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LCQ3: Development of West Kowloon Cultural District

     Following is a question by the Hon Ma Fung-kwok, and a reply by the Secretary for Home Affairs, Mr Tsang Tak-sing, in the Legislative Council today (March 20):


     According to the development parameters in the draft South West Kowloon Outline Zoning Plan, the maximum plot ratio for the West Kowloon Cultural District (WKCD) is 1.81. There have been comments that such a plot ratio is too low (cf. the maximum domestic plot ratio for Kowloon being 7.5), rendering the WKCD site not being fully utilised and difficult to incorporate facilities (including literary museum, more space for artists' creative work and hotels for accommodating arts groups visiting Hong Kong) which have all along been advocated by the arts and cultural sectors. Moreover, some members of the public consider that the development plan drawn up by the WKCD Authority based on the Conceptual Plan "City Park", under which the public transport terminus and station are to be provided underground and the various arts and cultural facilities to be scattered within WKCD, will result in an insufficient flow of visitors in WKCD. On the other hand, the estimated cost for building the proposed Xiqu Centre in WKCD has doubled from $1.3 billion in 2006 to $2.7 billion, arousing concern that the $21.6 billion funding allocation to the WKCD Authority in 2008 will be insufficient to meet the capital cost of WKCD. In this connection, will the Government inform this Council:

(a) whether the Government had based on clear and scientific criteria for setting the maximum plot ratio of WKCD at 1.81; if it had, of the details of such criteria; if not, of the Government's justifications for adopting that plot ratio;

(b) whether the Government will consider, on the premise of not affecting the development progress of WKCD, raising the plot ratio for WKCD so as to add the aforesaid venues and facilities advocated by the arts and cultural sectors and to increase the floor areas for residential and commercial uses in the district, thereby bringing sufficient flow of visitors to WKCD on the one hand and boosting WKCD Authority's income on the other; if it will consider, of the details; if not, how the authorities will address the aforesaid demand of the arts and cultural sectors; and

(c) whether the Government has assessed the capital cost of WKCD to find out if the construction costs of WKCD will exceed the $21.6 billion funding allocation; if it has, of the details, and whether the Government has formulated measures for dealing with any over-budget situation; of the measures put in place by the Government to strictly control the capital cost of WKCD and at the same time maintain the building quality of various facilities?



     The development density and approach for WKCD are the outcome of consultations over a long period of time. Apart from the statutory public consultation conducted by the Government on the South West Kowloon Outline Zoning Plan (SWK OZP), the West Kowloon Cultural District Authority (WKCDA) has conducted a three-stage Public Engagement exercise on the overall planning of WKCD and eventually selected the "City Park" conceptual plan by Foster + Partners. Based on this conceptual plan, the Development Plan (DP) for WKCD has undergone the statutory planning and public consultation process, which was completed in January this year. On the premise of prudent financial management, WKCDA aims to take forward the WKCD project as soon as possible, so as to create a world-class arts and cultural hub for the early benefit of the community.

     My reply to the three parts of the question is as follows:

(a) In accordance with section 21 of the West Kowloon Cultural District Authority Ordinance (the Ordinance), WKCDA, in preparing the DP for WKCD, shall comply with the development parameters and other requirements or conditions as may be specified in the SWK OZP, which include setting the maximum plot ratio of 1.81 for the overall WKCD development. The SWK OZP was published in the Gazette in April 2008 and, upon extensive public consultation, approved in March 2009. The plot ratio of 1.81 is calculated based on the area of the entire WKCD site, including the Park and waterfront promenade of considerable size in site area; if the area of these sites are excluded, with only the area with buildings to be calculated, the plot ratio of WKCD is actually higher than 1.81. The development parameters concerned are the outcome of years of consultation and discussion.

     From the planning perspective, buildings along the waterfront should be relatively lower to avoid a wall effect in the coastal area affecting air ventilation and blocking the harbour view from inland urban area. As a new waterfront development area, WKCD is intended for low-rise and low density developments. The current plot ratio is in line with this planning intention.
(b) In addition to imposing requirements on the plot ratio and the area of public open space of the DP for WKCD, the SWK OZP stipulates that not more than 20% of the total plot ratio shall be for residential use in WKCD and that the building height limits shall be in the range of 50 to 100 metres above the Principal Datum.

     As stated in the paper submitted to the Finance Committee of the Legislative Council for seeking funding in 2008, the land sale proceeds from the disposal of hotel, office and residential sites in WKCD shall go to the Government. As such, any increase in the floor area for residential and commercial uses in the district will not bring direct income to WKCDA. This income will be transferred to the Treasury. According to the current plan, residential and commercial developments will be developed with the arts and cultural facilities and other facilities managed by WKCDA in an integrated manner. Such integration should be able to bring people to and create vibrancy for WKCD.

     The DP for WKCD was gazetted in March 2012 under the Town Planning Ordinance to enable the public to submit representations. The DP was subsequently approved by the Chief Executive in Council in January 2013. Any substantial amendment to the DP at this stage will result in delay of the implementation timetable of the WKCD project.

     Moreover, WKCDA has strived to maintain close communication with the arts and culture sector and to gauge stakeholders' views on WKCD's arts and cultural facilities through various means, with a view to striking a balance between different social and artistic demands. For instance, it is planned that Literary Arts Space for literary arts activities and programmes, Arts and Craft Studio, offices for arts-related uses and other ancillary facilities will be provided in WKCD. The detailed design and operation of these facilities will be further explored. WKCDA will continue to listen to stakeholders' views in order to provide suitable arts and cultural spaces to encourage arts creation and to support local and visiting art groups.

(c) The Finance Committee of the Legislative Council approved in 2008 a one-off upfront endowment of $21.6 billion to WKCDA to implement the WKCD project. The WKCD development spans over a long period of time, during which changes in economic conditions and other relevant factors may affect construction costs. Owing to significant changes in the economic environment in recent years, construction costs have been on the rise. As reflected by the Government's Building Works Tender Price Index, construction cost has nearly doubled over the past six years. Besides, the proposed integrated basement, education facilities, green initiatives as well as information and communication technology initiatives give rise to additional construction costs.

     Keeping a close watch on changes in the project costs, WKCDA has been exploring such arrangements as phased development to increase cash flow and to contain project costs. To optimise the use of existing resources, WKCDA has adopted a prudent financial approach in formulating suitable financial strategies. In terms of controlling construction costs, WKCDA makes reference to the prevailing economic environment, market prices and independent quantity surveyors' assessments when carrying out procurement and tender exercises for individual facilities, exercising stringent control over the budgets for relevant construction works. WKCDA also explores a variety of viable approaches to maximise cost effectiveness. In terms of investment returns, the upfront endowment of $21.6 billion has, after deduction of expenses incurred in the past few years, accumulated to approximately $23.5 billion to date.

     The WKCD project is now at the planning and design stage. Upon the finalisation of the designs of the first batch of facilities and confirmation of the construction programmes, it will be possible to make more reliable cost estimations and to consider the need for additional funding. WKCDA will update the public on its latest financial status at a suitable juncture.

     The WKCD Project Management Team of the Home Affairs Bureau is responsible for monitoring WKCDA in terms of the progress of project delivery, methods of procurement and tendering, as well as expenditures for various construction projects. The Team also reminds WKCDA to achieve the objectives as stipulated in the WKCDA Ordinance, upholding both financial sustainability and the building quality of various facilities.

     Thank you, President.

Ends/Wednesday, March 20, 2013
Issued at HKT 15:53


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