Land Administration Practices and the Redevelopment of Franchised Bus Depots: An Implicit Consideration Analysis of the Terms of Bus Franchises and Land Leases

Department: Real Estate and Construction
Research Centre: Ronald Coase Centre for Property Rights Research;
Active Dates: October 2011 - December 2013

Principal Investigator: Lawrence W.C. LAI (PI), K.W. CHAU (Co-PI)
Funding body: PPR


Have there been any true concessions in the government land conversion process that have favoured franchised bus operators? Through an examination of the conditions of the franchises and the terms of the relevant land leases, this study tries to verify or debunk the claim that there has been government favoritism to business monopolies.


  1. Find out if the terms of the Crown (Government) Leases, post-1933 conditions of the franchises, Conditions of Modifications/ Surrender and Re-grant for KMB and CMB’s garages, depots, and workshops provide specific concessions regarding land acquisitions for subsequent modifications to favour other uses.
  2. Evaluate the environmental gains/losses of converting bus depots into non-depot uses and their relocation to other places.
  3. Evaluate if there is any evidence of gain/loss in operational efficiency upon the relocation of the depots from their original to their replacement sites.
  4. Evaluate the credibility of land administration practices for changing the use of old bus depots and make recommendations for reforms when they are deemed useful.


  • Information on the addresses of the depots was obtained from specialist books on Hong Kong buses backed by a thorough search of the telephone directories.
  • Land conveyance records of the depots from the Land Registry were examined.
  • Depending on the availability of subsequent lease modifications for these sites, the “conditions” of sale or grantexecuted obtained from the Public Records Office.were also analyzied.


  • Our study found that the sources of the sites for depot use by franchised bus companies were originally either on privately-owned sites acquired second-hand from the land market or on sites purchased directly from the government’s public auctions (paid with a substantial sum) of industrial sites.
  • We found no instance in the conditions of sale in which the land use was limited to “franchised bus depots” or “bus depots”.
  • We can deduce that there should have been no major environmental problems when the government allocated depot sites under a system of contractual planning.
  • We cannot draw any direct conclusion from the changes of depot numbers or dispersal.

Conclusion and Policy Impact

  • There was no government concessions to public bus companies in land allocation of bus depot land or lease modfications for these depots.
  • Redevelopment of bus depots generally had planning gains.
  • This study should dispell suspicions about government favoritism to bus companies by granting them cheap land or allowing them to convert depots into real estate development at sub-market premia.
  • It calls for greater government transparency in franchise conditions and STT terms, which have hiherto been kept secret between government and the bus operators.
Enlarge Photo: Figure 1: Newspaper picture clipping of Wong Chuk Hang CMB bus depotEnlarge Photo: Figure 2: Chai Wan CMB depot file photoEnlarge Photo: Figure 3: Kwun Tong KMB How Ming Street Depot (A now an office/commercial building)Enlarge Photo: Figure 4: Residential building on former KMB Lai Chi Kok depot