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CY Leung interfered in Discovery Bay planning despite conflict of interest, paper claims

Chief Executive Leung Chun-ying has reportedly interfered in the processing of suggestions to increase development density and rezoning more residential land in Discovery Bay by its developer, who has close ties with Leung.

In an exclusive report by Apple Daily, the paper cited a government document that showed Leung instructed the district planning office under the planning department to follow up on two suggestions by the developer of Discovery Bay, HKR International (HKRI). The suggestions were to raise the overall development density of the area and rezone more land for residential use. The proposals could yield an estimated return of HK$14.7 billion for HKRI, according to the report.

cy leung

File photo. Photo: Apple Daily.

The chief executive’s connection with HKRI was publicised in a report last year by the Australian Fairfax Media, which stated that Leung had sought over HK$50 million in compensation from Australian firm UGL following the sale of the property company DTZ.  Leung headed the company’s operations in the Asia Pacific region just prior to his bid for the chief executive post in 2012. It was also revealed that Leung at that time held shares of DTZ Japan, currently transferred to a trust.

According to the Apple Daily report, HKRI is a long term customer of DTZ Japan, and properties of HKRI in Japan are still managed by DTZ Japan. The report concludes that there is a conflict of interest involved in Leung’s decision to interfere in the district planning office process.

Former ICAC investigator and current Democratic Party Executive Director Lam Cheuk-ting said that Leung’s role in the planning is unusual. Lam said that there are established policies and procedures regarding development planning, and asked for Leung to respond publicly. The Chief Executive Office did not respond to the claims made by the paper and has refused to reply to whether Leung has interests with HKRI, according to Apple Daily.

The first of the two proposals by HKRI involves raising the development density by 50 per cent, meaning the company could receive an extra 9.42 million sq. ft. of residential floor space. A revised proposal was given at a later date, reducing the floor space to around 980,000 sq.ft. Given local prices of HK$15,000 per square foot that would be worth HK$14.7 billion.

The other proposal was for the rezoning of two pieces of land at Discovery Bay – a slope west of 4 Parkvale Drive and Nim Shue Wan service area – amounting to a total of around 59,250 sq. metres (63,700 sq. ft.). The land of the Nim Shue Wan service area includes a 400 metre long waterfront promenade.

In the document received by Apple Daily, Leung instructed the district planning office to mail HKRI regarding their proposals and how the company plans to overcome issues with the foundations and environment. The two sides met in April 2014 and the second suggestion, for rezoning the two pieces of land, was discussed in another meeting in July 2014. The application has yet to be submitted to the town planning board.

Nim Shue Wan Service Area

Nim Shue Wan Service Area. Photo: Apple Daily.

The document further reveals that the government considered the suggestions difficult to implement. Apart from environmental and foundation constraints, the government has also signed agreements with Disneyland regulating the height of buildings near its park. Also, according to blueprints, there is currently still around 1.29 million sq. ft. of residential area space that has yet to be incorporated in the development, meaning the developable area has not been used up yet.

Discovery Bay District Councillor Amy Yung Wing-sheung voiced her opposition to the development plans. Yung said that Discovery Bay was originally meant to be a low density residential area and the proposals violated this original planning intent. The government document also stated similar concerns, that the new plans could “change the development concept of Discovery Bay”.

Neither the Planning Department nor HKRI has confirmed Leung’s involvement. However, the department has confirmed its meeting with HKRI in its response to the report.

CY Leung interfered in Discovery Bay planning despite conflict of interest, paper claims