The Hong Kong Special Administrative Region (SAR) Government and the Walt Disney Company have reached an agreement to develop and operate Hong Kong Disneyland - a Disney theme park - in Hong Kong after nine months of negotiations.

In announcing the decision, the Chief Executive of the SAR, Mr. Tung Chee Hwa, said that the Walt Disney's choice of Hong Kong as the site for its third international theme park destination, outside the U.S., is a vote of confidence in Hong Kong and its future.

"It's a good deal for Hong Kong. It will produce substantial long-term economic returns and enhance our international image as a world city where things happen," Mr. Tung said.

"The agreement is good news for our economy now and in the longer term. You cannot put a price on the message that The Walt Disney Company sends to the world in choosing Hong Kong for its third international theme park destination," said Mrs. Anson Chan, Chief Secretary for Administration.

The SAR government will spend a total of C$4.23 billion on equity (C$613 million) and loans (C$1.06 billion) for the Hong Kong Disneyland project and the associated infrastructure works (C$2.56 billion). It would earn a reasonable return on its equity while the loans would be repaid with interest. In addition, the subordinated shares representing the land premium could be converted into ordinary shares. And the economic benefit flowing back to the community over the next four decades would amount to some C$27.9 billion at today's prices.

Phase I of the project, upon opening in 2005, will also include a 1,400-room Disney themed resort hotel complex and a retail, dining and entertainment centre at Penny's Bay on Lantau Island. The number of hotel rooms will increase to 2,100 when Phase I reaches its full capacity.

Other key facts of the theme park include:

• Hong Kong Disneyland Phase I will occupy 126 hectares at Penny's Bay. This can be expanded to 180 hectares at a future date.
  
  
• The Government and the Walt Disney Company will form a joint venture company to develop and operate Hong Kong Disneyland which will cost C$2.66 billion.
  
  
• Hong Kong Disneyland Phase I will provide 18,400 jobs on opening and up to 35,800 news jobs over a 20-year period. Around 6,000 jobs will be created during the construction phase of the theme park. In addition, some 10,000 jobs are expected to be created by the land reclamation and other associated works being funded by the Government.
  
  
• The Hong Kong Disneyland project will generate (at today's prices) an estimated C$27.9 billion boost to the economy over a 40-year period in terms of value added, such as employment income and profits for small and large companies in Hong Kong.
  
  
• Hong Kong Disneyland is expected to attract 5.2 million visitors (including 3.4 million tourists) in its first year, rising to 10 million (including 7.3 million tourists) after 15 years.
  
  
• Additional spending by tourists should amount to some C$1.56 billion in the first year of operation, rising to C$3.16 billion per annum in year 20 and beyond.