The volume and necessity of local public investment fund Macau Investment and Development Limited (MID) involvement in the Traditional Chinese Medicine Technology Industrial Park in Hengqin, has always posed many questions to local society.
The recent Commission of Audit report, which criticises the choices made by MID’s management while conducting these projects, comes then, as just an official confirmation of all the issues local society has had with the company.
Created in 2011, MID’s main purposes were to take part in economic and commercial regional cooperation projects, especially with Guangdong, although all of its initial MOP400 million (US$50.1 million) capital was committed by local authorities.
According to the report between 2011 and December 2019, six capital increases were registered at MID, totalling MOP9.2 billion, with the total amount spent on investment projects reaching MOP8.9 billion, of which MOP8 billion were invested in the TCM Park project, the main focus of the CA audit.
Latest estimates by the company, last year, predicted that the total value of the investment in the Industrial Park could reach RMB16.3 billion, with the project even including some kind of TCM-themed resort and a TCM science and technology museum.
While in 2011 MID held 51 per cent of Guangdong-Macau Traditional Chinese Medicine Technology Industrial Park Development Co Ltd, a joint initiative and Zhuhai Da Hengqin Investment Co Ltd to develop the park, by 2019, that share had increased to 70 per cent.
The main purpose of this project is to create an international basis for the quality control of traditional Chinese medicine and the creation of an international business platform for the healthcare industry, an area that has been long touted as one of the strategies for diversifying the local economy, albeit a debatable approach.
The CA notes that while having considered different development models – lease the land, lease the premises or joint construction, MID chose the most costly option, to build and manage most of the project, with no analysis of the advantages and disadvantages of the development models, or estimates of the costs involved in each option.
As with previous reports on projects with public involvement by local funds, such as the Light Rapid Transit line or Viva Macau, reckless management decisions and failure to set development and expenditure goals end up with ballooning public expenses, with a notable failure of oversight by the public funds and departments that shell out the money.
Interestingly, while agreeing with most of the CA’s comments, as it is normal for the targets of public audits – MID argued that the reasons for the choice of this development model were due to the differences in the systems applied in Macau and Mainland China.
Local authorities, of course, have already agreed to completely review the group’s structure – which includes 21 subsidiaries – and its management, but the money already spent in the TCM Park makes it unlikely the project will just be halted.
The benefits of this costly Chinese medicine science park project has brought to the Macau SAR, its economy and residents remain to be seen, apart from the usual money dispensed to large construction groups, and the project serves as another example of a large scale project which seems to serve more a political purpose, in this case, the promotion of TCM, than a practical initiative with clear objectives.
It also shows the difficulties in conducting joint projects between two still very different jurisdictions and legal systems, a problem that has already put doubts in many local residents’ minds, pondering real estate investments in Hengqin.
At the same time, the city remains with only one public hospital in Macau and the future Cotai Hospital is unlikely to be even finished by 2023 and is expected to cost some MOP10 billion.
It seems difficult to argue that maybe if all the investments made since 2011 towards a 500,000 square meters TCM Park had been put forward to a new local public hospital instead, maybe Macau residents would have a new state of the art medical facility much earlier.
It would have surely been money well spent.