HK Govt, PCG and Yahoo! Rally Against Cyberport Critics
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The Hong Kong financial secretary, Donald Tsang, rejected widespread criticism of the government's choice of Pacific Century Group (PCG) as a developer of the HK$13 billion (US$1.7 billion) information technology business park, dubbed Cyberport.
The governments selection of PCG, a corporation controlled by property tycoon Li Ka-shing's son, Richard Li, has been met with calls of chronyism from the local press and industry since it was announced earlier this month.
The harshest critics have said that it is just an attempt by the Li family to circumvent the normal bidding process for government land by dressing it up as technology infrastructure project.
Tsang responded on Wednesday at a seminar covering the project, "The Cyberport will be part of the SAR's infrastructure. It's very wrong to say that the Cyberport is a property development."
It was the second government denial of special treatment towards PCG in as many days.
The government claims that Li's group is uniquely qualified because it is a development corporation that also has expertise in information services. Li's group has a joint venture with Intel, Pacific Convergence Corp., which provides interactive digital services and broadband capabilities.
K. C. Kwok, the secretary for information technology and broadcasting, also defended the selection of PCG.
"The Cyberport is not residential development." stated Kwok. "It is a information infrastructure."
One third of the site will be taken up by residential properties which the PCG and the government hope will cover the costs of the development when sold.
Otherwise, according to Kwok, "Even if the revenue gained from the sale [of residential properties] is not sufficient, Pacific Century will meet the construction costs."
"We need a high quality living and working environment if we are going to attract overseas talent and provide them with long term career opportunities," said Kwok. And the Cyberport will fulfill these needs.
Richard Li, PCG's Chairman, stipulated at the seminar that Hong Kong had ". . .to overcome potential weaknesses and limitations in order to attract leading edge "brains" and promote industry clustering."
Li said such weaknesses included high cost base, undesirable environmental and living conditions, and no shared sense of the way forward.
"Leveraging our strengths will help us reach our goals, progress up the value chain, and [promote] global expansion of our existing industry base," said Li.
Developing the Cyberport will be accomplished by the Hong Kong Government providing the property site as its equity contribution and PCG making a capital contribution of about HK$7 billion (US$900 million) to the whole development.
Before any surplus from the sale of the residential development is shared, according to government officials, HK$200 million (US$25.8 million) will be put into a development fund for the maintenance and refurbishment of the Cyberport.
Officials also said that the Cyberport will accommodate over 30 large to medium sized companies (100-500 employees) and about 100 smaller companies (less than 50 employees). In full operation, the 260,000 square meter complex is projected to provide 12,000 jobs.
Eight multinational corporations have signed MOU's to become anchor tenants at the Cyberport if it is completed including Hewlett-Packard, IBM, Oracle, Pacific Convergence Corp., Softbank, Sybase, Yahoo! and mainland-based systems integrator Hua Wei.
Savio Chow, the managing director of Yahoo! Asia, stated at Wednesday's seminar, "We are confident that the Cyberport will cultivate Hong Kong's development of it's own IT industry."
Chow believes that the project will enhance Yahoo!'s business opportunities in the SAR.