Plan wins support, but price tag an issue

PUBLISHED : Wednesday, 01 October, 2008, 12:00am
UPDATED : Wednesday, 01 October, 2008, 12:00am

Economists, cruise operators and lawmakers have generally applauded the government's move to shoulder the construction costs of a new cruise terminal at Kai Tak, but democrats have their doubts about it.

The plan can prevent charges of government-business collusion and bring more flexibility to the project, said Charles Li Kui-wai, associate professor of economics and finance at City University. 'Now that it doesn't need to give floor space to developers, the government can instead build an exhibition complex and arts venues.'

As long as the government hands the business operation to the private sector, he added, the project would be a sound investment in infrastructure.

One cruise operator had no objection to the relatively short tenancy period of about seven to 10 years for the operator. Massimo Brancaleoni, a vice-president of Italy's Costa Crociere cruise line, said the tenancy agreement to operate a terminal was usually between 20 and 25 years, to allow more time to recoup the construction cost.

But in Hong Kong, he said, since the government was shouldering the cost, it was reasonable that different terms would be imposed. Mr Brancaleoni sits on the government's advisory committee on the cruise industry.

Democrats are concerned about the costs. 'It is an expensive project,' lawmaker Fred Li Wah-ming said. 'We are worried that the terminal will become a replica of Disney. The government boasted how the theme park would boost the economy and attract many tourists, but all that has fallen short of expectations.'

The Democratic Alliance for the Betterment and Progress of Hong Kong would support the project, lawmaker Chan Kam-lam said: 'We need a confidence boost in the face of the financial tsunami. This is the quickest way to get it done,' he said.

Liberal Party lawmaker Miriam Lau Kin-yee also backed the plan. 'Large cruises are now unable to berth at Ocean Terminal,' she said. 'We badly need a larger one to maintain our status as a tourism city.'

Ronny Tong Ka-wah of the Civic Party agreed. 'We were disappointed that the two consortiums failed to follow the rules in the last tender. It is appropriate the government now takes it into its own hands.'

Paul Tse Wai-chun, legislator-elect for the tourism sector, also expressed support, saying the plan would attract tourists. 'But a good transport link will be necessary to transmit cruise passengers to other tourist spots, because the first berth will come ahead of other developments at Kai Tak.'