Written by 
Stacy Shi
The Urban Renewal Authority is considering developing the Kai Tak Road-Sa Po Road project in Kowloon City by itself although that might lead to financial pressure or a retender could just be conducted, says managing director Wai Chi-sing.
Writing on his blog yesterday, Wai said opting to not award the tender to CK Asset Holdings, the only developer to submit a tender, was a responsible move.
He said the project will serve a significant role of facilitating connectivity between Kowloon City and Kai Tak, which will also benefit the surrounding neighborhood.
”If the project is stalled because of failed tenders, it will not only affect the rejuvenation of the old area of Kowloon City and connectivity with the Kai Tak development but also slow down the progress of the [neighboring] Nga Tsin Wai Road redevelopment project,” Wai said.
He said the authority will first assess its financial situation and the risks before deciding whether to develop it on its own or retender the project based on factors such as planning relevance between this project and others, first-hand private residential flat supply and changes in interest rates.
Wai also said the authority’s cash flow should be sufficient to afford acquisition expenses for this and next year. It is considering issuing bonds or obtaining syndicated loans “at an appropriate time.”
The authority issued HK$12 billion in August, which Wai said would help meet the acquisition expenditure of about HK$30 billion for both 2024 and 2025.
”In order to maintain healthy finances and cash flow, it is necessary to carefully consider the timing and pace of the acquisition of various projects and to keep expenditures within the limits of revenues, especially when it comes to the acquisition of large-scale redevelopment projects.”
Regarding projects that have yet to be put up for tender, including Shantung Street-Thistle Street, To Kwa Wan Road-Wing Kwong Street and Kwun Tong Town Centre Development Area 4 & 5, Wai said the authority will take external factors such as cash flow, the global economy and the local property market into account in making careful arrangements.
Lawmaker Kwok Wai-keung, a nonexecutive director at URA, told The Standard the authority’s announcement was not aimed at enticing bids.
Kwok said the authority is instead more inclined to explore approaches to independently develop the project, considering its financial status and the imperative of advancing Kowloon City’s development.
”Given the long-term nature of the project, the authority may also consider retendering after a certain level of development – like 20 to 30 percent,” he said.
Hong Kong Institute of Surveyors president Francis Lam Ka-fai is worried the authority will face additional financial pressure if it chooses to develop the project on its own. Lam also believes a lukewarm response to an individual project does not directly indicate a lack of optimism regarding the redevelopment of Kowloon City.
”Developers may still bid for more attractive projects in the future,” he said.
stacy.shi@singtaonewscorp.com