2003年10月4日 星期六

The Missing Partner in West Kowloon

It is rare to see government officials embarking on world record-setting, brave new acts these days. Yet Hong Kong is lucky to have witnessed one on September  3.


The Chief Secretary announced on that day an invitation to the private sector to submit a single bid for the West Kowloon Cultural District. The development covers 40 hectares, equivalent to one-third of Kowloon Peninsular, and comprises four museums, three theatres, one amphi-theatre among millions of square feet of shopping, residential and commercial facilities. By all measures, it resembles a condensed new town in the heart of Hong Kong .


When announcing the scheme, Mr Donald Tsang, head of the government steering committee, was proud that the authorities had adopted the Norman Foster design to put 20 hectares of facilities under the world’s single largest canopy. For all its mind-boggling luxury the proposal looks like another grand, exciting plan for Hong Kong until one starts to examine what is missing.


The scheme adopts a Public-Private-Partnership approach, under which a single developer will be asked to finance, construct and operate the facilities for 30 years or more. This approach, first practised in the UK in 1980s, is not new. It has been applied to single-purpose infrastructure facilities such as toll roads, bridges, power plants, hospitals and even jails in some countries.  Yet the West Kowloon scheme sets two world records for PPP schemes: its sheer size of 40 hectares and its diverse mix of facilities under one scheme.


So we are sailing into uncharted territory where no city has attempted before. In essence, we are handing out a concession for a new town – designed as a special cultural icon for Hong Kong – to a single developer. Is this a blessing?


The essence of a PPP scheme is for a private sector developer to take up the risks of funding, building and operating public facilities with the promise that it is allowed to run the public facilities along commercial, private-sector principles. Note the interplay of the words public-private in the previous statement.


Two issues are most tricky in any PPP scheme: firstly, how to allocate equitably the risks between the public and the private sector and secondly, how to safeguard public interest when public facilities are controlled and run by private interests?


The first issue of risk allocation sounds like a mere technicality but it has a huge financial implication for either sides. One has to look only across the border: many PPP, or build-operate-transfer schemes as they are often called, such as power plants or toll roads in the mainland are re-negotiated after only a few years into operation because making long-term forecast, and hence allocating project risks in a changing environment is an enormously difficult task. This is difficult enough for a single-purpose facility; it is almost impossible for a new town like West Kowloon . When schemes become unstuck, concession contracts will be forced into re-negotiation and the side that has most at stake is often bullied into submission. Judging from past experience in Hong Kong , the public purse almost always loses out when confronted with hard-nosed private operators.


The second issue reveals a fatal flaw in the current scheme. Public interest in a PPP scheme can only be safeguarded by the participation of the third partner – the civil society.


A little dose of history here may help. The size of the first foreign concession in Shanghai was 55 hectares, only slightly larger than West Kowloon . It grew 60 times larger in a span of 70 years.


 


 


2003年10月3日 星期五

A sustainable solution

While many officials are worried about the erosion of government authority in the heated debate on harbour reclamation, the sea change in public opinion opens the way for a sustainable solution to protecting our harbour.


The Conservancy Association has been a long-time advocate of minimum harbour reclamation, ever since the Port and Airport Development Strategy and the Metroplan were first published in 1989. Over the years, numerous submissions were made to the authorities to urge that proposed reclamation work be scaled down.


Under the present system, uneasy compromises were the best solutions at the time. Nonetheless, the reclamation would have been much more destructive had the original plans gone ahead without amendments.


For instance, over the last five years, the Conservancy Association has been the lone voice protesting to the Highways Department, which kept pushing for the construction of a temporary road cutting across Edinburgh Square in front of City Hall. Without objections, both the square and the Queen's Pier - a historical monument bearing witness to the colonial era - would have disappeared long ago. Today, both are earmarked for demolition should phase three of the Central reclamation scheme go ahead.


The extent of harbour reclamation should ultimately be a reflection of public values. Does the public prefer a wider harbour to the benefits that another road link might bring?


Each of the proposed reclamation works must be assessed with regard to its specific context and the prevailing values of the community. The events in recent weeks showed clearly that the yardstick against which proposed reclamation should be measured has changed, for two reasons.


First, the courts have adopted a stricter interpretation of the Harbour Protection Ordinance. Second, the public now places a much higher value on the integrity of the harbour than the potential benefits associated with any reclamation.


Both the government and civil society have a duty to respond to these changes and apply the new yardstick. The fate of the harbour should not be beholden to any vested interest.


On closer examination, the real culprit of these controversies is an outdated mode of governance. The current institutions in the Transport Advisory Committee and the Town Planning Board are designed to help smooth the way for a pro-development administration, rather than allow full reflection of community values in public policies. Nearly all major reclamation proposals were justified by the need to build more roads to meet increasing traffic demand. Not surprisingly, when more reclaimed land is developed, more traffic demand will be generated. This is a self-fulfilling prophecy which has helped to shrink our harbour in the past few decades.


In the current standoff, we suggest a four-step process to handle the immediate crisis and to put in place a sustainable solution.


First, we support a temporary freeze on all harbour reclamation, regardless of the impending court ruling. After all, prevailing public values are the ultimate determinant for the future of our harbour.


Second, the government should appoint an independent panel of experts, to be chaired by a member of the judiciary, to review the scale and rationale of all proposed reclamation. Society should be given the chance to participate through public hearings.


Third, the government should begin setting up a Harbour Conservation Authority to take charge of the planning and execution of all projects in the harbour area. It should be endowed with a clear mandate to break the vicious circle. A new mode of governance should be adopted, using a roundtable concept, encompassing equal representation from the government, the private sector and civil society.


Fourth, the Town Planning Board should be reformed to give the public better access to decision-making. Its structure and membership-appointment system should be reviewed and the loophole that means transport infrastructure is subject to less stringent scrutiny should be plugged. Such a redesign should take place in the spirit of partnership, rather than under an administration-led system.


In public policymaking, goalposts do move with shifts in community values. Crying foul is never a solution. A wiser strategy is to embrace the new paradigm.


Albert Lai Kwong-tak is chairman of the Conservancy Association.


(Published on 3 October 2003, South China Morning Post)


 


 


A sustainable solution

(Originally published in South China Morning Post, 2003-10-3 )


While many officials are worried about the erosion of government authority in the heated debate on harbour reclamation, the sea change in public opinion opens the way for a sustainable solution to protecting our harbour.


The Conservancy Association has been a long-time advocate of minimum harbour reclamation, ever since the Port and Airport Development Strategy and the Metroplan were first published in 1989. Over the years, numerous submissions were made to the authorities to urge that proposed reclamation work be scaled down.


Under the present system, uneasy compromises were the best solutions at the time. Nonetheless, the reclamation would have been much more destructive had the original plans gone ahead without amendments.


For instance, over the last five years, the Conservancy Association has been the lone voice protesting to the Highways Department, which kept pushing for the construction of a temporary road cutting across Edinburgh Square in front of City Hall. Without objections, both the square and the Queen's Pier - a historical monument bearing witness to the colonial era - would have disappeared long ago. Today, both are earmarked for demolition should phase three of the Central reclamation scheme go ahead.


The extent of harbour reclamation should ultimately be a reflection of public values. Does the public prefer a wider harbour to the benefits that another road link might bring?


Each of the proposed reclamation works must be assessed with regard to its specific context and the prevailing values of the community. The events in recent weeks showed clearly that the yardstick against which proposed reclamation should be measured has changed, for two reasons.


First, the courts have adopted a stricter interpretation of the Harbour Protection Ordinance. Second, the public now places a much higher value on the integrity of the harbour than the potential benefits associated with any reclamation.


Both the government and civil society have a duty to respond to these changes and apply the new yardstick. The fate of the harbour should not be beholden to any vested interest.


On closer examination, the real culprit of these controversies is an outdated mode of governance. The current institutions in the Transport Advisory Committee and the Town Planning Board are designed to help smooth the way for a pro-development administration, rather than allow full reflection of community values in public policies. Nearly all major reclamation proposals were justified by the need to build more roads to meet increasing traffic demand. Not surprisingly, when more reclaimed land is developed, more traffic demand will be generated. This is a self-fulfilling prophecy which has helped to shrink our harbour in the past few decades.


In the current standoff, we suggest a four-step process to handle the immediate crisis and to put in place a sustainable solution.


First, we support a temporary freeze on all harbour reclamation, regardless of the impending court ruling. After all, prevailing public values are the ultimate determinant for the future of our harbour.


Second, the government should appoint an independent panel of experts, to be chaired by a member of the judiciary, to review the scale and rationale of all proposed reclamation. Society should be given the chance to participate through public hearings.


Third, the government should begin setting up a Harbour Conservation Authority to take charge of the planning and execution of all projects in the harbour area. It should be endowed with a clear mandate to break the vicious circle. A new mode of governance should be adopted, using a roundtable concept, encompassing equal representation from the government, the private sector and civil society.


Fourth, the Town Planning Board should be reformed to give the public better access to decision-making. Its structure and membership-appointment system should be reviewed and the loophole that means transport infrastructure is subject to less stringent scrutiny should be plugged. Such a redesign should take place in the spirit of partnership, rather than under an administration-led system.


In public policymaking, goalposts do move with shifts in community values. Crying foul is never a solution. A wiser strategy is to embrace the new paradigm.


Albert Lai Kwong-tak is chairman of the Conservancy Association.