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Following is a transcript (English portion) of the remarks made by the Secretary for Commerce and Economic Development, Mrs Rita Lau, on the latest development in the construction of a new cruise terminal at Kai Tak at the lobby of the Central Government Offices today (September 30):
Secretary for Commerce and Economic Development: As a result of the last unsuccessful land tender earlier, we announced in July that we planned to re-tender the cruise terminal development project, and that we would consider financing the works for the site formation and Government Facilities.
In the last few months, we have continued to engage the trade for exchange of views. We have also been tracking closely the latest market development. The construction cost has surged significantly, and it is difficult to predict the future trend. In view of the recent financial market tsunami, this would add risk and uncertainties to cost and capital financing of the project. We have therefore re-assessed the latest situation and market interest in the bidding for the tender, including the likelihood of an abortive tender and its adverse consequences.
After careful and due consideration, the Government has decided to finance the development of the cruise terminal by taking up the construction of the project, and lease the facilities to a cruise terminal operator after completion.
This will enable us to implement the project and commission the first berth in 2013 with greater certainty. We will run the risk of further delay if we test the market again through another land tender, because we would have to wait for the outcome of the re-tender before we could proceed with an alternative approach. The Government has thus decided to develop the cruise terminal through the Public Works Programmes.
The Government will invite open tender for two contracts. The first for the site formation works, involving the construction of berthing facilities of the cruise terminal. The second is for the cruise terminal building works, including the control point and other supporting facilities. We will prepare these two contracts in parallel to shorten the implementation time. Later, we shall apply for funding approval from the Legislative Council. We plan to provide service to the cruise operators as soon as the first berth is completed in mid 2013.
Under this approach, the Government would retain the ownership of the site and the cruise terminal facilities.
We plan to lease the cruise terminal to an operator with a tenancy agreement of about seven to ten years. Through the tenancy agreement, we hope to achieve two objectives: first, to bring in market expertise in operating the cruise terminal, and second, to monitor the performance of the operator. We shall draw reference from overseas experience, and consult the cruise industry and travel trade, in formulating the tenancy arrangement.
The Government will engage cruise terminal consultants with international experience to draw up the requirements for the design and build tender of the terminal. We would also continue to engage the cruise industry and travel trade, in particular the cruise operators, for developing a cruise terminal which is modern and is able to meet market needs.
We shall report the latest developments to LegCo as soon as possible.
Reporter: (on construction cost)
Secretary for Commerce and Economic Development: As I said, weˇ¦ve seen a very significant surge in the construction cost, and it will be very difficult to predict the trend. Nonetheless, our colleagues have made a project estimate, and it is roughly estimated to be in the order of 7 billion dollars. But the actual estimate would have to be adjusted as and when we submit the Finance Committee agenda item paper to Legislative Council. And of course, as I said, we would need to update members of the Legislative Council as soon as possible and I intend to do so very shortly to secure their support. And I should add that, tourism is a very important economic pillar for Hong Kong. So it will be in the interests of Hong Kong to support an infrastructure which supports the development of tourism industry.
(Please also refer to the Chinese portion of the transcript)
Ends/Tuesday, September 30, 2008
Issued at HKT 20:12
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