Expanding HK Disneyland makes sense
Updated: 2016-11-29 07:43
(HK Edition)
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As expected, the proposal to expand the Hong Kong Disneyland Resort with an injection of HK$10.9 billion from the SAR government and the Walt Disney Company has met with obstacles in the Legislative Council. The LegCo's economic development panel passed a non-binding motion on Monday morning urging the government to delay the expansion plan.
Government officials should certainly provide more information on the proposal to convince the legislators before the appropriation application goes to the Finance Committee. But during the panel discussion many legislators sounded like they did not favor the idea of investing more money into the theme park.
How much money has the government spent on the park so far? According to Secretary for Commerce and Economic Development Gregory So Kam-leung, the government has invested HK$28.5 billion in the form of stock and loans as well as expenses in land development and infrastructure since 1999.
Some legislators queried that after investing so much taxpayers' money in the venture, the public coffers have not benefited from it. They seemed to have forgotten the concept of "external benefits". When assessing the benefits of the park, we should not focus only on the direct profits. Benefits for other sectors, such as the hotel, catering, retail and transport industries, and the jobs thereby created are not visible but actually more beneficial to the local economy.
Some accused the government of being incapable of exercising control over the park in spite of its majority share. That allegation was made without any supporting evidence. So sits on the board of directors exercising his power as a representative of the major shareholder - the SAR government, which holds 53 percent of the company shares. He revealed there were cases of the government overruling Disney in certain development decisions. Since the high-level decision-making process is commercial secret, one wonders where those lawmakers got the idea of Disney domination. And the significance of keeping control over the development of this key tourist attraction is exactly the reason why the government should not abandon its major shareholder status as some suggested.
Finally, the lawmakers' opposition is against basic business sense. Unless we want to close down a business, we would have to inject more capital and introduce changes if it is found to be losing money. Yes, last year the park went into the red for the first time in recent years because of the dwindling number of mainland visitors. Should we sit back and do nothing? No! The introduction of new elements, like Marvel-themed attractions, would be critical and timely in reviving the park's appeal. And the expansion is necessary not only to save the day but also for the sake of long-term development.
(HK Edition 11/29/2016 page10)