Hong Kong’s Urban Renewal Authority to weigh bond issuance, borrowing after failed tender

Hong Kong’s cash-strapped Urban Renewal Authority may consider issuing bonds or borrowing more money as it reveals plans to take on a major redevelopment project in Kowloon City on its own after a failed tender in September.

The authority’s managing director Wai Chi-sing said it was exploring the “self-initiated approach” to the Kai Tak Road/Sa Po Road development scheme to realise “planning gains and community benefits”.

The URA announced last week that the tender fell through after it attracted only one bid, which included additional terms that deviated from the project’s objectives. Property tycoon Li Ka-shing’s CK Asset Holdings said it submitted the bid.

In a blog piece on Sunday, Wai conceded that taking up the project could put pressure on the authority’s finances and said it could consider arranging bond issuance or seeking syndicated loans again “at an appropriate time”.

“If the project is stalled because of the failed tenders, it will not only affect the rejuvenation of the old area of Kowloon City and the connectivity with the Kai Tak development, but also slow down the progress of the [neighbouring] Nga Tsin Wai Road redevelopment project,” Wai said.

“It is indeed necessary for the authority to carefully study the feasibility of developing the Sa Po Road project on its own in terms of the planning and community benefits the project will bring, as well as the development costs and risks involved.”