The past week has seen a rare and almost unprecedented public battle between two groups of Hong Kong companies and their directors. Rare, because differences between Hong Kong's billionaires are usually sorted amicably behind closed doors and also because a number of the directors involved sit on the boards of companies in rival camps. Two consortiums were formed to submit tenders to the Lands Department on February 23 to develop and operate Hong Kong's proposed $6 billion Tuen Mun river trade terminal. New World Infrastructure sided with Henderson Land Development, SHK Hong Kong Industries, Guangzhou Investment and Sea-Land Orient Terminals. Hutchison International Port Holdings (HPH) bedded with Sun Hung Kai Properties, Cosco Pacific and Jardine Matheson. This was interesting in that Jardines had switched sides, having aligned with New World, Sea-Land and SHK Hong Kong Industries to win rights to two berths in the Container Terminal Nine tender, to which Beijing so strongly objects. The New World consortium claims it offered to pay $1 billion more in land premiums to the government than the Hutchison group for the Tuen Mun site, and reacted angrily to rumours from an unidentified source that it might lose the deal. 'It would be one hell of a brave civil servant to throw away $1 billion,' Peter Fung Yiu-fai, director of SHK Hong Kong Industries, said. Hutchison argued this was not a straight cash race and that shipping industry expertise, corporate plans, and environmental and traffic impact were equally important. New World's consortium was accused of lacking shipping industry expertise by Hutchison, to which its partner Sea-Land took offence, being the largest barge operator in the United States and South America and operator of a large number of sea ports and river terminals around the world, including CT3 in Hong Kong. The Hutchison camp claimed New World's consortium would have to levy higher barge charges to recoup its higher initial costs. Independent barge operators may then choose not to use the Tuen Mun terminal, HPH managing director John Meredith said. New World took offence, claiming it could afford to bid more because of Sea-Land's greater operational efficiency. Hutchison and Sea-Land have since taken turns to make rival claims of greater track records in efficiency. The Lands Department will award the contract on Friday. Players in the game New World Development New World Infrastructure, the recently listed arm of property giant New World Development, is co-leading one of the consortiums in the Tuen River Trade Terminal bid. It has a minority stake in the two berths at Container Terminal 9 controversially awarded to Jardines and its then partner Sea-Land. It also has a stake in CT3 with SHK Hong Kong Industries and with Sea-Land's parent CSX Corp and associate Asia Terminals, in which New World also has a 49 per cent stake. Chairman Cheng Yu-tung and managing director Henry Cheng Kar-shun argue it would be bad for Hong Kong's image ahead of 1997 if the highest bidder does not win the Tuen Mun River Trade Terminal deal. Henry Cheng sits on the SHK Hong Kong Industries board, as does New World director Peter Cheng Kar-shing. Henry Cheng is also chairman of the advisory council of Better Hong Kong Foundation, of which SHKP's Thomas Kwok, Henderson's Lee Shau Kee and Cheung Kong's Li Ka-shing were co-founders. Henderson Land Dev Lee Shau-kee, Henderson Land's chairman, has kept quiet throughout the dispute. No wonder. He is going to be a winner whichever consortium wins the controversial Tuen Mun tender and has got nothing to gain from joining in the slanging match. He has interests in both camps. Henderson has an equal 30 per cent stake with New World in its consortium. Mr Lee is also vice-chairman and a founder of Sun Hung Kai Properties, which is fighting in the opposite corner. Mr Lee is also a director of Sun Hung Kai & Co, which has a 22 per cent interest in SHK Hong Kong Industries. Mr Lee, reputedly Hong Kong's richest man, helped set up SHKP many years ago in conjunction with the late father of the three Kwok brothers, who today run the group, and the late father of the Fung brothers, who today run SHK Hong Kong Industries. He later went on to found Henderson, while retaining a large shareholding and seat on the board at SHKP. SHK Hong Kong Industries Managing director Tony Fung Wing-cheung and executive director Peter Fung Yiu-fai claim the Government would be committing a 'billion dollar blunder' if the Lands Department awards the Tuen Mun deal to New World's consortium, which submitted a markedly lower land premium offer. The Fung brothers' late father helped set up property giant Sun Hung Kai Properties, along with Henderson's Lee Shau-kee and the late father of the three Kwok brothers. The Fungs now find themselves pitched against the Kwoks' SHKP in the Tuen Mun battle, though SHKP chairman Walter Kwok Ping-sheung is also an SHK Hong Kong Industries director. Henderson is in the same team as SHK Hong Kong Industries and New World fighting for Tuen Mun. Its chairman, Lee Shau-kee, is a director of Sun Hung Kai & Co, which has a 22 per cent stake of SHK Hong Kong Industries, but he is also an SHKP vice-chairman. Henry Cheng Kar-shun, New World's managing director, is also on the SHK Hong Kong Industries board. SHK Hong Kong Industries also has a stake in Jardines and Sea-Land's two disputed CT9 berths. It also has a stake in CT3 with Sea-Land and New World. Sea-Land Orient Terminals Sea-Land is one of the United States' biggest investors in Hong Kong and chairman Edward Aldridge says he would be furious if its consortium with New World fails to win the Tuen Mun tender. Sea-Land does not yet formally have a share in New World's consortium, but has pledged to take a 20 per cent stake once clearance has been given by CSX Corp's head office in the US. Mr Aldridge said Sea-Land would have had a stake from the outset but for the fact that it had to wait for the group's next full board meeting for endorsement. Regardless, Sea-Land would manage the Tuen Mun terminal should the New World consortium win. Sea-Land also has interests in CT3 through its parent CSX Corp and associate Asia Terminals, in which New World has a stake. Sea-Land's consortium won rights for CT9 and did not get to take them up. Its consortium has now bid $1 billion more than its rival in the Tuen Mun tender and is worried it might not get that either. 'What kind of message is this to the US investment community?' Mr Aldridge said. Sea-Land bid with Jardines on CT9. Now it is bidding against it on Tuen Mun. Hutchison Whampoa Hutchison International Port Holdings (HPH) has rights to 10 of Hong Kong's 20 container port berths, including one in its own right at the contested CT9. Hutchison's Hong Kong International Terminals operates a further two in a joint venture with Cosco Pacific. Hutchison and Cheung Kong group chairman Li Ka-shing was recently appointed a consultant to Cosco. The Hutchison group also controls many river ports in Guangdong, as well as Shanghai's port. Former stock exchange chairman Charles Lee Yeh-kwong, who is a Hutchison director, also sits on the boards of Henderson and SHKP. Hutchison claims to be far more experienced in the barge and shipping business. Its critics claim it is trying to monopolise the Hong Kong and Pearl River shipping and river port business. Sun Hung Kai Prop The three Kwok brothers, Walter, Thomas and Raymond, at SHKP's helm are aggressively trying to build up the group's infrastructure portfolio, following New World's example, hoping to increase its exposure from 5 to 10 per cent of assets over the next few years. Having won rights to construct the $7.25 billion country parks section of the Route Three highway through the New Territories, the property developer has recently been extending its interests into the freight arena. The Tuen Mun tender is its first venture into the river barge and shipping industry. SHKP had a 65 per cent stake in the consortium that recently won rights to construct and operate the air freight forwarding centre at Chek Lap Kok. SHKP's consortium offered the highest cash sum in the Airport Authority's air freight tender and won the deal. 'We congratulated them on that deal. We didn't complain,' New World's Henry Cheng, one of the losing contenders, said. Henderson chairman Lee Shau-kee is also an SHKP vice-chairman. Woo Po-shing sits on the boards of Henderson and SHKP. Jardines Group Jardine Matheson Holdings and its associate Hongkong Land Holdings teamed up with Sea-Land, New World and SHK Hong Kong Industries when it won rights to two berths at CT9, much to China's disgust. Now Jardines has switched allegiances, teaming up with Hutchison against New World, SHK Hong Kong Industries and Sea-Land in the controversial Tuen Mun tender. It has kept typically quiet throughout this latest dispute. Beijing has said it is not politically acceptable for Jardines to take up its CT9 rights. Instead, it has been suggested it should swap them for berths in other existing container port terminals. To date the other berth operators have been unable to agree on a suitable offer and talks are deadlocked.