"We have considered factors such as additional competition from Universal Studios in Singapore and a Disney theme park in Shanghai," Chan said, forecasting 7.3 million visits by 2015.

The Legislative Council's panel on economic development held a special session today to discuss a proposed extension of the Disney park, which hasn't met expectations as a tourist draw.

Hong Kong Disneyland received 14 million visitors in its first three years, averaging between 4.5 million and 4.6 million a year, Chan said on June 30, when the government announced an agreement on the extension. That compared with an initial target of between 4.2 million and 5.6 million a year, she said then.

The agreement will be put to the Legislative Council's finance committee on July 10. The government will probably get enough votes to pass it, even as legislator Emily Lau called the plan "a raw deal."

"It is really regrettable," Lau said today in a phone interview. "We continue to lose money, but they can't tell us how much. And the theme park in Shanghai is going to be 10 times bigger than Hong Kong's; it is going to create a lot of problems for us."

Disney Shanghai

A few months ago, Disney signed a framework agreement to build a Shanghai theme park that's pending approval from China's central government, Chief Executive Officer Robert Iger said on a May 5 conference call. No schedule was mentioned.

"It will be very difficult for me to support" the proposal, said Lau, who chairs the finance committee.

Disney, which didn't send a representative to today's special session, will spend HK$3.5 billion ($452 million) to add rides including "Toy Story Land" at the park. Under the agreement, the company's stake in the project will rise to 48 percent from 43 percent.

The expansion will boost the economy as unemployment in the city swells to a four-year high 5.3 percent. It will bring 3,700 construction jobs and an additional 600 long-term positions when completed, Chief Executive Donald Tsang said June 30. During the past three years, Hong Kong Disneyland has contributed 0.2 percent annually to the city's gross domestic product, economist Chan said.

The Hong Kong government will convert "a substantial part of its loans" into equity, while maintaining at least HK$1 billion of the lending and remaining the majority shareholder, according to the agreement. No details were disclosed. The city has lent HK$6.1 billion for the project.

Hong Kong invested $418 million in the park in return for its 57 percent stake, and spent a further $1.8 billion on landfill, roads, sewers and a rail line. Disney invested $320 million for its holding.