Hong Kong Telecom, one of the largest telecom operators in Hong Kong, has been using “temporary” waivers – which are normally granted for a period of one year – to convert parts of its Lai Chi Kok Engineering Centre into offices in the last three decades, FactWire can reveal.

According to its land lease, the 14-storey premises can only be used as a telephone exchange and its ancillary facilities, but the property owner PCCW-HKT Telephone can apply for a temporary permission – also known as a waiver – from the Lands Department to relax the restrictions.

These waivers are usually valid for a term of one year and have to be renewed quarterly thereafter, or occasionally, granted up to a maximum of three years with further extension subject to government approval.

HKT has been using temporary waivers to operate offices on several floors of Lai Chi Kok Engineering Centre for more than 32 years. Photo: Factwire.

However, FactWire found that HKT has been using several temporary waivers to operate offices in 66,000 sq ft of the building, or around 20 per cent of the total floor area, since 1985.

The current waiver application procedure also requires the leaseholder to obtain approval from the Town Planning Board for any proposed uses that are not permitted in the outline zoning plan for the area. FactWire has discovered that HKT does not have the necessary planning approvals for commercial offices on at least four floors of the engineering centre, which is located in a government, institution or community (GIC) zone.

The latest revelations come as part of a four-month investigation into the misuse of the dozens of telephone exchanges owned by PCCW Group, the parent of HKT, as well as the questionable enforcement efforts by the Lands Department.

FactWire revealed last week that at least six HKT customer service centres located in telephone exchanges, including the one in Lai Chi Kok Exchange, were in violation of land leases, while the company was also notified of government inspections days in advance.

Parts of the first to 14th floors of Lai Chi Kok Engineering Centre are currently used as offices. Photo: Factwire.

According to the two waivers that are currently effective, PCCW-HKT Telephone, the owner of Lai Chi Kok Engineering Centre, obtained temporary permission in September 2010 to use part of the third to fifth floors and the 12th to 14th floors as a telecommunications research and development centre, network design and planning offices and offices for its mobile business for a quarterly fee of HK$666,800, which would be revised every three years.

The document also stated that permission would be immediately revoked if HKT failed to obtain the necessary planning approvals.

In December 2016, HKT received another temporary waiver, effective between June 2015 and June 2018, to use a 6,531 square-foot area on the 13th floor for “general office purpose” for an annual fee of HK$729,192.

Through an access to information request, FactWire also obtained documents related to planning applications for the building from around 2006 to 2009, which reveal that HKT had been using waivers that were “approved on a temporary basis for a period of three years” to use a number of floors in the building as offices since 1985.

According to a temporary waiver granted in 2010, parts of the third to fifth and 12th to 14th floors of PCCW’s Lai Chi Kok Engineering Centre are permitted to be used as offices (image shows the permitted area on the third floor). Photo: Factwire.

Documents prepared by the consultancy firm Townland further reveal that the Lands Department never asked the company to apply for planning approvals from the Planning Department or the Town Planning Board before granting the waivers until after 2004.

The applications to operate general offices and offices for HKT’s mobile business in a total floor area of 23,748 sq ft were later approved by the Town Planning Board based on the opinions of the Office of the Telecommunications Authority and the Planning Department, which said that the company did not require planning approvals for other proposed uses.

However, government records on the statutory planning portal show that HKT did not apply to the Town Planning Board again when the approvals for offices on the third, fifth and 13th floors expired.

Meanwhile, according to an HKT employee and a job listing, the third to fifth floors as well as the 13th floor of the Lai Chi Kok Engineering Centre are still currently used as offices for HKT’s mobile network and human resources department respectively.

The office on the fourth floor used for mobile communications engineering has never received planning approval from the authorities.

According to a temporary waiver granted in 2010, parts of the third to fifth and 12th to 14th floors of PCCW’s Lai Chi Kok Engineering Centre are permitted to be used as offices (image shows the permitted area on the fourth floor). Photo: Factwire.

FactWire’s investigation also revealed the lack of supervision on the use of temporary waivers by the Lands Department, which did not ask PCCW to renew the permissions until several months, and in some cases, more than a year after they expired.

For example, according to official documents relating to a waiver application for the Lai Chi Kok premises in February 2008, the department only suggested PCCW to renew the waiver for an annual fee of $3.5m 18 months after the last one expired in 2006. It also said at the time that it would take enforcement action if the company did not obtain approval from the Town Planning Board before June 2008.

But according to the minutes of a planning board meeting in November 2008 – when all temporary waivers for offices in the building had expired – a government representative only said the Lands Department would “consider taking lease enforcement action subject to their own priority.” In response to a media enquiry at the time, the department said it had agreed to an one-year extension of the waiver and that, from 1985 to 2009, HKT had converted parts of the building into offices by paying $116m in temporary waiver fees.

The Lands Department did not immediately respond to requests for comment.

In the last four months, FactWire made three access to information requests for information on waiver applications from the last three years relating to telephone exchanges owned by PCCW and HKT. The Lands Department only provided information on seven telephone exchanges that was updated in July 2012 and declined to provide more updated records citing administrative reasons.


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