Lantau gets the official nod as home to contested tenth terminal
Tung pre-empts consultants' report on port expansion
The chief executive yesterday tipped Lantau as the preferred site for the controversial Container Terminal 10, pre-empting guidance expected from an $8million port cargo study due to be released in March.
The government had been examining three potential sites - Tsing Yi, Tuen Mun and northwest Lantau - for the new terminal, the construction of which is opposed by operators of the existing ports.
'The new container terminals may be built on Lantau,' Tung Chee-hwa said in his annual policy address, without mentioning other site options. 'In order to raise our competitiveness in the long-term, we will recommend building more container terminals.'
While officials on the sidelines of the address said the location of the terminal remained 'under review', the chief executive's comments were widely seen as government approval to build CT10.
William Fung Kwok-lun, group managing director of Li & Fung, applauded the government's initiative.
'As an exporter, we welcome the building of Container Terminal 10,' Mr Fung said. 'We are a big user of Kwai Chung. Hong Kong has the most expensive port charges in the world because demand exceeds supply. So I agree with Mr Tung that the building of Terminal 10 is necessary.'
Present port operators insist that, with improvements in handling efficiency, a new terminal will not be needed until 2016.
The $8 million consultancy report, being compiled by GHK, is expected to recommend a site on northwest Lantau as the 'preferred option' for CT10, according to industry sources interviewed for the report.
But the report is also expected to suggest leaving the Tsing Yi option open in the increasingly unlikely case the proposed bridge linking Macau and Zhuhai with Hong Kong does not gain final approval in Beijing.
'If the bridge is not built, the northwest Lantau site becomes far less attractive,' one of the sources said.
He said the Lantau option would be estimated to have a base cost of about $7 billion for terminal infrastructure and $2 billion for equipment.
The estimate is understood to be based on 2002 prices and calls for the construction of six berths by 2020 - three initially - and a spur road of between 3km and 4km linking the facility to the bridge, which will reach Lantau between the port and the airport.
Without the bridge, the cost increases to $13 billion after adding far lengthier connecting infrastructure. According to sources, the site is preferred over Tsing Yi as its base cost is cheaper, if the bridge is built.
The Tsing Yi site's port and equipment cost will cost about $8 million.
But as much as $15 billion more will have to be spent on obtaining the land from present holders Exxon Mobil, CalTex and ship-repair yard owners.
Mr Tung did not say where the money would come from and one industry expert questioned the attractiveness of the project.
'Given that it is 20 to 40 per cent cheaper to build a terminal in Shenzhen, why would a private investor do it on Lantau?' he asked.
The recommendation to build CT10 will be based on projected 5 per cent annual growth in overall port throughput - river and ocean trade - through to 2010.
