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Consulting firm Arup used confidential gov’t data in developer’s Wang Chau bid – report

Engineering giant Arup Group allegedly used confidential information from the Hong Kong government in New World Development’s application to build luxury homes in Wang Chau, Apple Daily reported.

According to documents exchanged between New World Development and the Town Planning Board last year, Arup’s Hong Kong office, Ove Arup & Partners, was hired by both the government and the developer to provide consulting services for two housing projects in Wang Chau.

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New World Development’s application site in Wang Chau. Photo: Google Earth/HKFP.

UK-headquartered Arup is a global engineering firm whose signature projects in Hong Kong include the Two International Finance Centre, the Guangzhou-Hong Kong Express Rail Link, and Hong Kong International Airport’s ground transportation centre.

New World Development applied to rezone a plot of land in Wang Chau in order to build high-end apartments. The application site is next to the proposed Wang Chau public housing estate, which has been at the centre of controversy after news reports revealed that rural strongmen allegedly “soft lobbied” the government over plans for the area.

In a report published by the Civil Engineering and Development Department in September last year, the department asked Arup to “clarify the sources of information… which are not known to the general public” used in its assessments on New World Development’s Wang Chau proposal.

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The Civil Engineering and Development Department asked New World Development and Arup to clarify their sources of information last year. Photo: Apple Daily.

In reply, Arup said that it had revised three impact assessment reports on traffic, drainage and sewage based on the government’s comments, and re-submitted the documents in the same month.

Apple Daily, comparing the original and revised versions of the three reports, said that much of the information used in the original version was subsequently removed.

For example, Arup cited data from the Planning Department’s “Territorial Population and Employment Data Matrix” in the original reports to show that development would not lead to overcapacity in Wang Chau in terms of traffic and sewage. The data was removed in the revised versions of the reports.

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Arup’s impact assessment report for New World Development. Photo: Apple Daily.

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Arup’s impact assessment report for New World Development. Photo: Apple Daily.

The Planning Department said that it had never disclosed the data matrix to any companies, including New World Development. It added that the data matrix was for internal use only, and while the government may provide such data to consulting firms, those firms would have to guarantee that they would not use the data for other purposes.

Apple Daily’s report concludes that Arup’s data likely came from its own assessments on the government’s Wang Chau proposal. In other words, Arup may have contravened its agreement with the government.

Another example is Arup’s statement in its traffic impact assessment report that a single two-lane public road constructed by the Civil Engineering and Development Department was “tentatively scheduled for completion by year 2024.” The date is not publicly available, but a “tentative implementation timetable” was mentioned in a Wang Chau research brief issued earlier by the government.

The completion date was also removed in Arup’s revised report to the government.

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Arup’s traffic impact assessment report. The highlighted text was removed in the revised version. Photo: Apple Daily.

Personnel overlap

In addition to the alleged unauthorised use of data, Arup’s two projects for the government and New World Development were headed by the same consultants, according to Apple Daily.

For example, Arup’s Hong Kong director Carmen Chu has approved the traffic impact assessment reports on both New World Development’s proposal and the first phase of the government’s Wang Chau public housing plan.

Arup’s director Sam Tsoi has also approved an air ventilation assessment report on the government’s project and a tree conservation report on New World Development’s proposal.

It is unclear how many consultants have simultaneously worked on both projects, as the government has not disclosed its feasibility report on Wang Chau.

Engineer Albert Lai Kwong-tak of the Professional Commons NGO told Apple Daily that while it is unavoidable for the government and companies to hire the same engineering consulting firm given the limited options in the industry, those firms should have a firewall policy in place in cases of conflict of interest.

Lai urged the government to disclose the relevant documents as soon as possible.

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Greenbelt land currently owned by New World Development in Wang Chau. Photo: Stanley Leung/HKFP.

New World Development said that the company does not instruct Arup on what data to use or interfere in Arup’s work. It did not comment on whether it had seen the impugned information.

In the recent Wang Chau controversy, the government was accused of scaling down a plan for 17,000 public housing flats to 4,000 units in order to avoid conflict with rural leaders. The government denied striking deals with anyone.

HKFP has contacted Arup for comment.

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What is the Wang Chau controversy?
Chief Executive Leung Chun-ying has been forced to explain a decision to construct 17,000 public housing flats in Yuen Long in separate phases. Plans to build 13,000 units on a Wang Chau brownfield site occupied by a rural strongman’s car park were postponed, whilst a proposal to build 4,000 flats on a nearby greenbelt site occupied by non-indigenous villages was approved. As evidence of off-the-record lobbying with rural leaders emerged, a blame game ensued as the government stood accused of bowing to pressure from rural bigwigs at the expense of villagers.

The scale of the project may be scaled back further, as rural leaders object to the project hurting the area’s feng shui – a Chinese philosophical system relating to harmony with the environment. The phase of 4,000 units will be close to hillside graves.

Who is involved?
The controversy was the centrepiece of incoming lawmaker Eddie Chu Hoi-dick’s election campaign, and his win helped bring the issue to the fore.

Chief Executive Leung Chun-ying is also directly involved as he was the chairman of a task force on the project. Leung said that he made the decision to conduct the project in separate phases in January 2014, after the housing bureau suggested it to him. The housing bureau made the suggestion after two informal meetings with rural leaders in July and September 2013. There were no records of minutes of the third informal meeting in March 2014.

The rural leaders informally consulted were former Yuen Long District Council chairman and lawmaker Leung Che-cheung, district councillor Tang Hing-ip, Ping Shan Rural Committee chairman Tsang Shu-wo, vice-chairman Tang Tat-sin and Heung Yee Kuk councillor Tang Chi-keung. Villagers living on the greenbelt site were not consulted.

Henry Cheng Kar-Shun, chief of New World, is a supporter of Leung Chun-ying. The government did not take back a nearby greenbelt site owned by developer New World for the public housing project. New World instead applied for a change of land zoning to build private housing after the public housing proposal was approved by the district council. The private housing project may share driveways and a roundabout with the public housing project, according to plans.

Who is blaming whom?
Chief Executive Leung Chun-ying said that the Steering Committee on Land Supply chaired by Financial Secretary John Tsang Chun-wah was in charge of the project’s details. Leung also said the Transport and Housing Bureau is under the Chief Secretary Carrie Lam Cheng Yuet-ngor. Both Tsang and Lam have denied involvement. Both have been rumoured to be vying for the position of Chief Executive.

Incoming lawmaker Eddie Chu Hoi-dick has claimed that there was collusion between the government, businesses, rural groups and triads.

Why does it matter?
Housing is one of the most important issues Chief Executive Leung Chun-ying has been working on since he took office. The incident sparked accusations that the government had bowed to rural pressure, and that it was colluding with businesses and triads. Leung has been accused of having ties with triads before he even took office – in February 2012, his election aides attended a dinner at a restaurant in Lau Fau Shan with rural strongmen and alleged former triad boss “Shanghai Boy” Kwok Wing-hung.

The incident could harm Leung’s chance of running for re-election.

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Consulting firm Arup used confidential gov't data in developer's Wang Chau bid - report