs of residents over the past 10-20 years - including restaurants, photo printers, opticians, clinics and a church - received a letter from property management firm Savills earlier this month, People Power chairwoman Erica Yuen Mi-ming said.

Rents were either raised by a third or their contracts were set to expire early in May, July or October, Civic Party lawmaker Dennis Kwok Wing-hang said.

Yuen added that some were offered relocation to the first or second floor of the mall.

But chain stores ParknShop, Watsons, KFC and McDonald's may stay.

Following the completion of MTR South Island Line (East) next year, sources said Marina Square (West) owned by Estate Dragon Group may be revamped into an outlet for luxury brands, designated for tourists, similar to Horizon Plaza operated by Lane Crawford and Joyce. Prada has already opened in the east mall of Marina Square next to it.

Estate Dragon is controlled by four Taiwanese, according to Land Registry data.

Kwok said he has talked to at least 10 tenants at the mall, including Fotomax. He and another legislator, Chan Ka-lok, will hold a meeting with the residents on Sunday. They want Savills representatives to come along.

The letter sent to Fotomax shows that it has to vacate its premises by May 30, otherwise, its rent increases to HK$31,011 per month. Its current rent is HK$17,000. Also, rent for a real estate agency was raised to HK$13,000 per month from HK$7,000.

However, Savills said it has not heard about the restructuring of the mall.
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Old May 26th, 2014, 08:26 PM   #1735
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Call for preservation of rail-link relics
The Standard
Monday, May 26, 2014









Several conservation concern groups yesterday demanded that relics found along the Sha Tin-Central Rail Link be preserved.

A group defending the Song dynasty relics, mainly formed by 10 secondary and university students, said the archaeological report on construction in Kowloon City lacks details and has threatened to surround the station.

Albert Lai Kwong-tak, founding chairman and policy convener of Professional Commons, criticized the government for not being transparent by releasing information.

The two groups, together with other professional and concern groups, demanded the site be temporarily declared a possible monument, and for the ancient wells to be renovated at their original locations.

The Hung Hom to Central line of the rail link is scheduled to be completed by 2018 though the discovery of the ancient relics may affect this. One of the relics is a square-shaped well from the Song dynasty (960 to 1279).
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Old May 27th, 2014, 03:45 PM   #1736
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Shops pay price for MTR trouble
The Standard
Thursday, May 22, 2014

Landlords and tenants near the To Kwa Wan MTR station site have to face years of difficulty amid construction delay of the Sha Tin-Central Link.

About 80 shops on Ma Tau Wai Road are especially hard-hit after Song dynasty-era relics were discovered on the Ma Tau Wai section of the railway extension, meaning the completion could be delayed for years beyond the scheduled 2018 date.

Some stores are currently surrounded by construction blocks and machinery, making them inaccessible to pedestrians.

"We can only earn a few hundred dollars a day since construction started. Before that, we had daily turnover of at least HK$4,000," said Cheung, a restaurant worker in the area.

"Most of the customers now are construction workers. The number of late- night snacks eaters is also greatly reduced."

Cheung said the eatery might consider moving to nearby Pak Tai Street, or out of To Kwa Wan after its current lease expires.

Ma Tau Wai Road used to be considered a prime location for retail leasing investments, as there are numerous stores with entry prices between HK$5 million and HK$20 million that were expected to attract passersby after the completion of the MTR project.

However, work has been halted twice since December to make way for the archaeological study.

Now at least 10 shops are vacant while others are making their way out. A few convenience stores and furniture shops have posted notices saying they will be relocating soon.

Roger Shek Sau-yin, sales director at Midland IC&I, said some landlords along Ma Tau Wai Road have cut rents by 20 percent, but still get a cold response.

Another agent cited the example of a mainland investor who was looking for an annual return of 3 percent, but is so far realizing only 1 percent.

"The street has lost its money- making potential," the agent said.

Meanwhile, some investors are eyeing other shops in the vicinity that are less affected by the ongoing construction, and stand to benefit after the railway project is finished.

Ten stations will be built for the Tai Wai to Admiralty rail link, including Kai Tak, To Kwa Wan and Ma Tau Wai, which currently have no direct MTR access.

Pak Tai Street and Kai Ming Street in To Kwan Wan, for example, are among the most popular streets with expected annual yield of between 2 and 3 percent.

The fact that the Urban Renewal Authority bought six shops on Kai Ming Street for HK$78.8 million has also fueled investors' confidence.

Now, more than half of about 50 stores on the street are being revamped for leasing.

Edwin Lee Kan-hing, chief executive of business brokerage BridgeWay, believes inner streets in To Kwa Wan could see another wave of appreciation.

"They are not affected by the current MTR construction," he said.

Investors are also fighting over stores located near station exits, such as those in Whampoa Garden in Hung Hom.

A shop on Man Tai Street has soared nearly five times in value over the past five years to HK$135 million - just because of its location near the station exit, Shek noted.
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Old June 1st, 2014, 07:51 AM   #1737
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'Rare' Tsim Sha Tsui plot could be yours for $3.4b
The Standard
Friday, May 30, 2014



A Tsim Sha Tsui commercial plot for tender is expected to fetch up to HK$3.4 billion while two small residential sites in Tuen Mun have been valued together at almost HK$300 million.

Developers may submit tenders for the three sites from June 27 to late August. Market estimates for the cost of the 28,309-square-foot site at 15 Middle Road, Tsim Sha Tsui, ranges between HK$2 billion and HK$3.4 billion.

With a maximum gross floor area of 339,712 sq ft, around 60 percent of the area may comprise offices or hotel rooms while the rest may be used for a public car park. That translates to about HK$10,000 per buildable square foot for the commercial area.

Alvin Lam Tsz-pun, director at Midland Surveyors, considers the site as rare and says it will be popular among developers eager to build either an A-grade office building or hotel.

Meanwhile, the two Tuen Mun sites are likely to be valued higher than previous plots tendered in the district as they enjoy better locations.

The cost of the 11,244 sq ft site at Yan Ching Street, near the West Rail Line Tuen Mun station, is expected to range between HK$160 million to HK$241 million. It would yield 80,478 sq ft of GFA on which at least 125 units may be built.

Another plot at Lok Chui Street measures 13,487 sq ft and is tipped to fetch HK$47.2 million to HK$64.7 million. Separately, the number of mortgage applications in April fell 2.8 percent from a month earlier to 9,156, data from Hong Kong Monetary Authority showed.

Total value of mortgage loans hit HK$19.6 billion, and those for the secondary market rose 6.5 percent from March to a nine-month high to HK$11 billion. More than 63 percent of new mortgage cases used HIBOR as reference, the highest in 2 years.

As for the primary market, luxury project Positano of HKR International (0480) at Discovery Bay will release the price list of 50 duplexes out of 102 today. Six show flats are also available for viewing from today.
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Old June 2nd, 2014, 06:53 PM   #1738
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South China Morning Post
Fears relics removed from To Kwa Wan MTR site
Photos show empty pits at To Kwa Wan excavation site where artefacts were found
Monday, 02 June 2014

Concern groups have renewed calls for relics unearthed at the To Kwa Wan MTR site to be preserved in situ after photographs emerged over the weekend of empty pits at the site.

A photo of the Sacred Hill site snapped on Saturday by the History Needs Us group from buildings near the station - which is part of the Sha Tin-Central Link - showed several empty ditches surrounded by steel piling.

The group fears construction may have begun before an archaeological survey could be conducted in the area, and that the relics may have been removed from the pits without public knowledge.

But an Antiquities and Monuments Office spokeswoman said yesterday no new relics had been removed according to its latest inspection, carried out on Friday.

Albert Lai Kwong-tak, chairman of the Professional Commons think tank, which is working with the group, said the MTR had to change its excavation strategy. "It removes opportunities for in situ preservation and violates the procedure set out in the China Principles for Heritage Conservation, which requires such relics to be removed only if no alternative can be found."

An MTR spokeswoman said the area was part of the third phase of the recently expanded excavation site, which was not covered by the link's original environmental impact assessment that stipulates all archaeological work must be complete before construction can begin.

"Construction of boundary walls was already under way when we were told the excavation site had to be expanded. All work not related to archaeological excavation has already been stopped," she said.

Thousands of artefacts and relics - including four wells dating back to the Song dynasty - have already been removed from the To Kwa Wan MTR site, which is under construction.

Under the MTR's Archaeological Action Plan, any relic found can be excavated and removed unless approval is given to leave it in place. This has prompted opposition from many groups, who want the relics kept where they are until the entire archaeological excavation is completed.

Antiquities Advisory Board chairman Andrew Lam Siu-lo said it was impossible for the MTR to report to the board every time something new was found. "They will move the [relics] when they need to and keep a record of them unless we deem it is necessary that they stay," he said.
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Old June 5th, 2014, 05:43 PM   #1739
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Relics force 5-month delay in rail link work
4 June 2014
South China Morning Post

Sha Tin-Central link joins list of MTR projects that are set to run late

The discovery of ancient relics has caused a five-month delay in work on the Sha Tin-Central railway link’s To Kwa Wan section.

The MTR Corporation yesterday disclosed for the first time the extent to which an archaeological dig has hit the schedule. It means all five of the MTR railway projects are experiencing delays, with the most high profile, the cross-border link to Guangzhou, set to arrive two years late in 2017.

The announcement came two months after the publication of an interim archaeological study report showing that thousands of relics dated from the Song dynasty (960-1279AD) to the early 20th century had been found at the site of To Kwa Wan station and two tunnels connecting it to Ho Man Tin station.

The progress was reported to 14 legislators who visited the site yesterday for briefings from the MTR and archaeologists.

Yet the corporation would not say whether the opening of the Tai Wai to Hung Hom section of the link, scheduled for 2018, would be delayed. The line is due to go into full service in 2020 when the Hung Hom to Admiralty section is completed.

“So far there has been some construction work suspended due to archaeological studies,” general manager for the project Philco Wong said. “The time impact is five months. We are discussing with the government possible construction techniques to catch up.”

Lawmakers were split on the conflict between conservation and the speed of the long-awaited railway project, which has been planned since 2000.

Chan Kam-lam, chairman of the Legislative Council transport panel and a Democratic Alliance for the Betterment and Progress of Hong Kong member, was concerned about the delay.

“We still don’t know if there will be any further delay ... If the relics are to be preserved in situ, then extra works need to be conducted … We need to decide as soon as possible,” he said.

But the Civic Party’s Claudia Mo Man-ching, who represents Kowloon West, said a majority of residents favoured building a heritage museum integrated with the railway and did not mind a delay in the line’s completion.

On Sunday, the History Needs Us group released photographs of empty pits at the site and suggested there might have been a cover-up of relics removed from them. Citing the MTR’s briefing, Mo said one pit was a waste-collection trench from the Qing era (1644-1911) and the other two were piling holes for the railway.

Michael Tien Puk-sun, chairman of the Legislative Council’s railway subcommittee, said an old well and a drainage system should stay for public display. This meant the MTR would need to revise the station design. “I believe the MTR is absolutely able to do the redesign,” Tien said.
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Old June 10th, 2014, 06:46 PM   #1740
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A golden decade for the construction industry
10 June 2014
South China Morning Post



Gammon Construction was founded in India in 1919. The company has been based in Hong Kong since 1958, after it won the contract to build a new runway at Kai Tak airport in 1955.

The company is owned by Jardine Matheson and infrastructure firm Balfour Beatty.

Gammon has become the largest construction company in Hong Kong in terms of market share. Its projects have included the government headquarters at Tamar and the West Kowloon terminus of the MTR Express Rail Link to Guangdong province.

Thomas Ho On-shing joined the company in 1997 and became its chief executive in 2005.

Q: What is the focus of the company under your leadership? Will you put more resources into the infrastructure business?

A: Since the government plans to build 47,000 flats in the long term, and more infrastructure will be built, the coming years will be a “golden decade” for the construction industry.

It is true that infrastructure makes up the bulk of our business. But we will try to make a balance between infrastructure and building construction.

We are more concerned about the quality of our service. We have introduced building information modelling [a system that allows the virtual visualisation of the construction of a building prior to its physical construction] for project management to Hong Kong. It could minimise the waste involved.

We have adopted this technology in the construction of The Forum at Exchange Square. Standard Chartered Bank [the tenant] could use our system for interior design and decoration when they move in.

Q: Has Gammon’s profit grown sharply after construction projects increased in recent years?

A: People have the misconception that main constructors generate lots of profit when construction costs rise sharply.

In fact, the sharp increase in construction costs is mainly because of the rise in the salary of workers. Labour costs eat up a big chunk of profit.

Builders may get more business in a market boom but will not benefit all that much.

Q: Gammon has expanded to the mainland and Southeast Asia. Could you tell us about the market situation and your expansion plans?

A: If you want to survive, you have to be one of the three largest construction firms in the market. You have to be a local company and be able to build up connections in the city.

On the mainland, the problem of protectionism is a serious one. We expanded to the mainland 30 years ago and built over 100 projects there. But the competition is getting strong.

None of the well-known construction firms in the world has been able to enter the market over the last 20 years.

Since Hong Kong has plenty of development opportunities, we don’t want to waste our talented staff in other markets.

We will not expand as aggressively as we did in the 1990s. We will focus on our business in Hong Kong, Singapore and Vietnam and have no plans to expand elsewhere.

Q: What is the local construction market like?

A: Most construction projects in Hong Kong are world-class projects worth between HK$3 billion and HK$20 billion. And Hong Kong is building five railway links underground or in tunnels; the construction is very complicated.

The MTR Express Rail Link’s West Kowloon terminus is more than 30 times as big as an ordinary MTR station. You can imagine how complicated the work is. Not many people in the world have experience in this kind of construction.

But it is a good time for people to join the industry. You can gain experience from this kind of development. Not many people have the opportunity to build this kind of project in their lives.

Q: What obstacles do construction firms face? Do you have any suggestions for the government?

A: Most prefabricated components for building flats come from the mainland. But their factories have moved to cities far from Hong Kong. The higher transportation fees add to the growth in construction costs.

We should not rely on imports from the mainland. The government could allocate sites for factories to produce prefabricated components.

The government should also release a site for a factory for cutting and bending steel bars. At present, construction firms have to do the work on site. The factory could save time and cost, and the quality and safety could be improved as well.

Q: Do you think construction costs will continue to increase?

A: They will continue to increase unless we are able to import sufficient overseas workers. But it is difficult to forecast how much the construction costs will rise.

It depends on the impact of the shortening of the process for importing overseas workers. If it doesn’t help much, the salaries of workers will rise even more sharply.
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