As part of a scheme to develop affordable housing the HK Government sold prime land in Hunghom to developers. The apartment blocks were finished in late 2002, by which time the scheme (called the Home Ownership Scheme or HOS) was suspended as part of Government attempts to revive HK's property market. The towers thus sat empty for over a year. At the start of 2004, with the property market now in an upswing, the developer forfeited the Government compensation offered due to the suspension of HOS. Instead the developer paid a land premium (a kind of windfall tax) to the Government and took full possession of the blocks. And now, exactly two years later, the developer has proposed the inevitable: it is going to demolish these brand new, never lived in flats and will rebuild the blocks as luxury apartments instead. Estimated windfall to the developer: HK$6 billion!

Green groups are protesting the massive amounts of waste from the project. The developer has responded that it will "recycle" 95% of the 190,000 tonnes of waste. They've even taken a helpful 2 page spread in the SCMP to explain themselves, complete with green headlines, an "artist impression" a defense of its actions under headlines "A difficult dilemma", "Optimal land use" and "Social and economic gains". Curiously no mention of the expected massive profits.

The advert even contains a "Recycling flow chart". When they say recycle, what they actually mean is everything will be sold on the Mainland - the toilets, baths, kitchens, faucets, doorknobs, steel, aluminium, wood, crushed concrete. Everything. "Only a few thousand tonnes" of non-recycleable materials are destined for landfill and the developer will make donations to compensate.

The real scandal is how the Government has allowed this to happen. The advert correctly states:

From the time we purchased the project to announcing today's decision to redevelop, every step has been reasonable and lawful. This is also a decision in our shareholders' interest.

Update: John (an ESF student made good) points out a deluded BBC article praising another of HK's magnificently wasteful property projects: Cyberport. Reading the report you'd think it was heaven on Earth. Which it most certainly is if you enjoy a vast office block with no-one in it, a hotel no-one stays in and a massive taxpayer gift to a favoured tycoon. See this post for more on this residential property development masked as a technology park.