Dispute halts $500 mn expansion of Hong Kong Disneyland

March 17th, 2009 - 2:14 pm ICT by IANS  

Hong Kong, March 17 (DPA) An anticipated $500 million expansion of Hong Kong’s struggling Disneyland theme park has been put on hold, a news report said Tuesday.
Disney has laid off 30 planners and halted all creative and design work on the expansion after learning the Hong Kong government had no timetable for the work, the South China Morning Post reported, citing unnamed sources.

The move followed an apparent breakdown in discussions over the way to expand the three-year-old park on Hong Kong’s Lantau Island, which has been criticised for being too short on attractions.

Disney has worked since last year on plans to add an extra 20 hectares of attractions to the site to help it boost disappointing attendance figures. The work was expected to be carried out by 2013.

But the design work has been put on hold because the Hong Kong government, which is a 57 percent stakeholder in the park, has yet to commit to a timetable for the work despite two years of talks, the Post said.

Walt Disney spokesman Leslie Goodman told the newspaper no agreement had been reached “after two years of Disney investment in creative and design work”.

He added: “The uncertainty of the outcome requires us to immediately suspend all creative and design work on the project.”

A Hong Kong government spokesman said he was “puzzled by the company’s decision” and said the laying off of staff was “not conducive” to discussions on the expansion.

Hong Kong Disneyland, which covers 120 hectares, opened in September 2005 and was funded largely by Hong Kong taxpayers in a joint venture between the government of the former British colony and the Walt Disney Co.

Visitor numbers have been disappointing and the expansion is expected to be funded by Disney, which also loaned the joint venture $420 million to repay commercial loans from 26 banks.

The park, which has refused to release official figures, is understood to have attracted around 4.5 million visitors from October 2007 to September 2008 against a pre-opening target of 6.22 million visitors.

It reportedly fell around 500,000 visitors short of its 5.7 million first-year target and then saw numbers plunge by more than 1 million in its second year of operations.

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