Hong Kong signs cyberport deal

IBM, Microsoft and Yahoo are interested in Cyberport

By Damien Grammaticus in Hong Kong

Hong Kong has given the go-ahead for a high-technology development known as the Cyberport that will cost US$2bn to build.

The territory's government signed an agreement on Wednesday with the Pacific Century Cyberworks (PCCW) to build the site.

PCCW is one of Asia's largest telecoms and technology companies owned by the tycoon Richard Li.

The territory wants to become Asia's leading centre for information technology.

The Cyberport, situated on Hong Kong Island, will provide a tailormade infrastructure for over 100 companies specialising in computing and information technology, complete with research facilities and housing.

Hong Kong says it will offer subsidised rents to compete with other sites like Silicon Valley in California.

Firms including IBM, Microsoft and Yahoo have signalled their desire to locate at the Cyberport.

Controversy

The project has been the subject of much controversy, however.

Hong Kong's decision to have tycoon Richard Li's PCCW build the Cyberport led to much controversy when it was first announced last year.

Li Ka-shing has just been named Asia's most powerful person by Asiaweek magazine

The project was never put out to competitive tender.

Richard Li is the son of one of Hong Kong's richest tycoons, Li Ka-shing and is a high-profile businessman in his own right.

But the elder Mr Li is a close associate of Hong Kong's chief executive, Tung Chee-hwa, who was accused of doing favours for the Li family.

As well as the Cyberport project, Richard Li has been chosen as the preferred bidder to buy Hong Kong Telecom.

But Hong Kong's Government says there are sufficient safeguards in the Cyberport agreement, which mean most of the risk is borne by Richard Li.