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The Urban Renewal Authority (URA) is studying the feasibility of developing the Kai Tak Road/Sa Po Road project on its own in terms of planning and community benefits, as the failed tender on the single project will affect the whole progress of the Kowloon City redevelopment plan.
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In his weekly blog, URA's managing director, Wai Chi-sing, said only one tender was received for the Sa Po Road project—expected to supply around 810 flats—and the board agreed last Tuesday (Oct 29) not to award the tender.
Wai said the URA team is exploring a self-initiated approach to the project regarding the development costs and risks involved, as well as the planning and community benefits the project brings.
He noted that if the Sha Po Road project is stalled due to the lengthy re-tendering, it will slow down the progress of the redevelopment plan for Kowloon City.
This followed the Authority's report of a HK$3.9 billion deficit in the previous year—its second consecutive year of losses—as the city's property developers were more cautious in their investments amidst the complex global economic environment.
Wai said the HK$12 billion bonds issued will be sufficient to cover the estimated total acquisition cost of around HK$30 billion for the financial year 2024/25 and the following year. However, to maintain stable finances and cash flow, it's crucial to consider the timing and pace of acquisitions while staying within budget, especially regarding large-scale redevelopment projects.
Wai added that, depending on the tender results and redevelopment projects, URA will consider issuing new bonds or securing syndicated loans at the right time.
