What happened to Hong Kong's Kai Tak airport?

It's probably the most valuable strip of derelict land in the world.

The defunct Kai Tak airport sits right in Hong Kong's Victoria Harbour and is estimated to be worth up to 40 billion dollars -- the equivalent, experts say, of around 30 of the world's tallest skyscrapers.

"It is a jewel," said Nicholas Brooke, chairman of Hong Kong-based Professional Property Services. "I'm sure it's the most valuable piece of derelict land in the world."

And Kai Tak was, until it closed in 1998, also one of the scariest airports in the world.

Planes would make a gut-tingling sharp turn over hilly Kowloon and then pass so close to apartment blocks that passengers felt they could almost touch laundry as it dried on balconies.

But, since the new Norman Foster-designed airport was opened on reclaimed land a half-hour's fast train ride from the city, the Kai Tak site has been crumbling.

"Kai Tak is right at the heart of Hong Kong," said Brooke, who sits on the Harbour Enhancement Committee, a group that advises the government on land use around the city's waterfront.

"To have the opportunity to create a business district or a residential district right in the centre of a capital city -- it's unique," he added.

"And that is why it has attracted such a high value, a land value of between 25 and 40 billion dollars."

The land is worth around 30 International Finance Centres, Brooke said, referring to a huge glass and steel tower that dominates Hong Kong's skyline and is the world's fifth biggest office building.

To further try to illustrate the sheer scale of the land's value, Brooke added: "In terms of medium rise property, it's worth two square kilometres (0.8 square miles) of Manhattan -- and all of (London's) Canary Wharf."

In a city where a luxury studio apartment sold recently for more than three million dollars, there is no shortage of developers who would be keen to get a slice of the old airport pie.

There is water on two sides, views over the harbour and no pesky residents or businesses that need to be moved out of the bulldozers' way.

Kai Tak has been dormant for more than a decade because the city's authorities struggled to reach a consensus about what exactly to do with it. It is in their interests to make use of the site, as almost a third of the Hong Kong government's revenues come from land sales.

Also, thanks to a moratorium on land reclamation from the ever-shrinking harbour, there is unlikely to be any more new land in the future to sell-off -- further pushing up Kai Tak's value and increasing the need for action.

And now, finally, work has begun on an ambitious redevelopment scheme.

A scale model of plans for the site sits in the lobby of the government's planning offices on the outskirts of Kowloon.

The 320 hectare (790 acre) site will have a sports stadium, a public park and, at the tip of the peninsula, a cruise terminal. And, of course, in the middle of the old runway will be some of Hong Kong's most exclusive housing.

Eric Yue Chi-kin, Kowloon's chief planning officer, buzzed proudly around the model: "Going down here is the runway precinct," he said, pointing at some apartment blocks that look -- even in model form -- hyper expensive.

"It is a very unique location, because it has water on two sides and has a very spectacular, panoramic view to the Victoria Harbour."

The Hong Kong government plans to pump 2.6 billion dollars into getting the infrastructure up to scratch, and hopes to put the contract for the first phase, the cruise terminal, out to tender by the end of the year.

Mak Chi-biu is the chief engineer for the site and the man in charge of turning Yue Chi-kin's dream into reality.

He stands in a tall building looking down over the long slab of broken, weed-infested land that cuts into Victoria Harbour -- and out into Hong Kong's future.

"The whole development cost will be about 12.8 billion dollars," he said, sweeping his hand up to the tip of the peninsula, where the cruise terminal will be. "The idea is to make Hong Kong a cruise hub of the Asia-Pacific region."

So the runway, which was expanded by the slave labour of prisoners of war during the Japanese occupation in World War II, will again have construction workers swarming all over it. It should all be finished somewhere around 2025.

But property experts urge the government to be cautious and stick to the elements of the plan which offer something to the public.

"Kai Tak is an asset that I think has to be shared by everybody," Brooke said. "You could build luxury there and sell it all off to investors from mainland China.

"But I think we have to build something where there is a range of housing so that people from all walks of life can participate. There is a great danger that you do something very exclusive and you shut out the majority."

* * * * *