For the first time, a government minister gave a detailed breakdown of the HK$25 billion it has spent so far to get the
Disneyland Hong Kong theme park up and running, and then startled lawmakers by saying the government might ultimately sell its share.
Less than two months after Disneyland Hong Kong opened, Frederick Ma said Wednesday that the government could sell off its 57 percent share in the theme park.
"In the long run, the government may consider, in the light of the big market, [the] small-government principle to divest its shareholdings in the company [Hong Kong International Theme Park Limited, a joint venture between US-based Walt Disney Corporation and the Hong Kong government], at an appropriate time when it is in the overall economic interests of Hong Kong to do so," Ma said during a Legco meeting.
But Ma's statement gave no timetable or any indication that the sale would be any time soon.
"The park has opened for [less than] two months. We should wait until the park is running smoothly before we consider any move [to sell]. Up to now we don't have any plans about selling off the government's stake," he said.
At the meeting, Ma broke down the government's expenditure on construction, saying that reclamation and other infrastructure works cost HK$13.6 billion - including road projects, cleaning of contaminated soil and compensation for affected fishermen. Land acquisition and clearance accounted for HK$1.6 billion.
Another HK$3.3 billion was for equity injection and a HK$6.1 billion loan will go to Hong Kong International Theme Park Limited.
The government has also waived its claim of HK$931 million in dividends that would otherwise be payable to the administration by the MTR Corp as financial support for the construction of the Disneyland Resort Line.
Ma's comments were in response to Frontier legislator Emily Lau's written question asking the government to explain why it is a majority stakeholder in a private enterprise and asking for a costs breakdown.
Legislators were taken by surprise by Ma's comments. Democratic Party chairman Lee Wing-tat said it is too early for the government to consider selling its stake.
"The government needs to take at least two or three years to assess its financial returns so as to strike a good deal," he said.
Lee pointed out that since the government holds a controlling stake in the park, it has a responsibility to disclose its financial accounts, including operating costs, daily attendance, expenditure and income. "The public needs to know whether its investment is value for money," he said.
Democrat Fred Li, also a member of Legco's economic services panel, said if the government plans to sell its stake, it should consult the panel before proceeding.
"We need to assess all the financial information to ensure that the government sells its shares under the most favorable conditions," he said.
"Now should not be the right time because the park has only been running for two months. We don't even know its financial situation. The government should not consider the move until it reaps a handsome profit."
Chan Kam-lam, of the Democratic Alliance for the Betterment and Progress of Hong Kong, said he believes the government will not sell its stake soon.
"He [Ma] was questioned by a lawmaker - what do you expect him to say? He couldn't rule out this possibility, could he? That was why he said in the long run the government might consider selling off its stake," he said.
Chan argued that the park's financial returns will be only one of the factors in assessing its value. "We have to consider all the peripheral profits generated by the park and how it can help spur tourism and the overall economy."
The public, he said, has been too aggressive in attempting to force Disneyland to reveal its performance figures.
"It has only been two months since the park [opened]. Give Disneyland a break. We can't expect it to immediately show us all the figures."
However, Chan said there are still many shortcomings in the park's operation. "There has been inadequate promotion of the park in Hong Kong. It has focused too much on the mainland market. I think it should also allow local travel agencies to organize local tours at the park. After all, the local market is also very important," he said.
Financial analyst David Webb said he would be surprised if the government relinquishes any of its 3.25 billion shares in the near future.
"The government has always stressed that it supports big market, small government, but its actions do not support its words," Webb said.
Hong Kong Disneyland, Walt Disney's 11th theme park, is the only Disneyland to enlist a government as a shareholder.
A Disneyland spokeswoman said Wednesday that while the Hong Kong government plays a heavy role in the park's decision-making, it is too early to comment on future possibilities.
"Right now, we are focused on the success of opening year for Hong Kong Disneyland, and there is no plan from Disney to consider any equity position changes in its ownership," public affairs manager Esther Wong said.
So far, Disneyland has not said how successful the park has been since it opened and has refused to divulge attendance figures.
Since the September 12 opening, a string of incidents has troubled the park. In the first month alone, a reported 50 rides were brought to a halt by technical issues which triggered the safety system. On October 11, a former worker climbed to the top of a rollercoaster and held a knife to his neck to protest against his dismissal a week earlier.
Other workers have complained of unfair treatment and 10- to 13-hour workdays.
