Hong Kong’s embattled cultural and leisure project must come up with an alternative financing scheme for its next phase of development.
Chief Secretary Carrie Lam wants the West Kowloon Cultural District Authority to find a way to plug a funding shortfall and ease financing pressure.
The Hong Kong Economic Journal is reporting there is not enough money to build the remaining facilities including a music center and a grand theater.
The authority has received HK$21.6 billion (US$2.79 billion) in government funding since 2008 when the project was approved by the Legislative Council.
In those 17 years, the fund is estimated to have earned a return of HK$4.6 billion, which means the authority sits on a cumulative total of HK$23.5 billion after stripping out related operating and capital expenditure.
The first phase of the project will be completed between 2018 and 2019.
This includes a cultural and arts center, restaurants and leisure facilities.
Lam, who chairs the authority, expects increased operating costs, with a projected HK$400 million loss in the first year operation.
Meanwhile, construction costs increased 180 percent in the past five to six years.
The authority is seeking rights to land development in the complex, hoping to earn from future leases.
Also, it is considering selling naming rights to buildings.
Translation by Vey Wong
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