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The Highways Department expressed hope that granting early development rights for three residential sites will ease financing pressures for the operator of the Smart and Green Mass Transit System (SGMTS) in East Kowloon, given the project’s large scale and capital-intensive nature.
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The remarks follow a previous announcement that the government will offer these three residential sites at a nominal premium to the future franchisee when the project invites public tender this July.
The three sites are the Depot Site at Ma Yau Tong, the Kai Tak Site, which comprises Sites 3E1 and 3E2 in Kai Tak, and the Cha Kwo Ling Road Site at Cha Kwo Ling Road and near Kwun Tong Road.
Speaking on a radio program on Monday, Principal Government Engineer (Railway Development) Eddie Leung Siu-kong noted that the project will serve a population of 30,000, with ticketing revenue expected to cover operating expenses.
However, given the massive scale of the development, the successful bidder will need to inject a substantial amount of capital. The government hopes to draw on the successful experience of the “Rail-plus-Property development” model to secure financial support, he said.
Leung noted the 20-year franchise term is set to boost competition and flexibility, making the project more appealing overall. He added that the department has formed a new Railway Checking Unit to expedite infrastructure reviews, targeting the project’s opening by 2033.
The transit system will connect the MTR Choi Hung and Yau Tong stations, and is projected to funnel 16,000 passengers per hour into the heavy rail network.
Leung said that after local consultations and site inspections highlighted connectivity challenges to the United Christian Hospital, the alignment was adjusted to move the Shun On station closer to the medical facility. The design also leaves room for future extensions toward Tsz Wan Shan or Po Lam. The upcoming tender will serve as a platform to gauge operators’ views on implementing these solutions, he said.
Tony Wan Wai-ming, president of the Hong Kong Institute of Surveyors, praised the government’s approach as a smart move given current fiscal constraints.
He noted that offering land development rights at nominal premiums in prime urban locations, particularly the highly attractive site in Kai Tak, is an effective way to bridge the funding gap.
Wan added that while the traditional “Rail-plus-Property development” model requires the railway to be completed before property development can begin, providing external sites allows developers to generate income much earlier.
He believed that the open tender would draw seasoned mainland and overseas rail investors. They are likely to adopt local development models and seek partners.
