DSC01164 by Martin Ng, on FlickrMTR given two mega plots
Thursday, May 19, 2011
Wong Chuk Hang
The MTR Corp has been given two plots of land to help offset the HK$17.7 billion cost of two new rail projects - the South Island Line and the Kwun Tong Extension.
Transport Secretary Eva Cheng said the Executive Council had yesterday decided to hand over the sites - seven hectares in Wong Chuk Hang and a 2.6 hectares in the former Valley Road Estate in Ho Man Tin - to compensate the MTRC for having to shoulder the cost of designing, building and running the two lines.
The estimated construction cost for the South Island Line is HK$12.4 billion while the Kwun Tong Extension could reach HK$5.3 billion.
Under the rail plus property model, the MTRC will pay the full market premium (on a green field basis) on the sites and bear all development costs for the property developments. It has also to bear the operation, maintenance and management responsibilities for 50 years.
Both sites will have a lower plot ratio to limit the size and height of the development.
Cheng said it is expected that the MTRC will build 4,700 mostly small- and medium-sized flats in Wong Chuk Hang.
Cheng also said the environmental impact assessments of both sites are "valid and legal."
But since work on the property developments cannot begin until the completion of the railways, the new homes will not be ready until 13 years from now.
Democratic Party lawmaker Lee Wing-tat said the government will be disappointed if it expects affordable flats as the MTRC may build luxury apartments instead.
He suggested the government separate the accounts of railway and property developments to increase transparency.
Lawmaker Andrew Cheng Kar-foo, chairman of the Legislative Council's transport panel, said the MTRC is likely to have a substantial financial gain.
In fact, the two plots could fetch as much as HK$7.88 billion if sold in a public land auction today, Centaline Surveyors director James Cheung King-tat said.
He said the Wong Chuk Hang plot could be worth HK$6.2 billion and Ho Man Tin HK$1.68 billion, both at an accommodative value of HK$12,000 per square foot.
Last June, Sun Hung Kai Properties (0016) bought a site near Ho Man Tin for HK$10.9 billion, or HK$12,500 psf.
The developer said flats on the plot will be sold for at least HK$20,000 psf.
A 600-square-foot flat near the Wong Chuk Hang site is now selling for HK$7,000 to HK$10,000 psf.
The construction of the railways is expected to be completed in 2015.
The seven-kilometer South Island line will run from South Horizons, with Lei Tung, Wong Chuk Hang and Ocean Park stops before connecting to Admiralty.
The time for a commute from South Horizons to Central - now just by road - will be cut from the current 25-45 minutes to 10 minutes and will benefit 350,000 people.
The 2.6-kilometer Kwun Tong Line Extension will connect Yau Ma Tei and Whampoa via Ho Man Tin before connecting to other routes at Mong Kok. This will benefit about 180,000 people.
MTRC chief executive Chow Chung-kwong said the agreements with the government are a key milestone for the two rail projects.
The MTRC expects the two projects will create about 3,500 jobs during construction and 2,260 jobs after the railways start operating.