Government will only accept proposals that contain realistic and workable suggestions. The mode of governance and operation of the facilities must involve the participation of respected members of the arts and cultural community. The operation period by the successful proponent for the Core Arts and Cultural facilities lasts for 30 years. Government has very stringent demands in this area. For example, operations must not be based solely on commercial considerations. Government will hold frequent discussions with the developer on details of the project. Members of the arts and cultural community must be involved to set real and concrete plans before the actual implementation of any suggestion.

This is not a tender but an Invitation for Proposals. The objective of comprehensive planning and integrated development will be met through an interactive process. Government welcomes local and international developer to participate in this project. The views of the arts and cultural community were taken into consideration when the Invitation for Proposals was drawn up, and we believe that the developer, to increase the chance of their proposals being accepted, will take the initiative to approach the arts and cultural community. The consultations organized by the Hong Kong Arts Development Council is a good start of the interactive process.

In respect of the outdoor facilities, the Invitation for Proposals requires the developer to plan for at least four open piazzas, which we believe will be suitable for xiqu and other performances. It is hoped that the entire project can achieve syntheses and partnerships: between Government and the public; between the developer and the arts and cultural community; between software and hardware; and between high art and popular culture.

Government has no preference for which type of resident companies. This should be considered having regard to the mission statement of the proposals and the proposed hardware and software. Also, an arts group's artistic merit and its commercial appeal are not mutually exclusive.

The development of the West Kowloon District does not have any implication on Government's subsiding policy to arts performances. These are two separate and unrelated issues.

The canopy, which is set to be a future landmark, is beautiful and able to meet the different needs of the district. Cladding panels of different materials will be used in the construction of the canopy to direct airflow, which enhance natural ventilation, while at the same time resist typhoon damage. As for the issue of construction costs, the canopy is only one aspect of the entire development project. There will be other infrastructure works within the district such as roads and automated people mover system. It is therefore impossible to give an itemized breakdown of the cost.

Government welcomes any mode of governance and operation. Developers should liaise with the arts and cultural community before making recommendations. They should also provide the criteria and reasons for their selection of resident companies. Government will thoroughly consider the proposed mode of operation and management of each facility.

Government does not have any set idea of not subsidising the resident companies.

The Invitation for Proposals clearly states that developer must provide a list of those people who have been involved in the drafting of the development proposals and those who will be included in the management of the development project. The reasons for recruiting them and other relevant information must also be included. It is hoped that this will encourage the cultural sector and the developers to work together to prepare a workable and realistic development proposal. We also require the developers to make developing the arts and culture in Hong Kong their foremost objective in this project.

Government does have certain demands on developer and provides certain guidelines, but at the same time, gives them a sufficient level of freedom. We hope that excellent synergy between the cultural sector and the developer will push the entire project forward. On the basis of the Invitation for Proposals, Government welcomes intermediary organizations such as the Hong Kong Arts Development Council and other organizations to serve as a bridge between the various parties to facilitate exchanges of information. Government will meet the demands of the cultural sector as far as possible during the assessment process. This project has progressed from a five hectares project in the beginning to a 40 hectares one, with much more arts and cultural facilities.

The assessment process covers three main areas: technical, finance and operation. Due to the sensitivity of financial information, the assessment will be carried out by civil servants. In the area of operation and management, the Leisure and Cultural Services Department and the Home Affairs Bureau will work closely together as both of them are very experienced in the area of arts administration and in tune with the aspirations and hopes of the cultural sector. In general, the criteria for assessment include the mission statement, themes and programme content, business strategy and operation plan, mode of governance, human resources strategy and staff structure, the provision, operation and maintenance of other arts and cultural facilities.

Details on development brief, facilities and technical requirements, mode of operation and management are available in the Invitation for Proposals. It can also be downloaded free of charge from the project website. With regard to the ratio of 30% cultural facilities to 70% commercial facilities, both the construction cost and the cost of other infrastructure works such as the canopy, the automated people mover system and improvements to the coastline must all be taken into consideration. Therefore a balance must be struck in terms of land use. The final ratio will depend on the details and the master plan of the submitted development proposals, which will be assessed by Government. The assessment covers three areas: (1) Technical Proposal including architectural design and planning; (2) Financial Proposal, including land premium, incomes, funding of arts and cultural projects, operation of museums; and (3) Operation, Maintenance and Management Proposal including mode of governance proposed for the core arts and cultural facilities and the proposed governing body. The proposed governing body is expected to be a body with legal and professional credibility.

Government encourages the Proponents to suggest different modes of governance and management for different cultural facilities. The assessment panel will assess the proposals from all aspects. Regarding the issue of the number of cultural facilities, please note that the West Kowloon project has progressed from one that originally only covered five hectares of land to the 40-hectare multi-purpose facility that is being planned today. Government is demanding far more core cultural and arts facilities now than it did previously. The 30% figure was taken by reference to Norman Foster's scheme. This is not a tender but an Invitation for Proposals. It is hoped that the process can achieve four levels of integration, communication and partnership: between Government and the public, between the developer and the arts and cultural community, between software and hardware, and between high art and popular culture.

Government understands that culture and the arts need public funding. In fact, Government funding for cultural activities has not been reduced. However, the percentage of public funding in the companies' income has been declining because of an encouraging rise in the share of funding from the private sector. The development concept of the West Kowloon Cultural District is to maximize the resources from the private and the business sectors. Government, for its part, assigns the land to the developer. In the Invitation for Proposals, we require Proponents to provide a very detailed plan of how they would utilize their resources (especially in terms of financial arrangements) to support and run arts and cultural facilities. The document requires developer, when submitting their proposals, to guarantee the participation of experts from the arts and cultural sector in every stage of the planning process and the eventual operation and management of the facilities. This will be one of the criteria in the assessment process.

The completion of the facilities in West Kowloon does not mean that existing cultural facilities will be replaced. At present, two major kinds of Government sponsorship are available: venue and performance sponsorship. The arts groups that make use of the cultural facilities in West Kowloon in the future may either be Government or privately funded. This is an area of great flexibility and possibility. The completion of West Kowloon does not necessarily lead to a change in Government's funding policy.

Once Government receives the proposals, it will undertake a preliminary assessment process. As this project is very complicated, it is very unlikely that we will get a perfect proposal. After selecting a proposal that best meets all the requirements, Government will present to the Legislature. At the same time, Government will also brief the Town Planning Board on the master plan of the selected proposal. After views were taken, necessary improvements to the proposal will be made before the document is submitted for final decision to the Chief Executive in Council.

Government welcomes suggestions for any forms of cooperation but the most important thing is for the developer to provide a detailed analysis of the feasibility, rationale, financial arrangements and practical implementation of the proposal. The future mode of governance of the Leisure and Cultural Services Department's existing performance venues and museums are yet to be studied. The department has just this month completed public consultations on a consultant's report on the future mode of governance of its museums. The Home Affairs Bureau will consider the final recommendation report. As for performance venues, this issue is mentioned in the Culture and Heritage Commission's policy recommendation report but a decision has yet to be made. The developer and experts concerned will study the positioning of the new cultural district. As for the accountability and regulatory system, we suggest developer study successful examples in other countries before submitting their recommendations to Government.

Whether it involves setting up an organisation to monitor all the facilities, or having separate management for individual facilities, the developer can make recommendations. The Invitation document states very clearly that the mode of governance proposed should be "conducive to enhancing the long term cultural development of Hong Kong and attracting public support". Different cultural facilities can have different modes of governance. Government has set specific requirements on the project's management accountability, its accountability to the public, and the level of professional creditability. All policy changes require a long time to take effect. Government's stand on this major project is that the private sector must be involved in the areas of software and hardware but this does not preclude the possibility of cooperation between the private sector and Government. At present, Government provides performance venues for subsidised arts groups and at the same time, rents out those premises on a purely commercial basis. We believe that there will be a similar situation in West Kowloon when it is completed.

The minimum requirement set by Government is that 30% of the land must be used for arts and cultural development. Of course, Government encourages the developer to provide more facilities. The design of the canopy also requires that the structure should cover 55% of the land area. This requirement has in effect restricted the height of the buildings that can be built by the developer. If all the developer does, is to build and hand the operation over to Government, then it would be contrary to the principle of "community participation", that we all agree with.

Each of the three requirements (technical, finance and operation) listed in the Invitation for Proposals will be graded with 100 points as the full mark (see Annex 3.1 of the document). If a developer should propose that the operation of the cultural district be handed over to Government, that developer's score would understandably not be impressive. This whole project aims at letting the developer take charge of the development, including maintenance and management.

The members of the Ink Society and some collectors have concerns about donating their collections to the proposed museums in West Kowloon, as the mode of governance is unfamiliar to them. For instance, if the museums were to run into financial difficulties, would Government intervene? Will Government consider a trust arrangement for the donated collections to ensure that these works will not be lost for no reason?

Please brief us on the facilities, contents and operational goals of the Museum of Modern Art and the Museum of Ink.

The concept of the West Kowloon Cultural District development proposed by the Culture and Heritage Commission has been incorporated into the design competition document. In its report, the Commission says that the cultural facilities must (i) be integrated with the non-cultural facilities in the area to create the best synergistic effect and a lively and open cultural setting; (ii) match Hong Kong's other major cultural facilities to ensure effective employment of resources; and (iii) meet the long-term needs of Hong Kong's cultural development. In addition, it recommends a people-oriented, partnership-based and community driven approach. To achieve these objectives, the relevant "software" requirements should be considered and efforts should be made during the development process to foster a partnership between the developer and the cultural community to allow the cultural community's participation in the planning and future operation of the facilities in the area.

Government welcomes any proposal for developing the other arts and cultural facilities to add vitality and synergistic benefits to the area. Provided it is fully justified, any development of facilities, studios or offices for arts education can be proposed for Government's consideration. Government has proposed the themes of the museum complex listed in the Invitation for Proposals, but alternative themes are also welcomed. Regarding construction design, each building in the cultural area should have a distinctive style without being limited by the canopy design. The architects should be allowed to give full play to their design talent.

The whole project will need a capital investment of more than $24 billion. The requirement for development experience involving projects worth a total of $3 billion is merely to provide a pointer of capability. There are no less than four to five developers in Hong Kong with this level of experience. Small developers can form consortia to participate. They do have a chance. On the issue of phased development, all the cultural and other facilities will be completed in phases.

Government has conducted consultations. After considering the existing public museums in Hong Kong, museums with specific themes are genuinely needed to help Hong Kong become an international metropolis. Government has also made reference to the Bilbao Guggenheim Museum designed by Frank Gehry, which reflects the strong impact of a successful museum on local culture.

As far as the software and hardware are concerned, Government wants the Proponents to refer to overseas experience and to study the Hong Kong situation carefully before they submit their proposals. Regarding sponsorship, two major kinds of Government sponsorship are currently available: venue sponsorship and performance sponsorship. In the future, "hardware" sponsorship may not be necessary any more, but "software" sponsorship remains open. The arts and cultural groups making use of the eventual facilities in West Kowloon may be Government or privately-subsidised. We have much room for maneuver here. The West Kowloon development will feature complementary components while different venues may have different modes of operation, depending on the arrangement worked out between the developer and the cultural sector.

Due to limited resources, cultural circles may have to consider whether the sector needs a theatre or a concert hall, or both. We should bear in mind that a multi-functional venue is infeasible. Before offering your advice to the developer, please think carefully what the cultural sector really needs.

Under Hong Kong's current financial management policy, land sale, tax and other streams of income are subsumed under general revenue before allocating to meet various social needs. In other words, the income from land sales cannot be directly invested in cultural facilities. The participation of the business sector is therefore necessary. Government will not try to excuse itself from its responsibilities. West Kowloon is an integrated development project. How are we going to carve it into different parts? This is not a "forced marriage" between the developer and the cultural sector. This is a combination of financial prowess on one hand and cultural needs on the other. With good collaboration, the eventual facilities will enjoy smooth operation or even profit-making possibilities. Hong Kong is one entity and we are all part of Hong Kong. As a matter of fact, many developers are supporters of the cultural sector.

The developer may be worried about how the cultural facilities should be operated. But the Proponents do not have to actually operate all the facilities themselves. They only need to propose to Government how to operate them.

The guidelines for the entire development project are vague, suffering from a lack of research, consultation, policy directive and vision. A lot of issues need to be addressed when handling a project of such scale. For instance, what is a first-class arts centre? What are the conditions required for attracting first-class overseas artists? How are we going to coordinate the facilities in West Kowloon with those in other parts of the territory so that resources will not be wasted? How to create our uniqueness? How to promote local arts development? Who are our target audiences? How can we respond to their needs? What kind of management structure will best meet the specified goals? How to monitor the operation of the whole project? In short, Government must develop its arts and cultural policy for this project. It should not pass this responsibility to a developer without any relevant operational experience. Besides, some sort of mechanism must be in place to ensure that the participation of the cultural sector becomes genuine partnership.

As regards the operation of museums, figures show that arts museums in Hong Kong suffer an annual deficit of $60 million and theatres $10 million (excluding programme expenditure). On this basis, it is estimated that the future operation of West Kowloon Cultural District will likely incur an annual deficit of more than $300 million. How can we break even? Given the current Government sponsorship ratio of 1:99 and the Hong Kong Museum of Art's admission fee of $10, we must raise the fee to $990 to be able to break even. Is this possible? How are we going to capitalize on other facilities in the area to subsidize 99% of the cultural expenditure? If we were to cater to popular taste in order to popularize the facilities, will avant-garde, alternative or more sophisticated cultural programmes be able to survive? If not, will it still qualify as a first-class arts and cultural centre? Will the developer be prepared to support projects unlikely to generate pecuniary returns? What will be the mode of operation?

The museums in the Invitation for Proposals are suggestions only. Government welcomes any other suggestions presented by the Proponents. The four themes put forward by Government carry with them certain backgrounds. After intense lobbying by the arts sector, the need for a Museum of Modern Art in the Kowloon Park was confirmed during the time of the Urban Council. The Museum of Ink is being proposed because Chinese ink art best captures the uniqueness of Chinese culture, with an influence on the arts development in other areas such as Japan and Korea. The Design Museum was suggested because of the growth in recent years of the number of world famous Hong Kong designers. It is a good way to promote the art of design to the young people. The Film Museum is proposed to honour the remarkable development of the Hong Kong film industry, and would include many interactive and lively exhibitions. The existing Hong Kong Film Archive is mainly for archive and research purposes. The two play different roles.

Government is not conducting a tendering exercise. It is inviting development proposals and is hoping to receive more complete and precise proposals, instead of continuing with the model previously adopted by Government in developing cultural facilities.

The monitoring of the West Kowloon project will be conducted in an open manner, based on the principles of cost-effectiveness and public accountability. The cooperation between the arts and cultural community and the developer should be interactive. Both sides should be free to decide on their way of cooperation. Government welcomes proposals on the mode of cooperation. This kind of consultation should be helpful in the interactive process.

Government welcomes any suggestions regarding facilities other than the core ones. Regarding large venues, Government's requirement is for a venue capable of accommodating at least 10,000 people. If technical and financial conditions permit, the developer can propose to build a larger venue to cater to market needs.

To build a venue for 40,000 people requires a huge investment. The site for West Kowloon Cultural District is not suitable and also not big enough for the development of such huge venue.

We suggest that Government adopt an attitude of "smart intervention" for the development of West Kowloon. A watchdog body should be set up to facilitate communication between the arts and cultural sector and the developer. For instance, a special group should be set up under the Legislative Council to monitor the whole tendering process.

Of the entire project, one-third should consist of cultural facilities and two-third, commercial facilities. How could Government ensure that the developer will follow up on the cultural sector's wishes? Are there any clear guidelines for the developer?

Proponents are required to provide detailed proposals on the modes of governance and operation for the core arts and cultural facilities. Government encourages Proponents to establish partnership with local and international cultural organisations, experts and professionals in the planning and operation of these facilities. Naming such partnerships in the proposals will enable Government to better assess the capability of the future operators.

A concert hall with facilities that do not comply with the technical requirements of the theatres specified in the Invitation for Proposals cannot be regarded as one of the three theatres listed as mandatory requirements.

In principle, profits from the commercial facilities will be the main source of funds for the construction and operation, maintenance and management of the various arts and cultural facilities. The Operation Period is 30 years. Whether or not the developers can profit from this project depends mainly on their proposals (for example, the extent of Government support required or land premium payable to Government) and the development of the local property market after 10 years.

Government requires the Proponents to provide details of their business strategies, including their hiring and charging policies. If members of the public consider price affordability an important aspect in the business strategies, Government welcomes input from the public to serve as an important point of reference during the assessment process.

Also, how will Government judge whether the general public supports the outcome of the assessment? How can it ensure that the selected operation, maintenance and management strategy is the most favorable one? Are there any objective criteria? Is it up to the decision of Government? Or, alternatively, will be decided after a vote by members of the public and the arts and culture community?

Government welcomes views from the public regarding the appropriate mode of operation for the arts and cultural facilities to serve as points of reference for Government in assessing the proposals.

Government will set up a "Proposals Evaluation Committee", coordinated by the Housing, Planning and Lands Bureau. Under this Committee are the three assessment teams. The three teams will recommend the shortlisted proposal(s) to the Committee which will decide on further negotiations with the shortlisted proponent(s).

Marks will also be awarded for proposing any Other Arts and Cultural Facilities in the assessment of the Technical Proposal in respect of the conceptual design for arts and cultural facilities and open space, which carries 35 marks. It is subdivided into three categories, one of which is "Other Arts and Cultural Facilities".

The Civil Service Bureau has put in place stringent procedures to deal with retired civil servants seeking employment after retirement. Retired servants who wish to take up any position will have to file an application with Government, stating the identity of their employers, the nature of employment and the salary offered. Government will then seek the views of the departments that the retired civil servants had previously served in. The relevant departments will assess if there are any conflicts of interest before giving their permission.

In the WKCD case, similar to standard practice of all Government tender, "points" would not be made public.

The Government should be aware of the problems confronting Singapore's Esplanade, such as water leakage through the canopy glass, cleaning difficulties, excessive air-conditioning costs, strong draughts at the piazzas during typhoons, and the heavy construction cost of the canopy. There is a possibility that Hong Kong may be burdened by the same problems. Foster's design will make the facility inflexible. The mode of management remains fuzzy.

We should indeed pay attention to the cleaning and ventilation problems of the canopy. In addition, independent financial assessment should only be conducted after the Government has short-listed the proponents and an appropriate body, not necessarily an academic institution, should be appointed for the task. Furthermore, during the assessment of the proponents' financial proposals, the Government should consider giving extra credits to those capable of securing additional, such as private, funding to sponsor parts of the arts and cultural facilities. The extra funding will certainly reduce the requirement for public funds and also eliminate the need to rely on commercial activities to help finance the operation of the facilities.

The canopy was one of the key design concepts of the first-prize winner of an international competition held in 2001. The Government is currently inviting proposals for more detailed approaches for development of West Kowloon Cultural District, including technical details for the canopy. After assessment of all the proposals, if it is proven that the canopy is infeasible to build or it is not value for money, government will definitely review the approach. But it is too early at this stage to criticize the canopy approach.

The Government is waiting for proponents to put forward innovative ideas on the financial arrangement for arts and cultural facilities and commercial activities.

In terms of financial assessment, the public should be furnished with credible figures for reference. Such figures should help them compare and understand the financial arrangements put forward by various proponents. Proponents differ in their ways of computing land values, which will in turn influence their business strategies, especially in providing "Other Arts and Cultural Facilities" and the funds required for 30 years' operation. Independent financial assessment, covering land and construction costs, the costs involved in "Other Arts and Cultural Facilities" as well as operational and maintenance expenses, should help the public gauge whether proponents will receive reasonable returns in the entire development project.

The survey results will be analysed by professionals and we will listen to expert views regarding the basis of data analysis. The survey reflects public opinions, which can serve as reference for the Government and potential proponents.

The Government will deal with the proposals in the most stringent manner to ensure that the Successful Proponent meets the highest standards. On the issue of land costs, as the land is already there, any prolonged delay will be an opportunity cost. In respect of the question of single developer, the advantage is that public demands for arts and cultural facilities will be fulfilled, without turning it into a pure property project.

The important thing about the financial arrangement is not only the land value, but also the financial cost which includes the construction cost, its interests and the cashflows. The best way, if possible, is for the proponent to complete the commercial and the residential parts first so that its financial return can be used to support the construction and operation of arts and cultural facilities. At the same time, the proponent should make use of low-interest borrowings to reduce development costs.

The Government is inviting proponents to present proposals on developing and operating arts and cultural facilities in the district, partnership and the proposed mode of cooperation with arts groups is certainly a key factor for proponents' consideration.

According to views collected by the Arts Development Council, each facility should accommodate more than one art group, an opinion that seems to run counter to the demand for engaging a single art group based on long-term contracts. However, from the diversification point of view, any potential conflict between the idea of long-term contract and the principle of diversification should be avoided.

The Arts Development Council's proposal is that in addition to an independent visual arts academy, there should be facilities appropriate for visual arts training purposes in the four museums. The idea is to enable students to learn in an integrated manner.

The four themes proposed for the museums are only preferred themes. The proponents may propose new themes in response to public demands. In fact, there is much room for proponents to bring up new ideas concerning additional facilities, be they academic or commercial, to the four museums.

This Study Report shows how the government and business sector differs in the operating principle for the arts and cultural facilities. With regard to the commercial portion, have considerations been given to the difference in overall design or planning, such as different combinations of hotels and residential accommodations?

There are many possibilities in the design or planning of the commercial area. The market values of hotels vary greatly and the figures are not very reliable. They have been therefore excluded from this Study. This Study Report simply provides a foundation, and does not exclude the possibility of building hotels. The presence of hotels will improve the image of the shopping centres and attract more visitors, thus providing some guarantee of shopper and tourist traffic in the Cultural District. However, developers must demonstrate more creativity and provide more information before further assessment can be done.

What is the plot ratio used in the Study Report? If the ratio is increased to 3 or 3.5, how will it affect the results of the Study?

The plot ratio is based on 1.81 as stipulated in the government's Invitation for Proposals (IFP). As the ratio of developable floor area to site area, plot ratio is a measure of the density of the overall development. The higher the ratio, the greater number of buildings can be built. However, the cost of construction will also increase as a result. The Study Report assumes a price of $7,000/sq ft for the development, based on total construction costs, inclusive of the canopy, of about $3,000/sq ft and an accommodation value of around $4,000/sq ft. If the plot ratio were to double, meaning if twice the floor area of buildings were to be constructed, maintaining an accommodation value of $4,000/sq. ft., the land value would be doubled. The Trust Fund and operational income would also increase accordingly.

What assumptions are used in estimating the budget for the canopy construction?

There are as yet no concrete plans for the canopy design. Figures used in the Study are based on the design requirements for the canopy stated in the Foster Proposal, such as the span, the steel tonnage, environmental and wind-resistance requirements, and so on. Based on these, the quantities of steel, glass and metal needed are calculated. Furthermore, based on the requirement stated in the Invitation for Proposals (IFP) that the canopy must cover 55% of the Cultural District, the total surface area of the canopy is calculated and its cost works out to be about $10,000/square meter. The actual figure depends on the details of the selected design.

The commercial portion of the Cultural District is valued at $36.4 billion, with residential space accounting for 40% of total floor area. Is this percentage too high? Does the estimate include hotels?

As we mentioned before, the Study does not include hotels in such preliminary stage. Also, the 40% earmarked for residential development is just an assumption. Referring to Foster's scheme, the 40% planned for residential use can be distributed both in the east of the Cultural District (the Cultural Headland) and in the west (the Commercial Gateway). Besides, the residential buildings may not necessarily be built for sale. Some of them can be designated as serviced apartments which incur higher costs of construction, yet at the same time are valued higher.

According to the Study Report, Theatres A, B and C, operating under commercial principles, will make a profit of approximately $88 million. Assuming that there are three Resident Companies, the annual income for each company will be $29.33 million, which works out to a net box office income of $560,000 per week. Assuming that the 400-seat theatres put on five performances a week, there will be 2,000 people purchasing the tickets to these performances, where the average price of tickets is $280. If there is a three-tier pricing scheme, then the ticket prices will be $400, $280 and $160. These figures represent net returns to the Resident Company according to the Report. Please note this arrangement does not include concessions for students and senior citizens. However, in reality, a 400-seat theatre can only put up a medium-sized production, not a Broadway musical. It is also impossible for ticket prices to be set at the high levels implied in the Report.

The average attendance of Broadway shows is around 67% and the average price of the tickets is HK$480. The Study Report uses Broadway's figure as the basis for the operation of the three theatres. Cultural programmes in Hong Kong cannot be performed in the same venue for long periods of time, thus making it difficult to lower costs. At the same time, art companies also lack the marketing resources as of Broadway's. However, it is possible for Hong Kong to attain Broadway standards in the future because the West Kowloon Cultural District is a unique development in Southeast Asia. This Study Report also noted that compared to the 39 Broadway Theatres in New York, 400 seats are too few; and 2,000 too many. Bringing these two figures closer may bring economies in operations.

What assumptions are used for estimating the budget of the Museum of Ink and of Design?

Because Hong Kong does not have a Museum of Ink or of Design, we have to use the figures of the Hong Kong Art Museum in our assessments.

Concerning the Museum of Modern Art, you indicated government operating deficit of $205 million and which you called a Royalty $70 million. I am wondering if you could provide some comparable institutions where you found that operating because it is a one-third of the value of the operation under government running principles. What other examples elsewhere in the world can demonstrate such a profound difference in cost?

There are actual examples used as a reference for the Royalty assessment. Because the details are somewhat sensitive, we are not in a position to divulge what they are. Most of the numbers were obtained from a modern museum in Taiwan, which will be run as a franchise, and is still in construction. Figures from this museum in Taiwan, in turn, referred to a European museum, which owns the same franchise. The Study Report referred to the figures from both examples and made adjustments in light of the cost levels and operational conditions in Hong Kong.