A bumpy ride - Jake van der Kamp

PUBLISHED : Friday, 08 January, 2010, 12:00am
UPDATED : Friday, 08 January, 2010, 12:00am

Let's shed a tear, but one tear only, for the inhabitants of Tsoi Yuen village, who do not want to abandon their homes to make way for a new cross-border railway. They are not the first people in the New Territories to be pushed aside for infrastructure projects and they are unlikely to be the last. Set the price high enough for them and no tears need be shed at all. Let us also dispense with the argument that we must build this railway because Beijing says we must. It is not always stated so baldly, but fists are fists even when gloved and, if we nod our heads to this fist, then we can say goodbye to all talk of 'one country, two systems' and a high degree of autonomy. It matters little, then, whether arguments for a railway are well or ill founded. Hong Kong's own foundations will be gone.

The question that really faces us on this railway is a simple one. Does it make sense to spend HK$66.9 billion, about HK$30,000 per household, to reduce the time it takes to travel by train from Kowloon to the border and connect with the mainland's high-speed rail system?

Have faith, say the railway's proponents. There were many naysayers when the Mass Transit Railway was first proposed, but who now doubts the wisdom of that investment decision? We must be ready for all eventualities and perhaps this means building more than we immediately need to build. We are building to be ready for the future.

Yes, but what future? The problem with this thinking is the assumption that the future is a straight-line projection of the past. The path that Hong Kong's economy took over the last 40 years required a heavy investment in transport infrastructure. It is a phase of investment that many economies encounter at a certain stage of growth. It does not continue forever.

The United States, for instance, went through a highway building phase in the 1960s but just imagine how slathered in roads the countryside of New Jersey would now be if this pace of road building had continued to the present day. In the last 40 years, the US has torn up far more railway track than it has laid.

It may be true that the mainland is now in the high-growth phase of transport investment but this does not say Hong Kong need be. The two systems are truly different. We have already made that investment and, given the relative emptiness of our latest roads, bridges and rail extensions, perhaps we have already made too much of it.

Whether we have or have not, however, it is on this sort of question that the debate about the railway should focus, not on the complaints of villagers or the supposed will of heaven.

In debating the question, we can ignore the favoured contention of our bureaucrats that the railway will create jobs and bring Hong Kong an economic benefit greater than the cost of the railway.

The simple fact of the matter, easily gleaned from any Introduction to Economics textbook, is that we create employment any time that we spend money. If we were to spend HK$67 billion to create a bubblegum manufacturing industry in Hong Kong, we would create thousands of bubblegum jobs. Would we create more jobs this way than if we spent the money on something else?

Good question. It can be applied to this railway as well. Could we generate more jobs if we spend the money on something else? The answer in general is that the most jobs are created, and the most economic benefit generated, when our money is spent to provide the goods and services that most people want at the lowest possible cost to them.

This admittedly does not tell us whether a high-speed railway would be such a service. It does tell us, however, that we need to consider this question of jobs and economic benefit much more closely than we have done. The railway may not be the best use of our money. Whether or not it is, however, we should certainly not make our decision on the basis of whether some Tsoi Yuen villagers are sad to leave their homes.

Equally, we can ignore the assertion that businessmen will find a high-speed journey across the border useful and, therefore, the railway will be good for the Hong Kong economy. It certainly would be if it cost us only HK$1 million. It is to cost us 67,000 times as much, however. Perhaps we should ask these businessmen if they would invest that much unless they can generate even more from it in profits. If they say 'yes', let them build it from their own resources. If they say 'no', let us hear no more about it being good for business.

The simple fact is that we are rushing to approve this railway project before we have even begun to study it properly. That's a mistake.

Jake van der Kamp is a former Post columnist