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The development of the cruise terminal has been delayed by at least 18 months.
Confirming the move yesterday, Commerce and Economic Development minister Frederick Ma said the government would retender the project later this year and hoped the first berth could become operational by the second quarter 2013.
This is about 18 months later than the February 2012 deadline given by the government in the original tender which closed last March. The first of two berths would be capable of handling ships of up to 220,000 gt.
He said the government would change the tender conditions so that the government would finance the construction of extensive site formation works and the creation of public facilities instead of the private sector.
The site works include a landscaped deck of at least 22,000 sq m while the public areas included facilities for customs, immigration and police.
He hoped the change in the conditions would attract more potential bidders for the terminal which is earmarked for an iconic site at the former Kai Tak international airport in the middle of Hong Kong’s Victoria harbour.
Just two groups submitted bids by the March deadline.
One came from a consortium comprising Canada’s Ceres Terminals and Cheung Kong, which is controlled by Asia’s richest man, Li Ka-shing, who also owns Hutchison Port Holdings.
The other was from a joint venture which involved Star Cruises, Nan Fung Development, Sun Hung Kai Properties and VXL Capital. Star Cruises is one of the largest cruiseship operators in Hong Kong, with two vessels homeported at the territory’s existing Ocean Terminal.
Rejecting both tenders, the government said neither fully conformed with the requirements laid down in the tender document. “One of the tender submissions requested hotel rooms to be individually sold off, while the other requested to develop more commercial area,” the government said.
Mr Ma indicated that both the Ceres-Cheung Kong group and the Star Cruises consortium had baulked at funding the high cost of public infrastructure facilities without an adequate return.
He said: “Through the last tender, the market was tested and the response demonstrated that the project with the current terms and conditions lacked attractiveness to the market, and that the market was not willing to take up the project.”
Mr Ma added: “To ensure open and fair competition, and after careful consideration, the government decided to re-tender the project. Subject to funding approval by the Legislative Council, the government aims to retender by the end of this year.”
The government hopes to award the cruise terminal tender by the third quarter 2009.
The terminal will be built on a 7.6 ha site on Kai Tak airport’s former runway. The facility will contain a 30,000 sq m baggage-handling area and a maximum of 50,000 sq m of space for hotels, shops, conventions and commercial offices.
A second berth, which could also handle vessels up to 220,000 gt or preferably two smaller liners of around 80,000 gt, would be completed after 2015.
Mr Ma reiterated the government’s plan to develop Hong Kong into a leading cruise hub in the region. This comes as the number of port calls by cruiseliners has edged up over the last few years. Officials said there were 44 port calls in 2006, rising to 49 calls last year and a projected 59 in 2008.
The government estimated the new cruise terminal facilities would generate economic benefits of up to HK$2.2bn per year by 2020.
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