Hong Kong's container terminal charges, long criticised by shippers as being among the highest in the world, will fall with the introduction of Container Terminal Nine, the head of a government advisory body said. Port Development Board secretary Richard Yuen Ming-fai said he expected the introduction of the three million teu (20-foot equivalent units) capacity of CT9 to result in a slight fall in terminal handling charges. 'We expect that the new facility will bring in keener competition, so we hope that terminal handling charges will fall a little bit,' he said. 'It will help the shippers, but it won't hurt the operators, because it will be made up by increased volume.' A port operator source denied that the added capacity of the new terminal would lead to lower charges, because of the cost of maintaining the excess capacity, if demand remained sluggish. Analysts said Hongkong International Terminals (HIT) and Modern Terminals (MTL), Hong Kong's two biggest port operators, had profited from a lack of competition. Both operators are working with excess capacity of more than 1.5 million teus. The source denied that charges were too high. 'Anecdotal evidence suggests that the charges are not affecting growth. Nobody would use the port if they were not making money,' he said. Shippers unwilling to pay the terminal handling charges must use the more time-consuming midstream operators, but, because the handling charges are a relatively small part of total shipping costs, shippers often prefer the convenience of the terminal operations. Mr Yuen said the Government had received complaints from shippers about the high level of Hong Kong's terminal charges. He said lower terminal charges would be good for Hong Kong as, at present, they were 'on the high side'. 'We want to see more competitive terminal tariffs,' he said. He said, however, that Hong Kong's ports did not benefit from government subsidies like most other foreign ports, which were under state control. The PDB advises the Government on port development in Hong Kong. Mr Yuen said talks on CT10, to be built on the north side of Lantau Island, would not start for several years. 'We don't expect CT10 to be required before the completion of CT9,' Mr Yuen said. The Government and port operators have made a tentative agreement that CT9's first berth will be operating before the end of 2001, with the last berth brought into operation in 2004. Mr Yuen said the Government would be paid a 'fair' premium for the CT9 terminal. The $2 billion land premium paid for the CT8 terminal could not be compared with CT9, because the latter was far more complex and involved dredging worth more than $500 million, which would be borne solely by the developers. He said the Asian economic turmoil had been a factor in the land premium negotiations. Mr Yuen had received assurances from senior MTL and HIT executives that they were committed to a 2001 start date for the first berth. This is despite reports that an escape clause has been built into the developers' contract with the Government, allowing the possibility of a delay if economic conditions deteriorated further.