11 April 2006
KCRC Awards Joint Venture for Tai Wai Maintenance Centre Property Development
The Kowloon-Canton Railway Corporation (KCRC) today announced that it has entered into a joint venture with the East City Investments Ltd. for the development of about 4,300 flats above the podium structure of the Tai Wai Maintenance Centre for the Ma On Shan Rail. The East City Investments Ltd. is a wholly owned subsidiary of Cheung Kong (Holdings) Ltd.
A KCRC spokesman said, "The award was made after careful consideration was given to all tenders which were evaluated strictly in accordance with the Corporation's tendering procedure. It represents a win-win situation.
"For KCRC, the Joint Venture Agreement (JVA) will commit the developer to the successful completion of the project with no option to withdraw. It ensures that KCRC's substantial investment in the podium structure, below which is the maintenance facilities for Ma On Shan Rail, will be fully recovered from the property development above.
"Under the terms of the JVA, KCRC will also receive a guaranteed payment from the developer, while the total amount received may increase in accordance with a fixed formula arrangement should the sales of flats exceed present expectations.
"The Government for its part will receive a substantial premium both from the development of the land for the maintenance facilities as well as from the property development, turning a greenfield site into a valuable revenue asset.
"The development tender document was structured for two separate packages, to enable more developers to participate. In the event, the East City Investments Ltd. was the successful tenderer for both packages in accordance with the tender rules established before tender return.
"Under the terms of the JVA, KCRC will retain a supervisory role and is confident that the project will be completed to a high standard of quality to meet the expectations of the final purchasers.
"The location provides excellent transport links throughout the whole of the territory and into the Mainland, particularly by railway. Convenient road access and the presence of an adjoining major shopping arcade will enhance the development's attractiveness.
"KCRC is pleased that this well sought-after property development is now underway following a very successful tender and the joint venture award," the spokesman said.
With a total residential gross floor area of 313,955 sq. m. the Tai Wai Maintenance Centre property development will comprise 12 residential towers producing 4,304 flats. The average flat size is about 73 sq. m.. The project is targeted for completion in phases by 2010.
The premium of the development will be paid in two phases. The Corporation has already reached a consensus with the Government's Lands Department regarding the premium of the first phase, which covers only Site B and Site D and for a total residential gross floor area of 200,744 sq. m.. Negotiation on the premium of the second phase, i.e. Site C, will be conducted at a later stage.