November 01, 1999 22:04
INSTANT VIEW-HK to spend US$2.9 bln on Disney park
HONG KONG, Nov 2 (Reuters) - Hong Kong on Tuesday announced its long-awaited deal with Walt Disney Co , which calls for a hefty HK$22.45 billion (US$2.9 billion) investment from the government. Following are some analysts' comments on the cost of the deal:
SHAMUS MOK, CHIEF ECONOMIST, BANK OF EAST ASIA "I think this project is not a cheap project, but the things we need to consider is that we are buying a brand name product to help Hong Kong to strengthen our tourist status in the Asia Pacific region.
"I think you have to look at the spillover effect from this project. From that point of view it is a social investment. It will strengthen us as a tourist centre and it will stimulate more development on Lantau island for tourist-related projects. It also will boost land prices in Lantau island, which will increase government land revenues.
"It will create more jobs and will in the long term lower the territory's welfare costs."
HOWARD GORGES, SOUTH CHINA SECURITIES DIRECTOR:
"My reading of it is that Disney is potentially getting a very good deal. They're only putting in a fraction of the cost and they can claim a lot of that back in licence fees and royalties. But the Hong Kong taxpayer is really responsible for this project.
"It will create jobs, demand for materials and so forth in the construction phase, and it will also create service industry jobs long term. Taking the longer-term view it's probably a good project, especially if it's managed properly.
"But if you just look at it from a financial angle, then it appears to be not very attractive from the government or the taxpayer's point of view in the short term. It's potentially very attractive for Disney
because there's hardly any downside for them." |
