Winning consortiums bidding for core land parcels at an innovation hub near Hong Kong’s border must post a HK$100 million (US$12.7 million) construction bond and meet a tight 30-month development deadline, according to tender documents obtained by the South China Morning Post.
Industry leaders said the requirements, which deviated from those in conventional government land sales, suggested that the government was targeting “well-capitalised” bidders to eliminate the risk of stalled construction or abandoned projects.
The SCMP reviewed the 940-page tender documents on Wednesday, a day after Hong Kong-Shenzhen Innovation and Technology Park (HSITP) launched a public tender for four land parcels.
The four land parcels comprise two dedicated information technology sites and two for accommodation for workers, with a total gross floor area exceeding 76,000 square metres.
Successful bidders will be responsible for the design, construction, financing and management of the relevant sites, including the accommodation facilities.
According to the tender documents, bidders must deposit a bank-backed, on-demand “construction bond” of HK$100 million as the financial guarantee upon signing the agreement as security for fulfilling contractual obligations.
“On or before the date of this agreement, the tenant shall submit to the owner the original of an on-demand bond for the amount of Hong Kong dollars one hundred million duly executed as a deed by a licensed bank in Hong Kong ... for the due performance of the obligations of the tenant under this agreement,” the document said.
Bidders also face an exceptionally tight deadline, as the document also stipulates that construction must be finished within 30 months of signing the sublease, with a “long stop date”, citing the final deadline set for April 1, 2030.
As the government remains the landowner, the park will sublease the sites to the consortiums under fixed tenancies, although the exact duration is not specified.
Bidding will also follow a “two-envelope” system, under which the evaluation heavily favours quality over price, assigning a 70 per cent weighting to technical proposals and 30 per cent to financial offers.
Submissions close on August 31, with the successful bidders expected to be announced in October.
HSITP is located in the Hetao cooperation zone proposed by Beijing in 2017, comprising two parks on either side of the border between Hong Kong and mainland China.
The project is part of the Northern Metropolis megaproject, which aims to turn 30,000 hectares (74,132 acres) of land near the border with the mainland into new engines for economic growth. It is also the top priority of this administration in realising the goal to build an international innovation and technology hub.
The park said in a reply to the SCMP that the construction bond reflected current construction costs and aligned with general market practices to protect the project against development risks during the construction phase.
The 87-hectare (215-acre) Hong Kong park of the Hetao Shenzhen-Hong Kong Science and Technology Innovation Cooperation Zone opened last year as a “special jurisdiction” complementing the adjacent 302-hectare Shenzhen site.
Three building complexes have so far been completed in the I&T hub in the Lok Ma Chau Loop – two for laboratories and one for accommodation.
The park’s operator stated on Tuesday that it aims to anchor top-tier technology enterprises to create a landmark development in the Hetao zone.
Kathy Lee, head of research and retail consultancy at Colliers, said that the procurement model was not common in Hong Kong and believed that the high financial threshold was set to attract “well-capitalised” bidders, given the prime location of the land.
The consortiums were expected to shield the high-profile development from underperformance, as expected by the government, she added.
She noted that several companies had already expressed interest in the park, making it unlikely that the tender would fail even if participation was limited.
Veteran surveyor Vincent Cheung, managing director of Vincorn Consulting and Appraisal, said that the successful bidder would be required to independently secure long-term financing and take on full operational management alongside the initial superstructure construction.
Unlike conventional government land sales that prioritise upfront cash bids, he said this exercise followed an integrated design-build-finance-operate model.
“The overarching framework of the tender is similar to the public-private partnership models used by the Airport Authority and the West Kowloon Cultural District Authority,” he said.
However, he still hoped the park would provide detailed information, including the lease duration, to boost investor confidence. -- SOUTH CHINA MORNING POST
