The government yesterday announced to re-tender the Kai Tak cruise development project, citing previous submissions did not conform to tender requirements. The tourism sector found the announcement regretful and suggested the government take up project itself.

Pending lawmakers' approval of a funding of HK$1.8 billion to HK$2 billion in October, the government will bear the cost of site formation works and such related government facilities as police, customs, immigration and health quarantine facilities at the new cruise terminal.

The first berth of the terminal is expected to start operation in the second quarter of 2013 instead of the first quarter of 2012 as originally planned.

Last November, the government invited bids for the cruise terminal project and the tender exercise closed in March. Two tenders were submitted.

One of them called for hotel rooms to be individually sold off, while the other requested more commercial area.

The first bidder's request to have hotel rooms sold separately was tantamount to sale of residential units and that was not complying with town planning regulations, government sources said.

Meantime, the second bidder asked for 190,000 sq ft of land while the successful bidder would only be allowed to develop a commercial area of 50,000 sq ft.

Cheung Kong Holdings and Sun Hung Kai Properties are speculated to be the bidders, according to market sources.

Hong Kong Tourism Board chairman James Tien was disappointed by the tender result, saying it would affect the tourism sector and the visitor growth estimate for 2012.

He asked the government to review if the tender conditions were too stringent and re-tender the project as soon as possible.

Tourism constituency legislator Howard Young said he found the announcement regretful. Noting that foreign governments have financed the construction of cruise terminal facilities, he suggested the Hong Kong government do the same.

Chan Kam-lam, spokesman for the Democratic Alliance for the Betterment and Progress of Hong Kong, shared the same view and questioned if the government was too optimistic about the market response.

He suggested the government take up the project instead of re-tendering it.

Leung Yiu-lam, chairman of Hong Kong Inbound Travel Association, opposed to relaxing the tender requirements, saying it is no different than subsidizing the developer with taxpayers' money.

(HK Edition 07/10/2008 page1)