Secretary for Development Bernadette Linn on Thursday said further public funds would not be "casually" injected into companies that were set up to develop the Northern Metropolis.

The Hung Shui Kiu Industry Park Company is among several firms formed to implement the mega project and is slated to receive HK$10 billion in public funding to enable it to start operations in the coming months.

Officials also plan to transfer HK$150 billion from the Exchange Fund to support the development of the Northern Metropolis and other infrastructure projects.

The idea, Linn said in an exclusive interview with RTHK, is for the Hung Shui Kiu logistics hub to ultimately be self-financing – with the initial HK$10 billion injection meant to enable the park company to develop eight of the 23 hectares that come under its purview.

For the rest, the 15 hectares, the plan is for the park company to seek private-sector partners to develop them or for it to use the land to generate more capital or issue bonds.

Capital injections are worthy investments, Linn said, given that the country's latest five-year plan has clearly expressed support for the faster development of the metropolis.

She rejected the notion that this was a case where the administration would be financing a far bigger share of the pie compared to the private sector.

When asked about cases in the past when other statutory bodies such as the Urban Renewal Authority and Ocean Park Corporation sought further public financial support, Linn said officials had expectations of firms within the metropolis.

Given possible changes to future economic conditions, she said, officials would further evaluate the necessity of more spending when the time comes.

"After the government's initial capital injection, we won't be casually giving out more money if the company's board asks for more down the line. We won't easily do this," Linn said.

"But we don't think that we're at the other extreme either, where we'd say, 'never ever ask for more money.'"

Linn noted the government shouldn't be shutting the door right now, saying additional injections of funds might be needed if developments in the area went well and more capital was needed for further growth.

She noted that five bureau secretaries would be sitting on the park company's board, which would have to meet performance targets, compile annual reports and be subject to scrutiny from the legislature.

She said it would not be suitable for the park company to be subject to value-for-money checks by the Audit Commission as it would need flexibility, given that it would be operating on a market-based model.

Government projections are for the Hung Shui Kiu hub to generate an annual economic contribution of nearly HK$4 billion in its first phase, with the amount increasing to HK$11 billion when the whole industry park is in full operation.



Edited by Tony Sabine