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U.S. Disney, Hong Kong agree to park expansion in China city

U.S. Disney, Hong Kong agree to park expansion in China city

U.S. entertainment giant Disney and the Hong Kong government have reached a long-awaited agreement to expand the Disneyland amusement park in the Chinese city, the government said yesterday.
The deal will see 30 new attractions at the park built in the next five years and will cost 3.63 billion Hong Kong dollars (US$465 million), the government said in a statement.
In a move that will give a boost to the troubled park, Hong Kong Disneyland will be enlarged by 23 percent with three new theme areas, the statement said.
"Hong Kong Disneyland is a major tourism infrastructure of Hong Kong. Its expansion will bring significant benefits to our tourism industry and to the overall economy," Hong Kong chief executive Donald Tsang told reporters.
The government said it was not putting in any cash as part of the deal. However, it will convert some its loans to the park into equity, Tsang said.
Under the deal, the government will retain control of the park with a stake of 52 percent, although that is reduced from 57 percent as a result of the injection of new funds.
It is hoped the expansion will create more than 3,500 jobs.
Disney has been desperate to increase the number and quality of the attractions at the US$3-billion venue since it opened in 2005.
But the Hong Kong government has been reluctant to plough in any more cash after criticism that the initial deal was bad value for taxpayers and worries about visitor numbers, which have remained below expectations.
The park was hit by a string of controversies over its first three years.
A long-running feud with staff unions over working conditions, several food poisoning scares and a ticket mix-up that provoked a near-riot with customers clambering over spiked fences, forced the park to reshuffle its management team within just a few months of opening.