Development of InnoCell
Proposed scope and accommodation need of Hong Kong Science Park tenants
Mr CHAN Chun-ying was in principle supportive of the concept to develop an InnoCell but sought clarification on a number of issues relating to the proposed financial arrangements of the project. According to the estimated development cost of the InnoCell, Mr CHAN noted that the construction cost per square foot for building the InnoCell was about $4,500, which he believed was comparatively high. As Hong Kong Science and Technology Parks Corporation (“HKSTPC”) might only be required to pay a very low land premium or even be granted land premium exemption for the site to build the InnoCell, Mr CHAN enquired about the reasons for such high construction cost and whether the projected rental income of about $60 million per year would be able to cover the management and operating costs, and the net interest payment of $7 million per year up to 2033-2034 (excluding the net interest payment of $11 million for 2019-2020) as shown in Annex B to the Administration’s paper. Noting that the InnoCell was expected to provide only 500 cubicles in 2020 while the projected number of employees working in HKSP would be around 17 200, Mr CHAN further enquired about the proportion of overseas and Mainland employees who would benefit from the InnoCell accommodation.
Commissioner for Innovation and Technology (“CIT”) said that due to the size of the site and the height restriction, 500 would be the maximum number of cubicles to be provided at the InnoCell. Although this might not be adequate to meet all the demand for accommodation of HKSP tenants, it would allow HKSTPC some flexibility in addressing the short-to-medium accommodation needs of technology talents. The current thinking was that the rental period could last from 1 month to 4 years, to tie in with the duration of the incubation programme. In response to the Chairman’s enquiry, CIT advised that studies had been conducted to ascertain the accommodation demand in the InnoCell. Chief Executive Officer, Hong Kong Science and Technology Parks Corporation (“CEO, HKSTPC”) added that demand studies undertaken by HKSTPC indicated that around 570 to 600 cubicles at the InnoCell would be required by HKSP tenants/incubatees.
S for IT said that the living and co-working environment to be offered by the InnoCell would cater for the need of researchers and start-ups who were characterized by flexible yet long working hours, and foster cross-fertilization of ideas and collaboration among members of the community. For this reason, the construction cost of the InnoCell included the cost of building common rooms to provide spaces for communication and collaboration, as well as common facilities (such as leisure rooms for reading/computer and video games, gymnasium, laundry mart, etc.). CEO, HKSTPC added that HKSTPC had consulted relevant Government departments on the proposed building design and projected construction cost and their comments had been taken into consideration in the final estimate. In this connection, the Chairman requested the Administration to provide information on the management and operating costs of the InnoCell and whether such costs could be covered by the rental income of the InnoCell, and its assessment of the accommodation demand in the InnoCell.
Trade relations between the Mainland and Hong Kong
Mr CHAN Chun-ying welcomed the signing of the Investment Agreement and Ecotech Agreement between HKSAR Government and the Ministry of Commerce, and commented that these two Agreements strengthened the economic and trade cooperation, and facilitated the trade and investment between the two places. As the Investment Agreement would be the first investment agreement of the Mainland with pre-establishment national treatment commitments in the form of negative list for investments in non-services sectors, Mr CHAN enquired whether the Administration had to do anything to trigger the Most-Favoured Treatment (“MFT”) provision of the Investment Agreement as and when the Mainland accorded more preferential treatment to another economy or such treatment would be granted automatically to Hong Kong investors. Noting that the scope of cooperation would span multifarious areas including accounting, innovation and technology, e-commerce and intellectual property, Mr CHAN suggested that the Administration should conduct dedicated briefing sessions tailored to the needs of individual trades and industries to facilitate their in-depth understanding of the benefits of the two Agreements.
DGTI responded that according to Article 6 of the Investment Agreement, MFT would be automatically extended to Hong Kong investments and investors if any preferential treatment the Mainland accorded to investments and investors from other countries or regions was more preferential than that provided under CEPA. The Trade and Industry Department (“TID”) would maintain close liaison with the Ministry of Commerce and provide timely updates and reminders to the relevant industries on both sides. DGTI added that a media briefing and a meeting with chambers and stakeholders were held immediately after the signing of the two Agreements to introduce the details of the two Agreements to the media and the trade. Information papers would also be issued to various trade-related advisory bodies and trade associations. DGTI further said that trade/sector-specific briefing sessions would be held to deepen their understanding of the new liberalization measures.
In response to the Chairman’s enquiry, DGTI advised that TID maintained a dedicated website and a hotline service to provide the public and industries with the latest information on CEPA and the two Agreements.
The Belt and Road Initiative
Noting that under the Ecotech Agreement, an operational liaison mechanism would be established by the two sides to strengthen information exchanges and communication on the Belt and Road Initiative between the two places, encourage the establishment of multi-level communication channels by government departments, industry organizations and investment promotion agencies of the two sides for information sharing, and provide an exchange platform to support semi-official organizations, non-official organizations and the trade in the two places to play a part in facilitating the implementation of the Belt and Road Initiative, Mr CHAN Chun-ying enquired which policy Bureau would be responsible for such liaison and exchanges.
DGTI advised that the Belt and Road Initiative was a new cooperation area under the Ecotech Agreement which would strengthen CEPA commitments across a wide range of areas. While the Commerce and Economic Development Bureau and TID would stand ready to communicate on the Belt and Road Initiative, other dedicated parties including the Trade Development Council and the Infrastructure Financing Facilitation Office of the Hong Kong Monetary Authority would also be involved in providing the necessary information to specific sectors.