The Government has denied that poor planning is to blame for the predicament of 14 north Tsing Yi shipyards that have been asked to move 200 metres to a new site.
A government spokesman disagreed it was poor planning to allow residential development near the yards.
'Planning priorities in the early 1980s were to increase housing supply, whereas they now aim at improving living and working environments,' he said.
The spokesman said the new site would allow the Government to provide more district open space and it would serve as a buffer to minimise the impact of noise from shipyard operations.
The 14 shipyards have been fighting for two years to stay at their present site until the Government agrees to better compensation and longer leases.
Tony Chan, the yards' representative, said consultants hired by them had found the new site unsuitable for ship repair and shipbuilding.
Mr Chan, managing director of Dorman Shipyard, said the noise problem had been resolved, with a court allowing the use of metal hammers only on condition they are used with noise screens.
The Old Queen's College near the shipyard had noise-proof windows and did not have any problems, he said.
Mr Chan said the 15-year lease on the new sites was insufficient for banks to grant loans for setting up new businesses.