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The following has been issued to the media following the press conference by the Secretary for Economic Services, Mr Stephen Ip, and the Commissioner for Tourism, Mr Mike Rowse, on progress of negotiations with Walt Disney on building a theme park in Hong Kong:

On 3 March 1999, the Financial Secretary announced in his Budget Speech that the Hong Kong SAR Government and The Walt Disney Company had agreed to engage in intensive negotiations with a view to determining, by 30 June 1999, whether a Disney project could be brought to fruition in Hong Kong.

As we have said previously, there could only be three possible outcomes of this process of negotiation:

(i) that no agreement has been reached;

(ii) that the two sides have reached a definitive agreement; or

(iii) that progress has been made but the two sides need more time to work through the details.

Significant progress has been made over the past four months. However, the Disney project is highly complex and requires thorough analysis of the economic costs and benefits and careful evaluation of the technical and financial issues. So we need a further period of serious discussions to make sure that the terms of any agreement on a Disney project are mutually acceptable and can be reached in sufficient detail for both sides to be comfortable. At this time, there is no agreement to build a theme park in Hong Kong. However, we have agreed with Disney to extend the period of intensive negotiations by four months, with an aim to reach a definitive agreement by 31 October 1999.

To take the process forward expeditiously, The Walt Disney Company will continue to assign a dedicated team to work on the Hong Kong project during this extended period of discussions.

For its part, the Hong Kong SAR Government will continue to assign a dedicated team, supported as necessary by outside consultants, to represent us as the negotiation progresses.

In the meantime, in order not to lose momentum, the Hong Kong SAR Government will shortly be putting to the Town Planning Board a revised Outline Zoning Plan for Northeast Lantau. The Plan proposes to develop Northeast Lantau into a major tourism area which will encompass a major international Theme Park at Penny's Bay.

End/Thursday, July 1, 1999

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