Hong Kong’s development minister has dismissed concerns of potential collusion with developers as authorities plan to extend a land exchange arrangement to all new towns in the Northern Metropolis mega project to invite private sector participation.
Secretary for Development Bernadette Linn Hon-ho on Sunday pledged to announce more details related to the mechanism, under which authorities would allow land owners to keep their plots in the new towns, build developments in line with zoning uses and pay for increased land value through premiums.
The government would still reclaim the land and provide compensation if the response from the private sector was lukewarm, Linn said.
“I hope society can understand that private participation in land development does not imply collusion,” she told a radio programme.
“Things that are being done for development are in line with what society wants, and private developers must pay the land premium. Therefore, I believe that everything is being done under the sunlight.”
She said the government could benefit from the land premium income and the mechanism would help speed up development.
Launched in 2014, the land exchange arrangement in the New Development Area is currently only applicable to Kwu Tung North and Fanling North. The first phase was completed in 2017 and saw the approval of two applications.
Hong Kong to help finance Northern Metropolis project with land exchange scheme
Hong Kong to help finance Northern Metropolis project with land exchange scheme
About 20 applications were received in the second phase, which began last year and is set to conclude by the end of December.
Out of these applications, Linn said seven cases met the government’s requirements, with six of them currently engaged in discussions related to the land premium. The seven sites could yield 9,000 flats if developed, she added.
In case a consensus could not be reached on the land prices, Linn said the government would still reclaim the sites and provide compensation to owners.
With plans to extend the land exchange arrangement to all new towns as proposed in the government’s second policy address last month, the administration also suggested expanding the designated zoning use beyond residential and commercial purposes to include welfare and industrial uses, such as for logistics activities.
But Linn said the arrangement would not be applied to land parcels in San Tin that were earmarked for the innovation and technology industry as the government had its own plans and targets.
She added the government would also offer help to major land owners, who possessed at least 90 per cent of a site and had difficulties in gaining ownership of the rest and that that authorities would provide compensation and take back the remaining 10 per cent of the land and pass it to the private sector for development.
Under the Northern Metropolis plan, 30,000 hectares of land located in the Northern parts of the New Territories along the city’s border with mainland China will become an economic powerhouse and a residential hub in the coming 20 years.
Hong Kong looks to mainland China, overseas institutions with university town
Hong Kong looks to mainland China, overseas institutions with university town
On top of the current 400,000 flats, the megaproject will yield more than 500,000 new homes and accommodate 2.5 million residents in total.
Authorities aim to lay out development plans for all the new towns by 2024 and commence land reclamation procedures for all major developments by 2027, hoping to complete building 40 per cent of the flats by 2032.
Linn also stressed that the government would not slow down its progress in creating land supply despite a number of land tender withdrawals and an economic slowdown.
“We can imagine the recent land tender withdrawal cases are related to the weak local and international economy,” she said. “We will not modify the land use due to land withdrawal. Or else, it will affect our land deployment.”
Hong Kong’s Paul Chan defends economic potential of land-reclamation projects
Hong Kong’s Paul Chan defends economic potential of land-reclamation projects
She added that land bids could succeed when the government sold the land after a few months in past experiences, depending on the market conditions and whether bidding terms were modified.
The government recorded two land tender withdrawal cases in the 2023-24 financial year. It only sold two residential plots in the past seven months.
Rail operator the MTR Corporation earlier this month also failed to attract any property developers to jointly develop a large-scale mixed-use property project in Tung Chung.
The city also had three other tender cancellations between January and March, on land offered by the government, the MTR Corp and the Urban Renewal Authority.
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