The Observation Wheel at the Central waterfront may be torn down if the current and the former land-lease rights holders fail to reach an agreement over the terms for resumption of operations.
After being shut down abruptly last week following the expiry of the old lease contract and a new entity securing the rights for use of the site, talks have been underway between the current and former tenants for a deal that can enable the giant Ferris wheel to be kept running.
However, the discussions appear to be caught in a deadlock, throwing the future of the popular tourist attraction in jeopardy, Apple Daily reports.
Located on a site close to Piers no. 9 and 10 at the Central harbourfront, the Hong Kong Observation Wheel, which opened for business in December 2014, ground to a halt last Tuesday.
The sudden closure caught almost everyone by surprise, with even the Hong Kong Tourism Board claiming that it did not receive any prior notice from the wheel’s operator, Swiss AEX.
Now, there are doubts whether the new land-lease rights holder, The Entertainment Corporation Ltd. (TECL), can keep the existing wheel spinning.
In a statement issued on Sunday, a spokesman for the Development Bureau said the government conducted an open tender exercise for a new three-year tenancy of the Observation Wheel site in November 2016 and that TECL won the tender on May 23.
The government has been in touch with both parties, hoping to assist them in communications in relation to the future of the giant wheel, according to the statement.
However, the spokesman added that the government “has not been involved in the commercial discussion between the two parties”, and it would not “comment on the commercial operation and financial arrangement involved in the discussion”.
According to the Development Bureau, TECL did well in terms of technical submissions, with the company displaying a “clear competitive edge” in relation to ticket pricing.
However, Swiss AEX disagreed over financial terms of a deal that could allow the new tenant to keep the existing wheel running, reports say.
TECL is believed to have rented the site for HK$1.5 million a month, almost double the HK$800,000 paid by Swiss AEX, and had put down a deposit equivalent to six-months rent.
Following negotiations between the two firms, Swiss AEX outlined its objections to payment terms and is also said to have questioned TECL’s operating experience, pointing out that the latter was founded only in 2016, and that it seemed to have no sound financial footing.
As the talks were in a stalemate, Development Secretary Michael Wong Wai-lun indicated that it is unlikely that the existing Ferris wheel will be kept in operation.
The new operator will decide if a new wheel will be put up as a replacement for the existing one. If a new wheel is installed, it could take several months or even a couple of years, observers say.
Swiss AEX must complete all the demolition and reinstatement works within the wheel site by October 31 so that the site could be handed over to the new operator, according to the Development Bureau.
Swiss AEX had said demolition of the Observation Wheel, which cost HK$200 million, could begin as soon as on Sept. 7 after it failed to renew its contract, hk01.com reports.
TECL, meanwhile, promised in its bidding proposal that it will operate a Ferris wheel with a diameter of at least 55 meters.
That means a new wheel could be smaller in size compared to the existing one, which stands 60 meters in diameter.
The Development Bureau said the commencement of wheel operations will depend on when TECL can secure relevant permits and licenses if it decides to build a new wheel.
The comments suggest that it will be a while before the public will be able to enjoy the Ferris wheel again.
Democratic Party lawmaker Hui Chi-fung said the government should be blamed for the possible idle period of the site.
Officials had only discussed the process of renewing the operating contract, but they failed to come up with a strategy to ensure a smooth handover, he said.
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