CHINA GRANTS LAND LEASE FOR NEW UNIVERSITY OF

UNCLAS HONG KONG 001246 SENSITIVE SIPDIS STATE FOR EAP/CM E.O. 12958: N/A TAGS: ECON EFIN EINV ETRD MO HK SUBJECT: CHINA GRANTS LAND LEASE FOR NEW UNIVERSITY OF MACAU CAMPUS ¶1. (U) Summary: The University of Macau (UM) is set to benefit from a unique arrangement that will allow it to build a new campus on nearby Hengqin Island. The Macau SAR government will have jurisdiction over the new campus, despite its location in Zhuhai, Guangdong Province. Macau Chief Executive Edmund Ho noted in a press statement that the university's decision-making autonomy over educational and governance issues would be fully retained. End summary. ¶2. (SBU) The Standing Committee of China's National People's Congress (NPC) on June 27 passed a bill allowing Macau to lease 1.1 square kilometers of land on Hengqin Island in the Zhuhai District of Guangdong Province. Located directly across a narrow waterway from the Cotai area of Macau, the land will be used to construct a new UM campus at an estimated cost of USD 750 million (MOP 6 billion). That amount excludes the cost to construct a planned tunnel linking Macau to the new campus. Macau's Secretary for Transport and Public Works Lau Si Io stated during a press conference that construction of the campus and tunnel is anticipated to be completed by the end of 2012. That timeframe may be aggressive, according to a senior UM official who told EconOff on July 6 that architectural plans for several key campus buildings have not yet been finalized. ¶3. (U) As a condition to the land lease agreement ending on December 19, 2049 (the date when Macau's Special Administrative Region status is also set to expire),Macau's jurisdiction over the property will commence only upon completion of the campus' buildings and transportation infrastructure. According to unidentified sources of the Macau Post (Macau's leading English-language newspaper),the new UM campus will be "completely separated from the rest of Hengqin Island by a moat." This will reportedly enable the tunnel connecting Macau with the new campus to operate without immigration checkpoints. UM Rector Zhao Wei said the new campus will have a minimum capacity of 10,000 students, compared with UM's current enrollment of 6,600 students. It will allow UM to expand its academic offerings, open three new research and development centers, and construct dormatories for students. ¶4. (SBU) Macau Chief Executive Edmund Ho on June 27 publicly described the lease agreement as a "lavish gift" from Beijing that "fully reflects the superiority of the 'one country, two systems' policy." Payment terms under the Hengqin Island land lease have not yet been disclosed. A UM professor recently told EconOff that execution of the lease was delayed by several months, due to Beijing's reluctance to grant UM leaders an acceptable degree of decision-making autonomy over the university's policies and other affairs. Addressing this issue, Ho said the central government agreed to allow the new UM campus to be run in accordance with Macau's laws and regulations, including the university's "right to autonomy." DONOVAN