December 14, 2004

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The times they are a changin'

The tide is turning.

Two weeks ago the developers of a massive but vacant development in Hunghom announced they were going to demolish the new buildings and build luxury apartments. There was a public outcry, the Government quickly got on the bandwagon and the whole idea was abondended with indecent haste. Some jumped to the developers' defense, saying they were obeying the law and exercising their rights under contract. Luckily even the developers live in the real world, not a court room, and dropped the whole idea. Stephen Vines points out this is another victory for people power in HK.

This is the third major victory for people power in the past couple of years; the first, of course, being the shelving of the hated Article 23 legislation and the second being the scrapping of the super prison scheme. In some ways however this victory is more shaming because it exposes the government's impotence and incompetence. [T]he initial response of the government was to say that there was nothing it could do...It took no time at all for this vacuum of opposition to be filled by pressure groups and legislators. The acceleration of protest was fast. Relying on the impotence of the government and a dangerous disregard for the great unwashed, the developers issued a facile statement justifying their actions...

At every level this [Government] participation displayed at best incompetence and at worst unhealthy governmental collusion with the developers.

In the past HK's Government saw the property developers' as its main constituency. Which they were given the incestuous land auction cartel. The Government would restrict and parcel out tracts of land for development and developers would take turns in buying and turning them into flats. Now the public is realising they have a say in matters and the HK Government is slowly realising it too. Inevitably some tycoons will trot out their old warhorse of the damage such actions will have on HK's reputation as a financial centre etc. It's baloney and even they know it. Thomas Kwok, vice-chairman of massive developer Sun Hung Kai and part owner of the Hunghom development, said it would not undermine the economic environment. At the same time and more predictably Ronnie Chan Chi-chung of Hang Lung said it had "dealt a severe blow to investor confidence and Hong Kong was the most Communist place in China." Interesting vitriol from a man who's made his fortune in the "most Communist place in China". Maybe he should move to Shanghai and increase his fortune there?

There are two similar scandals brewing. Firstly there is the West Kowloon "cultural project", which is a massive property development on prime real estate dressed up in a cultural hub proposal. Expect the public opposition to the project to build after this success.

At least West Kowloon hasn't happened, yet. The Discovery Bay fiasco is a perfect combination of Government incompetence and property developers riding roughshod. Discovery Bay was initially to be a tourism project, a place for Hong Kongers to buy weekenders to get away from the rat race. But it quickly turned into yet another residential development. Under normal Government policy, such a change in the project would require the payment of a land premium fee, to reflect the greater utility of the land. Except it wasn't paid. At all. There are no records as to why it was not charged. The SCMP:

Other [Government] officials said they had no idea why the sum [land premium], which legislators estimate could be as high as HK$10 billion, was not collected after the developers changed the original plan from a holiday resort to a luxury housing development.

The Lands Department was also criticised in the report for failing to assess whether Discovery Bay's developers should be charged a land premium after changing the project's master layout plan eight times since the mid-1970s. Director of Lands Patrick Lau Lai-chiu said if today's government practices were applied 20 years ago, a land premium would have been charged for the change of land use in the master layout plan. But he said the government could find no record of why the money was not collected then and dismissed calls from committee members to recover the sum.

The Government's defense? The money cannot be considered as lost revenue because there's no evidence it should have been collected. A perfect catch-22: there's no evidence so the Government can't decide if something should be done. Makes you wonder what all these highly paid public servants do with their time. Best of all:
"The government did not charge the money then and if we collected it 20 years later, there would be big difficulties ... there will be a legal controversy," [Director of Lands] Mr Lau said.

It is understood that David Akers-Jones, who was then secretary for New Territories in charge of the project, and later became the chief secretary, will testify at a hearing next month. Sir David is retired in Hong Kong.

We can be thankful Sir David still lives in HK so that he can testify as to the events of 30 years ago. We're saving on travel and we get to see the Government's record keeping system: relying on the memory of former public servants.

For the sake of HK$10 billion, aren't a few "legal controversies" worth the trouble? Apparently not. Might scare away the developers from the "most Communist place in China".

By the way, anyone seen Tung Che-hwa lately? He needs to meet the people he supposedly represents. Not Beijing; not the property developers. It's the people of HK.

Update: Chris looks at the same themes from a different angle.

posted by Simon on 12.14.04 at 09:53 AM in the


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