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Jake's View
PUBLISHED : Sunday, 13 October, 2013, 12:00am
UPDATED : Sunday, 13 October, 2013, 3:59am

Let container port go into terminal decline, then let's build some flats

BIO

Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.
 

There have been suggestions that Kwai Tsing Container Terminals is no longer needed. Some even suggest it would be better suited as a location for housing.

This might alleviate the city's housing shortage, but how would this affect Hong Kong's logistics industry which employs some 200,000 people?

Gerry Yim, Managing director,
Hong Kong International Terminals

Letters to the Editor,October 9

Teacher, teacher, I had my hand up first. The answer is that it will affect Hong Kong's logistics industry very little as only a small fraction of these 200,000 people are employed in moving containers from one ship to another.

Increasingly this is all that we do at the container port. Now that the mainland has its own smoothly functioning ports it no longer makes sense to ship goods from workplaces in China the long way round. Why go through a Hong Kong border, with the many grasping hands that afflict all border crossings, and then down yet more congested roadways to a Hong Kong port when the shorter route is much easier and cheaper?

As the chart shows, the tonnage of actual exports and imports moving through our port has declined steadily over the past 15 years, while the total tonnage of freight through mainland ports has risen more than sevenfold.

The business we still have left is transshipment of goods from one mainland port to another, and this now accounts for more than 60 per cent of the business through our container port.

The reason we still have it is that Beijing forbids foreign-flagged vessels from carrying goods between mainland ports. This is called cabotage, and is considered a very bad thing by protectionist-minded governments.

Hong Kong, however, is not considered foreign for these purposes and so we are allowed to handle these shipments.

The continued existence of our port therefore depends heavily on Beijing not realising that an artificial restraint on shipping really does not make much economic sense and only adds unnecessarily to the cost of trade at a time when the mainland's exports already face pricing pressure.

Let the authorities once appreciate this and our transshipment business will go into rapid decline. Costs will then rise even more rapidly for the bedrock import and export business. Its decline will then accelerate as well, and we shall have the answer to our chief executive's prayers for more land to solve our supposed housing shortage.

That comes to 2.7 square kilometres of land. Cover a quarter of this land with 30-storey housing blocks featuring flats of 750 square feet each and we get 290,000 flats.

Consolidate this with container facilities on Tsing Yi and a little reclamation infilling and we could have perhaps five square kilometres of land. This is enough land for well in excess of the 470,000 flats our bureaucrats are talking of building.

Now I am not saying that we should tell our container port operators to get out of Kwai Chung and send in the bulldozers immediately. Mr Yim is right that there is still a worthwhile business being carried out there.

But it is one in terminal decline and we should no longer be propping it up with infrastructure projects for a future demand that we can now see will never materialise.

Let this business come to its natural end, as it did in London and New York. Around the world it has become apparent that inner cities are not the right places for big ports.

Let's just stand by, build no more facilities to serve the port and wait until our big redevelopment opportunity falls into our hands.

jake.vanderkamp@scmp.com

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9 Oct 2013 - 12:00am

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impala
@sfadams
It wasn't me who proposed rezoning a quarter of the port, it was Mr van der Kamp. And I don't think he means: use 25% for houses, and use 75% for roads etc. He means: shut 25% of it, use the land for residential development (incl roads etc), and keep 75% of the port. For now.

You can work out -crude- actual density ratios of some existing areas here: ****www.gov.hk/en/about/abouthk/factsheets/docs/towns&urban_developments.pdf

Tsing Yi/Tsuen Wan covers around 3,250 hectares with a population of about 800,000 people. That is of course only including land for actual development, not the large parts of Tsing Yi that are undeveloped and green.
impala
@keresearch
I would suggest you do some research on the actual density guidelines used by the Hong Kong planning department here:
****www.pland.gov.hk/pland_en/tech_doc/hkpsg/full/ch2/pdf/ch2.pdf

Have a look at page 26 please. Density guidelines for land primarily depend on plot size and zoning area, with key variables being flat size, household size assumptions and of course the target density of the area.

They vary from around 2,500 people per hectare (central Kowloon and the densest parts of New Towns) to around 400 people per hectare ('rural' development). If we would plan a New Town where the port is now, a reasonable target density would probably be in 1,200 ~ 1,500 range.

That would put at most 100,000 people in Mr van der Kamp's 68 hectares. His claim to build 290,000 FLATS there would take the density beyond even the densest of existing areas in Hong Kong and require a density FAR in excess of even your 'perhaps' 400,000 people psqkm (= 100 ha).

My point is not pro/contra port or pro/contra rezoning it. I simply note that the port is there and appears to be economically viable in one way or another. Stating that shutting down 25% of the port can provide 290,000 FLATS (not people) is simply dishonest. Realistically, it would provide housing for max 100,000 people. So by all means, let's discuss this as a policy option, but let's do so in an intellectually honest manner, not by presenting plain lies and false choices like Mr van der Kamp does.
rpasea
LKS shouldn't mind moving the port as he can make more money on housing.
John Adams
Correct ! Concrete over all the container ports ASAP
If LKS objects legally then pay him whatever land premium it requires to buy back the container land ( and sea) space
Maybe it will go some way towards paying his Australian tax bill
The transshipment is the biggest tax scam in HK - far bigger than all the money-laundering in the world
_______________
PS: Does LKS actually own our sea as well as most of our land ?
johnyuan
John Adams:
I will not rule out LKS is timing his waterfront property for housing through a public’s outcry like today’s article and comments. He wants the best price offer by government for those properties that may not deem all suitable for luxury flats. We must respect LKS's wit at least.
johnyuan
.....
johnyuan
The container shipping industry in Hong Kong, as I understand it, it was all about using Hong Kong as a place to circumvent import restriction by US on China’s goods to US. This re-export business just does that. Or may be the restriction on foreign-flagged vessels from carrying goods between Mainland ports came later.
……
Whatever the reason or reasons for Hong Kong to have such a sizable container port, there is no justification environmentally to keep such industry. The most valid point by JVDK is that the inner city is not the right place for the terminals when they cause heavy road traffic. Close the terminals down.
……
I don’t know how many LKS owns those terminals, but he knows diligently well the use of those lands how and when in his favor. It is up to CY Leung to act for the larger interest of Hong Kong.

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