Reporter: I have two questions. The first one is: how is it that Disney brings only less 10 per cent of the total cost of the project?
Walt Disney Attractions Chairman, Mr Judson Green: Walt Disney Company has agreed to invest in Hong Kong Disneyland because we believe in the project. We think this is a unique opportunity to increase tourism, enhance tourism in Hong Kong Disneyland, and because of our confidence in its success, we're investing cash equity. That is not something that we always do or typically do, but we did agree in this case because we believe in the success of the project.
Reporter: I'm sorry. It wasn't my question. My question is: that you bring less than 10 per cent of the total cost which seems to be very low. How is it that the Government has accepted such a deal?
Commissioner for Tourism, Mr Mike Rowse(卢维思): I think you're grouping together two different sets of numbers. In terms of land formation, reclamation and infrastructure, this is an expenditure that the Government would have had to spend anyway irrespective of what we did in Penny's Bay on Lantau Island. If we were going to use that land for anything else for recreation and tourism, we would have had to spend that money in order to make it useful land. Focusing purely on the theme park itself, the percentages are as we have given them to you, 57 per cent and 43 per cent. That represents the cash equity. The loan, which you have grouped in there as expenditure, is not expenditure. It is a loan. It will be repaid with interest in full, every last dollar. It is quite wrong to regard that as expenditure although we will need the approval of the Finance Committee of the Legislative Council in order to advance that loan to the joint venture company.
Finally, even of the $13.6 billion in infrastructure, we will be getting subordinated shares for that proportion which relates to the cost of reclaiming the land for the Phase 1 theme park. That means, if the performance of Hong Kong Disneyland is better than the present business plans expect, all of those four billion shares will convert into ordinary shares. On that basis, the Hong Kong SAR Government would own 73 per cent of the company and Disney's share would only be 27 per cent of the enlarged capital upon full conversion of all the shares. So I think you've got to look at the different numbers. It's very simplistic to say it's 90 per cent share for the government. That's quite wrong. A big chunk of that number is money that would have been spent anyway, and another big chunk of the money is a loan which would be repaid.
Reporter: Disneyland in Paris has had a lot of troubles in the first years. Can you remind us what were the reasons of these troubles first, and can you explain to us how you have addressed these issues in the current project.
Walt Disney Attractions Chairman: Well, I might say that some of the difficulties in the early years of Disneyland Paris were actually similar to what we experienced in the early years of Disneyland, Walt Disney World and Tokyo Disneyland. These are very major projects that are very complex. I am happy to say that Disneyland Paris, however, now has become the number one tourist attraction in France and is operating very, very well. We have brought to bear on this particular project, Hong Kong Disneyland, the benefit of our experience, not just of Disneyland Paris, but of all four destinations and 50 years of experience. And so we are learning from all of those experiences and trying to place those learnings into the planning for Hong Kong Disneyland.
To be specific, I think one of the things that we have focused on in particular has been the appropriate sizing of Hong Kong Disneyland. This is not -- one difference among all the other Disneyland-type parks around the world, is that instead of beginning with an assumption of a park that's going to do ... of 10 million in attendance, we, I think, have very appropriately and conservatively targetted the attendance in the five million range and have planned for, with the Government, the ability to add attractions in a capacity in the years ahead based on its performance such that it can grow to 10 million or more, or perhaps we could even at some point with the Government consider future development. I think that is a significant difference in that we have tried to size very carefully this part and this project, both the park and the hotels, so that we can be successful from the very beginning.
Commissioner for Tourism: I think both parties get money out of the project in different ways. So looking first at Disney - because that was the main thrust of your question - yes, they participate in the project in a number of respects.
As licensor of the intellectual property, they will get royalties, in exactly the same way as they do in Paris and Tokyo, of five per cent or 10 per cent of the revenues in exactly the same way as they do elsewhere. So the royalties are standard around the world.
Secondly, the management company, which will be a 100 per cent Disney subsidiary, will also earn a management fee. Again, the management charges for that are standard. I'm sure Judson will tell you that they are at the low end of the spectrum, following the negotiations. But there is a management fee as well.
Finally, Disney and the Government are shareholders in the project. In our capacities as shareholders, our share of the dividends is exactly the same as our shareholding. That is to say, when the company is able to pay cash dividends, we will get 57 per cent of them and Disney will get 43 per cent of them. So there is no question of the Government shares being worth less or some different kinds of number. Looking at it from the Government's point of view, of course, as a shareholder we are in exactly the same position as Disney. As a lender, we will get back interest on the loan at a very satisfactory rate and, of course, get back the whole of our original capital that we advanced to the company.
And finally, as the Government and as a community, we will enjoy the wider economic benefits that accrue to the economy as a whole off site. So both parties will benefit as shareholders, but both parties also benefit in other ways.
署理财政司司长许仕仁:先回答你最后的问题,在专营权上,双方来说都是没有的,即是non-exclusive的。关于你第一个问题,我想原则上,从长远来说,当然政府是不会排除把我们自己的股权私有化,这个基本的原则当然有,但在短期来说,现在我们当务之急是要把这个计划尽量开始发展,而在这个阶段的时候,政府直接的参与是非常重要,所以形成我们在这个阶段,并无一个特别的时间表说在何时一定要把一定的股权私有化,但在协议内亦说得很清楚,就是香港政府的股权可以在迪士尼乐园开始后的一年后,one year from now, yes, after opening, yes--开始之后的一年内,已经可以进行私有化,亦没有说限定政府达到某一个阶段,便要拿回一些股票,全部亦可以私有化,现时我们没有一个具体的时间表,协议上的确是有这样的条款,迪士尼方面,或许稍后Mr Green可以补充,但是他们亦可以把股权转让,但是不可以少于十九亿,十九亿以下便不行了,形成他们要拿回一些,不知道Mr Green有没有补充?
Walt Disney Attractions Chairman: I would confirm that although we can sell some shares at the same time as the Government after the first year of opening, we are committed to ... shareholder in Hong Kong Disneyland.
Reporter: From the International Herald Tribune. Is the 25 per cent rate of return anticipated contingent on the full 10 million people visiting ...sort of a good scenario Mr Green mentioned, or does the 25 per cent return happen if you don't do the full built-out? And also, could you confirm whether any private sector developers were any time here in negotiations with Disney, please?
Government Economist, Mr Tang Kwong-yiu(港府经济顾问邓广尧 ): Perhaps I answer the first part of the question. Twenty-five per cent return is the economic rate of return. It is, of course, linked to the attendance profile. The attendance profile for the base case is that at opening, the total attendance will be around five million people. And then, at the full capacity, that is, the Phase one built-out, the attendance will build up to around 10 million people. So, corresponding to that attendance profile, yes, the 25 per cent is related to that.
Commissioner for Tourism: What I can tell you from a government's perspective is that there've only ever been two people at the negotiating table, that is, the Hong Kong SAR Government and the Walt Disney Company of the USA. We have not been holding discussions about whom we might sell our shares off to. I am sure that Disney who would answer for themselves in a minute has been having discussions with potential strategic partners from the point of view of marketing the park and tying up very commercial arrangements and so on, but on a very preliminary basis. And I'm not sure how much they would say about that today. But in terms of the investment, there have only been two people at the table.
Walt Disney Attractions Chairman: And I confirm that in the many months that we've been here working on the negotiations, we have met many companies and many organisations because we want to understand everything we could about Hong Kong and the future of Hong Kong Disneyland. But we have no agreement with any company at the present time. The only negotiations we have are with the Government, and I think it was previously described at some point in the future, the Government and Disney together will have an appropriate discussion about the possibility of other investors joining in. But all of our focus has been and will be for the near future on making sure that we launch projects successfully and getting off to a good start.
Reporter: From Francis Moriarty of RTHK. I'm still a little unclear on exactly what the lifetime is of this whole project. What's the payback period for the loans? ... Why are all the timetable things so vague?
Secretary for the Treasury, Miss Denise Yue(库务局局长俞宗怡): The payback period of the loan is 25 years and it will fetch an interest rate, a reasonable interest rate, so it's not a soft loan in any sense. Insofar as the life of the project is concerned, the land would be granted to this joint venture company owned by Government and Walt Disney for 50 years for Phase one, with an option of renewal for another 50 years. When doing the economic benefit analysis, I believe our Government Economist has used a period of 40 years, 40 years after the opening of the Disney park to arrive at the set of figures which Mike just showed on the screen. I hope I have answered the question.
Government Economist: In the economic assessment, we used for illustration purposes 40 years as the time span. We do also carry out sensitivity test as to a shorter period, say 30 years or even 20 years. Obviously, the project of this nature will have a time span which is much longer than 20 years. But even so, for shorter periods of 20 years or 30 years, our assessment is that the economic benefit will still be quite substantial.
Commissioner for Tourism: And finally the answer to, maybe underlying Francis' question, is nothing sinister. There will be a lot of facts and figures on the table tomorrow. It's being duplicated in my office now and translated, and that's being printed as well. So when we go to LegCo tomorrow, there will be more facts on the table.
Reporter: I have a question for Judson Green from Disney. Why do you choose Hong Kong as the place for building another Disney park in Asia? Have you earlier talked with other countries, other cities, other places?
Walt Disney Attractions Chairman: We chose Hong Kong for a variety of reasons and I articulated some of them in my comments. We have obviously been shown interest from numerous countries around the world. We have always wanted to expand our international base beyond our first two destinations in Japan and France. And when you look at the criteria of Hong Kong, it is already very well-known and established for its tourism, although we believe jointly we can enhance its future tourism potential, yet, most importantly, it has invested appropriately and in an visionary fashion with respect to its airport and its infrastructure, and we are very drawn to the people of Hong Kong and the fact that we think a Disney theme park would be a very successful operation in Hong Kong. The fact of the matter is the world's travel and tourism will be growing quite significantly in the decades ahead. It clearly will be a major engine of growth for the world and those destinations that are well-placed, strategically located, and thinking about and taking the necessary actions will be the ones that will be successful. And we saw all of those criteria in Hong Kong and that's why we selected Hong Kong.
We have from time to time had discussions with other countries and we'll continue to do that, but our immediate focus is on launching Hong Kong Disneyland.
Walt Disney Attractions Chairman: I think when we look at all of the past destinations in the world, we felt Hong Kong was the right one for us to concentrate on next. I don't know when we will have another destination, nor where it will be. We obviously believe that China is the world's largest market. It has enormous potential and someday there could be a second theme park in China, clearly. So I don't have any timetable for you. I don't have any specifics, but we obviously believe that our Disney theme parks which are the most successful in the world, are loved by the people of the world. There is clearly affinity for the Disney franchise throughout the world and throughout the Asia-Pacific region. And I think we would continue to look at our opportunities in the future but once again the underscore - we are most excited about Hong Kong because of its unique opportunities and that's really our immediate focus.
Commissioner for Tourism: To add to the first part, which is in fact a question again about exclusivity. If you look at Orlando in Florida, the Disneyland is like the anchor tenant. And surrounding Orlando in Florida are a large number of other theme parks as well that have come there afterwards. So if we were to factor in the possibility of other Disney theme parks around the rest of the region, we should also factor in the benefits to Hong Kong's economy of the attraction of additional tourist attractions and investors that will come here because Disney is coming here. So there are pluses and minuses on both sides. I think one point has been stressed by both sides is that our focus for the next few years is quite definitely going to be on getting the Hong Kong Disneyland up and running and making it successful. And that's a very important message you need to take away. As regards whether we have had reference to Ocean Park and the penetration rate of that amount, yes, we have. And the assumptions that we are making in respect of Hong Kong Disneyland are actually quite conservative compared to the penetration rate of the Ocean Park has had in the past, both among local residents and among foreign visitors.
Commissioner for Tourism: The answer to your question on exclusivity is: it is entirely reciprocal and there are no restrictions on either side. Hong Kong is the home of free competition and we are not scared of competition. We think we have a better product than everyone else. And that's why Disney is coming here because they think so too. Okay ? There are no restrictions either way on exclusivity.
Chief Secretary for Administration, Mrs Anson Chan: Before I draw this presentation to a close, I want to comment on one aspect on which there appears to be no questions, but nevertheless it does appear to be a point of concern to the community at large and so I like to comment. And that is on the whole question of the need to import labour, can I make it quite clear that at this point in time, we do not see the need to import labour. As you know our entire policy on employment is to give preference to the employment of local workers. We have an established supplementary labour scheme where in the event that the local labour force is unable to meet the demand, then there is an established mechanism to consider importing labour. But I do stress at this point in time we do not see the need to import labour.