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designing hong kong
My Dream: A permanent traffic jam...
The Chief Executive has a dream: For the tax payers to pay - with hard cash and land - for yet another expansion of the Hong Kong Convention Exhibition Centre (HKCEC) and in return earn themselves a permanent traffic jam.

.. and perpetual profits for New World and bonuses for TDC Directors
The only winners of the plan are New World Service Holdings which has an iron clad contract with guaranteed profits (over 90% of all takings) for managing HKCEC into perpetuity without having to make capital investments. And the management team of the Trade Development Council (TDC) wins as the expansions guarantee them a monopoly in trade shows and the best paid jobs in town.

Gives you something to think about next time you are stuck in traffic in Central and Wanchai.

Phase 3 Expansion of the HKCEC: Dream or nightmare?
On 22 July 2009 - The Chief Executive in his speech at the opening of the Phase 2 expansion of the HKCEC: "Government and the TDC are actively examining ... Phase 3 expansion ... we will ... move existing government buildings and public facilities to make room ... the TDC has made a very strong case ... Phase 3 remains my dream."

(Click here for the Government Press Release, the video of the speech, an article in The Standard, or the press release by the TDC.)

The mother of all traffic jams
On 24 October 2009 trucks unloading goods at the Convention and Exhibition Centre in Wan Chai caused traffic gridlock across Central with police reporting problems stretching 2.5 kilometres to the Shun Tak Centre in Sheung Wan. The trucks kept their engines running, sending plumes of foul exhaust fumes into the air. The HKCEC was reported to host Mega Show Part 2 - Gifts, Decor and Home, the Trade Development Council's International Lighting Fair and the UK Education Expo was just winding up. It was reported that the HKCEC could not be reached for comment.

(Click here for SCMP report and RTHK Chinese News report)

But the HKCEC wants to become even bigger
Just three days after the massive traffic jam, the South China Morning quoted Cliff Wallace, New World's Managing Director responsible for the HKCEC, at length about the benefits of expanding the HKCEC further.

(Click here for the 27 October 2009 SCMP report)

Traffic in Wanchai can't absorb another expansion of the HKCEC
In 2004, right after the HKCEC caused another massive traffic jam (23 October 2004) we objected strongly to further expansions on the basis that traffic problems in the area can never be resolved. Our view was confirmed in the 2005 submission by the Transport Department to the Expert Panel of the Harbourfront Enhancement Committee which shows that even after completion of the Central Wanchai Bypass the critical junctions in Wanchai North will be near capacity - note that the Transport Department's figures did NOT take a future third expansion of HKCEC into account!

(Click here for our 2004 newsletter, and here for the TD's Submission)

We support new MICE facilities - but not in Wanchai!
We support additional convention and exhibition facilities in Hong Kong. Last week we convinced the Town Planning Board to amend a zoning in West Kowloon to allow for meeting, convention and exhibition facilities. There is ample room for expanding AsiaWorld Expo's exhibition facilities at the Airport. There are opportunities for facilities in Kai Tak and close to the border. It is unsustainable to add ever more activities along Hong Kong Island's northern shore. We have strong doubts that the new underground Central-Wanchai bypass will be able to resolve existing traffic congestion, let alone absorb new traffic.

So why do TDC and New World fight for expanding the HKCEC?
93/94 Legislative Council documents (no copies on the web) show that TDC has signed an agreement which stops it from using any other facility in Hong Kong. New World Service Holdings, with the Chief Executive's brother Tsang Yam-pui now as its Executive Director, has through its subsidiary Polytown an iron clad contract with the TDC for managing its HKCEC facilities. It includes a non-competition clause which states that neither the TDC nor New World shall during the term of this agreement develop or co-develop any exhibition facility other than the HKCEC. The agreement signed around 1988 is for 40 years and is extended automatically every 10 years thereafter as long as New World does not mess up. (Will TDC write to New World that the failure in marshalling traffic last Saturday was in breach of its performance obligations?)

It's a gold mine for
New World and TDC management!
In return for building the first 30,000sq.m. of the HKCEC in 1984, New World got the 370,000sq.m. of development rights (including two hotels, Grand Hyatt and the Renaissance, an office block, apartments and a carpark) for free under a 75-year lease. The HKCEC facilities are owned by TDC and opened in 1988.

New World did not have to pay for the two expansions of the HKCEC - the taxpayers did. With a grant of land and 4.8bln in 1994 the HKCEC was expanded with 40,000sq.m in 1997. And with 1.4bln from the TDC reserves in 2005, the HKCEC was expanded with another 20,000sq.m. in 2009. Bringing the total rentable area to over 90,000sq.m.

In the meantime, as the manager,
New World takes all of HKCEC's operating revenues which have grown with each expansion. It pays TDC a fee of around 8% (used to be less than 5%) of the revenues. Without the burden of operational responsibilities or related cost, TDC has thus enough to reward its executive director with more than HK$6 million for his performance, and the TDC top management in total more than HK$21 million, as reported in their recent annual report.

Imagine what a further expansion of the HKCEC at the expense of taxpayers will do for New World's profits and TDC's management ‘performance' pay!

Imagine what a further expansion of the HKCEC will do for the tax payers who have to commute through Wanchai and Central!

Again - now who benefits from the CE's Dream?

Links to some relevant papers:





















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