18 March 2019
The Hong Kong Observation Wheel was built by Swiss AEX which rented the waterfront site for three years. It may have to tear the wheel down after losing the site to a new tenant. Photo: HKEJ
The Hong Kong Observation Wheel was built by Swiss AEX which rented the waterfront site for three years. It may have to tear the wheel down after losing the site to a new tenant. Photo: HKEJ

Wheel row: How bureaucrats are taking everyone for a ride

When news started swirling three years ago that a Ferris wheel would be erected on a newly reclaimed plot on the Central waterfront, questions were raised by unimpressed observers who asked if the wheel, dwarfed by surrounding skyscrapers, was really needed at all.

Much of the suspicion was centered around the size of the Hong Kong Observation Wheel. With a diameter of merely 60 meters, it’s just a third of the height of some of the world’s largest wheels of the same kind, like the High Roller in Las Vegas, which tops out at 167.6 meters, the 165-meter Singapore Flyer, the 135-meter London Eye, and many others.

But somehow the wheel operator, Swiss AEX, could be forgiven for its circumspection against adding a decent attraction that could genuinely match the harbor: the site was rented out for just three years and the wheel would have to be dismantled upon the expiry of the lease, no matter what. Who would splurge huge money on a temporary project? The conservativeness makes commercial sense.

Still, the miniature local wheel has gradually piqued the interest of tourists as its prime location against the glinting skyline has compensated for its shortcomings. Anyway, who would mind boarding a crystal cabin for a ride while the renowned harbor spreads out before you? The market response has been better than expected: some five million visitors have taken a spin since the wheel’s inauguration in December 2014, two million more than initial estimates.

So when the wheel is beginning to enter travel guide books as one of the few novelties that Hong Kong can offer to newcomers and returning visitors, a row between the current tenant of the plot and the new operator ground it to a standstill.

Wheel and deal

Since the government has not mandated the use of the existing wheel by the new operator, the worst-case scenario can be that Swiss AEX, no longer the tenant of the wheel site, will have to tear down the wheel before the end-October expiry of the existing lease, leave the parts to rag-and-bone men, and turn the harborfront fairyland into an eyesore of fallow ruins, spoiling the spirits of countless sightseers.

The Central wasteland may be there for years until a new wheel, to be built by the new tenant, The Entertainment Corp. Ltd. (TECL), starts turning.

The crux of the row is that Swiss AEX was outbid by the TECL in an open tender for the next three years to 2020, although caveats had been given by members of the Central and Western District Council as well as the Harbourfront Commission that awarding a new lease to another bidder rather than renewing the existing one with Swiss AEX could result in some “window period” in which the wheel may have to be shut down or even demolished once there’s any dispute in the transition process.

But the well-paid and well-meaning bureaucrats at the Development Bureau still decided to play by the book and called for tenders, probably dreadful of any accusation of colluding with the current tenant.

TECL’s agreement to almost double the monthly rent to HK$1.5 million and slash the admission fee to HK$20 from the HK$100 are said to be the key merit in winning the new lease.

Hung out to dry

Still, whether the wheel can get a new lease on life is up in the air.

Swiss AEX, understandably embittered by the tender setback, has come up with a whopping asking price of HK$150 million for the wheel if TECL wants to spare itself from the trouble of building a new one from scratch, but the latter is only willing to pay no more than HK$40 million.

The negotiation has obviously become a bit of argy-bargy, with Swiss AEX questioning the new tenant’s qualifications while the latter is threatening it would rather build a new wheel on its own if the difference in price cannot be narrowed.

But even if the wheel site can be handed over to the new tenant in due course, will the same farce occur again in three years’ time?

The fact that Hong Kong’s only Ferris wheel is shut down not for mechanical issues but for a spat between old and new operators as well as the inflexibility and ineptness on the part of our officials is becoming an international laughing stock, when enthusiastic visitors from home and broad continue to be turned away at the wheel’s entrance days after the closure.

The world would be further amazed by Hong Kong’s way of doing things if the wheel, still in mint condition, is pulled down and replaced by an even smaller one. TECL reportedly may build a wheel of about 50 meters high.

The public is questioning why such a prime waterfront lot is rented out for merely three years with no guarantee of renewal, forcing any tenant to reap quick return rather than long-term investment. Do officials like Secretary for Development Michael Wong care more about their own reputation than the image of Hong Kong as a tourism hub? It appears that these officials don’t bother acting as a mediator.

Chief Executive Carrie Lam has also ruled out stepping in, stressing the chief executive would never get involved in a simple open tender process and all parties should respect contracts. But she did admit that relevant bureaus can find room for improvement.

“The government has already approved demolition permits and, notwithstanding the last tenant’s request to reopen the wheel, unless it could reach an agreement with the new operator to retain the facility, the site must be vacated by October 31,” the Development Bureau said in response to media inquiries.

“If the new tenant is building a new wheel, the timing for commencement of operations depends on the approval of relevant permits and licences.” 

It has been reported that Lan Kwai Fong Group chairman Allan Zeman has been actively engaging both parties for a solution, but it remains to be seen if the wheel row can take a miraculous turn.

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The wheel has become one of the few novelties that Hong Kong has to offer to newcomers and returning visitors despite its small size. Photo: HKEJ

Tourists like the ride against the glittering skyline and the harbor. But the fate of the wheel is up in the air. Photo: HKEJ

A view of Central from inside a capsule on the Hong Kong Observation Wheel. Photo: Bloomberg

Allan Zeman (left) is seen with Swiss AEX director Leon Snep in front of the wheel in 2014. Snep once gave a thumbs up to Hong Kong for efficiency, Meanwhile, Zeman is making a last-ditch effort to save the wheel. Photo: Handout

EJ Insight writer

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