NEWS that Britain and China have agreed to redouble efforts to end the deadlock over Container Terminal 9 (CT9) has been welcomed by the shipping industry. However, with capacity improvements being introduced by operators - because of the delay in building CT9 - and signs of a downturn in container traffic growth, the question is whether or not Hong Kong needs another terminal urgently. Some say not until 2000, arguing that there will be enough handling capacity until then. According to the Port Development Board (PDB), Hong Kong is expected to handle a record 12.7 million teu (20-foot equivalent units) this year, up 15 per cent from the 11.05 million teu last year. The endorsed handling capacity at the Kwai Chung terminals is 9.15 million teu, up from the 7.2 million teu forecast by the PDB early this decade but they are expected to handle about 7.75 million teu this year. However, Hongkong International Terminals (HIT) managing director John Meredith said he expected maximum growth at the terminals to be about 10 per cent this year. 'Growth at Kwai Chung terminals is slowing down with each passing month.' He said that if Kwai Chung's declining growth was projected at five to seven per cent next year, the handling capacity would be sufficient until 2000. Hong Kong handled 5.86 million teu in the first six months, up 14.5 per cent over the corresponding period last year. Throughput at Kwai Chung container terminals was 3.87 million teu, a rise of 15.8 per cent. This was in line with historical average growth of 15 per cent a year, which is used by the PDB as the basis for projections and for triggering new container berths. If throughput at Kwai Chung rises 15 per cent this year and beyond, two new terminals will be needed in three to five years, even with the capacity enhancements in place. At 15 per cent growth a year, terminal throughput next year will amount to 8.9 million teu, 10.25 million teu in 1997 and 11.8 million teu in 1998. Therefore, by 1999, throughput will exceed capacity by 2.6 million teu, requiring six more berths, or 1.5 terminals. But industry insiders said the half-yearly growth figure was distorted because throughput at COSCO-HIT, which operated two berths at CT8, was up more than 150 per cent. COSCO-HIT is a joint venture between China Ocean Shipping Co and HIT. The other two berths of CT8 are owned by Modern Terminals Ltd (MTL). COSCO-HIT had high growth in the first half because COSCO took its mid-stream operations there and took away a chunk of its business from HIT. It is estimated that COSCO accounted for about nine per cent of HIT's throughput in the first half of last year. Excluding this, HIT's throughput from other customers increased six to seven per cent. Consequently, throughput at HIT's older terminals 4, 6 and 7 was down three per cent in the first six months. Growth at MTL, which also operates terminals 1, 2 and 5, is about six per cent. Terminal 3, a dedicated facility owned by Sea-Land Orient Terminals (SLOT), is expected to handle about one million teu this year. While CT9 was in limbo because of political bickering between Beijing and London, MTL, HIT and SLOT did what they do best - became more efficient. HIT embarked on a $1.5 billion programme last year to upgrade its equipment and systems that will see its capacity rise from 4.2 million to 4.8 million teu. MTL is also modernising and upgrading its equipment and improving efficiency at the older terminals with an investment of nearly $1 billion. Its capacity will increase from 2.4 million to 3.2 million teu by July 1997. SLOT is also to install more cranes at a cost of $100 million to improve efficiency and capacity. HIT and MTL said they would invest in a new terminal. However, the question to be addressed is whether CT9 should be located at Tsing Yi, near Kwai Chung. Increasing container throughput at Kwai Chung has resulted in worsening congestion in the area over the past few years. CT9 was to be located at Tsing Yi originally because it was the only deep-water site available and there was no road access to Lantau, where future terminal facilities were to be based. That is not the case today as the new airport highway slices through Lantau. Perhaps the government should look into the possibility of locating the next terminal away from the congested Kwai Chung area. An early start on the Lantau port project would help to create more jobs, especially when unemployment is on the rise.