November 03, 2005

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Privitising Disneyland

Every now and again even Legco can cause a surprise. And so it was yesterday, when Frederick Ma gave detailed costings of the Government's investment in Hong Kong Disneyland and told a Legco committee the Government may privitise its stake:

Less than two months after Disneyland Hong Kong opened, Frederick Ma said Wednesday that the government could sell off its 57 percent share in the theme park.

"In the long run, the government may consider, in the light of the big market, [the] small-government principle to divest its shareholdings in the company [Hong Kong International Theme Park Limited, a joint venture between US-based Walt Disney Corporation and the Hong Kong government], at an appropriate time when it is in the overall economic interests of Hong Kong to do so," Ma said during a Legco meeting...

Hong Kong Disneyland, Walt Disney's 11th theme park, is the only Disneyland to enlist a government as a shareholder.

"Big market, small government" in action:

Estimated spending on HK Disneyland by the HK SAR Government:

Reclamation and infrastructure works (roads, the Inspiration Lake Recreation Centre, decontaminating dioxin-laced soil and compensation to fishermen) = HK$13.6 billion

Land acquisition and clearance compensation = HK$1.6 billion

Equity injection into HKITPL = HK$3.3 billion

Loan to HKITPL = HK$6.1 billion

Waived claim to MTR Corp for dividends payable as support for the Disneyland Resort Line = HK$931 million

Total spent for HK$3.3 billion equity stake = HK$25 billion

Likely proceeds from privitisation, if Disney agrees (and I'm just guessing) = HK$3.5 billion

Combined with the repayment of the loan, total return to HK taxpayers = HK$9.6 billion

Total net loss to HK taxpayers = HK$15.4 billion

posted by Simon on 11.03.05 at 09:54 AM in the Hong Kong Disneyland category.


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But the sale of Disneyland shares is in the contract. it's not like he just came up with the idea.

posted by: donkey on 11.03.05 at 05:05 PM [permalink]

Do you have a copy of the contract? If so can you please send it to me.

The privitisation isn't really the point of this post. The point is even if they privitise the HK taxpayer is massively out of pocket on this park, having subsidised the whole edifice to the tune of HK$15 billion using the Government's figures.

It's a small world after all.

posted by: Simon on 11.03.05 at 05:10 PM [permalink]

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