It is early morning in 2019 and the sun is rising on Penny's Bay, planned site of the Disney theme park. As it gets light, the sun reveals . . . thousands of shipping containers. Until six months ago, this was the Government's vision for Lantau's Penny's Bay: a site for massive port expansion, guaranteeing the growth of the port which now accounts for nearly 22 per cent of the workforce, according to government figures. This is the hidden, extra cost of Disney: giving up a piece of precious land in a lease that, at possibly a century in length, would make it the most permanent land use in Hong Kong. With a piece of land the size of Wan Chai and Causeway Bay combined and billions to spend, is Mickey Mouse the best choice? The South China Morning Post has learned that the Government, too, has asked this question. In a study named the Northshore Lantau Development Feasibility Study, three competing visions of Penny's Bay were matched against one another: A theme park that would scoop in extra tourists and their foreign currency; A massive expansion of the port, a backbone of the Hong Kong economy for decades; and A 'fourth-generation new town', learning all the lessons of previous new towns, creating homes for thousands and helping deflate any future property bubble. However, even though this study has been completed and a decision taken, the Government has decided to withhold this comparative data until the middle of next year - by which time Disney will be almost certainly be safely signed. Yet despite the lack of government figures, there are some who believe that any Disney deal must be done with a more careful eye on the options that are being ruled out. Among them is Dr Ted Pryor, a consultant who was previously a senior civil servant with decades of local planning experience. He says: 'China is still an emerging economy and needs a lot of ports along its coast. We should take a cautious view on things like this.' Another use now ruled out is housing. With options for housing shrinking as the mood shifts from harbour reclamation, Dr Pryor asks whether the Government can be sure it can meet housing demand in the medium term. 'If these issue are not addressed we are going to have another property boom, speculation and another crisis on our hands in 10 years' time.' The five options detailed here have been compiled from previous government studies and work by economists since the Disney announcement. Without access to government resources they are not truly comparable: for instance, the figures for port development are in 1993 prices, while Disney is calculated at 1999 prices. Easiest to measure is the impact of lost opportunities on the port, which has been subject to dozens of government studies and an environmental impact assessment. The port contributes 20 per cent of Hong Kong's economic activity. Tourism, according to government figures, contributes four per cent, to which Disney would add 0.4 per cent. To cater for forecast traffic growth, a plan was hatched in the 1980s for two container terminals to be built on a reclaimed Penny's Bay and two more on two large artificial islands in the sea in front of the bay, which would also host a new Macau ferry terminal. Marine services and a large business park would create extra jobs. Now, the Magic Kingdom will be situated on the land previously to be used for Container Terminals 10 and 11, and the terminals to be built in front of the bay near Peng Chau are expected to be ruled out, too, because the cranes would be visible from the park. In effect, all plans for port expansion have been cancelled at a stroke. Roger Tupper, deputy secretary of the Port and Maritime Board, says studies will begin next year on whether growth could be catered for in Tuen Mun. 'It's not urgent. We've only just started work on Container Terminal 9,' he says. However the water route to Tuen Mun is shallow at low tide. Dredging, mostly in mainland water, would be needed. Neil Russell, chairman of the Hong Kong Liner Shipping Association, which represents the shipping lines, says the industry is not too concerned about the loss of Lantau ports as the new terminal means capacity should be adequate until at least 2005 and he is confident the Government wants to support shipping. But he adds: 'I'm not aware of any study being done on port facilities in Tuen Mun.' The picture emerging from recent Legislative Council discussions with economists was that the Disney park would allow Hong Kong to tap into the rising wealth of the South China middle classes. It would also be a diversification of the economic base. Unlike, say, the port, it would not be affected by a major slowdown in the US economy. And the work can start now, bringing an immediate economic effect. Professor Liu Pak-wai, vice-chancellor of Chinese University, says: 'If you build a port then estimating the growth is difficult. It's not definite you will need the port facilities at that time. But if you build a Disneyland you will start earning in 2005.' Professor Liu prefers to measure Disney against something more concrete - property development. His estimates are the basis for option three: selling the Disney site to private developers. He says the location would not be attractive for high-rise blocks, so he assumes an overall plot ratio of three, producing about 42 million square feet of low- to medium-density accommodation, about 85,000 flats of 500 square feet. Assuming a sale price of $3,000 a square foot at today's prices, the added value to the economy would be about $125 billion - less than the $148 billion estimated for Disney under the projections the Government says are most realistic. 'The differential is not that large. Definitely the property development is not superior,' Professor Liu says. In addition, property developments mean importing materials. In contrast, a Hong Kong Disneyland would bring foreign exchange into Hong Kong. These factors, Professor Liu says, mean that even doubling the plot ratio would not make the property development better than Disney overall. This is why, despite the risks, he says: 'I think it is a good project.' But the Government's own alternative is much more radical than Professor Liu's. The Government was studying a 'fourth-generation new town' on the site, a completely new city learning from previous urban developments. If such a town was built to the levels of Tseung Kwan O, with 40-storey blocks, the Government gets a double benefit: not only more flats, but by creating an urban centre each flat becomes worth more. Using the figures for Phase Two of Tseung Kwan O, the most recent high-density new town, about 240,000 people in 75,000 flats could be accommodated with substantial commercial and retail zones, even allowing space for schools, parks and other community facilities. Putting aside a third for public housing would slash waiting lists, while selling off the rest should still easily reap $25 billion if the Government could achieve $1,000 of land premium per square foot, the middle of today's price range. Selling the land for housing would also ease government fears that Hong Kong is losing long-term housing options. With the mood turning against harbour reclamation, the schedule of possible major new developments, which currently foresees a potential for 1.5 million extra people, is shrinking while the population is rising. Exco member Leung Chun-ying expressed concern on this topic at a speech two weeks ago to the Hong Kong Institute of Planners - but did not have any easy answers. But perhaps the most intriguing alternative was floated in Legco last week by Chinese University's Professor Kwong Kai-sun. The Government intends to raise the quota for mainland visitors when the park opens. He asked: why not simply raise the quota and leave Penny's Bay as a natural bay as it is today? At present the quota is 1,500 people per day and on average this year a third of permits have not been taken up. But local travel agents have long said that if they could compete against the four mainland agents they could offer more attractive packages and boost numbers. Professor Kwong says some of the economic benefit would come from lifting the quota, not from the park itself. If filled, the extra quota would bring in $2 billion a year - more than 20 per cent of the Disney benefits without the Government spending one dollar. Of course, simply raising the quota for mainland tourists would not have generated the 'feel-good' effect the Government seeks or photo-opportunities for senior officials. Neither would it be a positive signal to international investors, who would see Disney's investment as a long-term vote of confidence in Hong Kong. Ironically, government port studies for Penny's Bay of the mid-1990s contain much of the same language as today's Disney sales pitch. At $54 billion the port development is expensive, and only mildly profitable because like Disney the port operators do not pay top market rate for their land. But the Government wanted to push ahead for the spin-off economic benefits. However, forecasts of port traffic have been cut, and if the project was built now it would lie empty for years. Professor Kwong points out that the Disney project, too, is reliant on a core projection - the number of people on the mainland, particularly in the Pearl River Delta, who are prepared to pay a big premium to visit a Disney in Hong Kong. If they want a non-Disney park they have a choice of five professionally managed theme parks in Shenzhen Bay alone. One way to clarify whether Disney is the best option would be to do market research on the preference of South China's middle classes, to verify market potential. But even though it is now ready to spend $16.85 billion on the Disney park option - an investment of more than $25,000 per Hong Kong resident - no market research has been done. 'I don't know how receptive the people in Guangdong province are to American culture,' says Professor Kwong. 'The Government assumes they are very receptive and very enthusiastic. I have some doubts.' HOW MICKEY MOUSE MEASURES UP TO THE ALTERNATIVES OPTION 1 Disneyland and other theme park development. Reclamation of Penny's Bay to create 280 ha site, with 126 ha Disney park. Other development tourism-related Total cost: at least $27.7 billion. Cash cost to taxpayer: $16.85 billion. Direct jobs created on completion of phase one: 10783 OPTION 2 Massive port expansion with business/science park Reclamation of Penny's Bay and major reclamation in Western Harbour to wxpand port by as much as 70 per cent. Additional marine facilities such as marine service support area. Also 71 ha of land for business or science park and road link along the coast to Discovery Bay. Total cost $54 billion Cast cost to taxpayer: cash profit of $4.5 billion due to land sales and port rental. Direct jobs created on completion: 25704 (12000 in business park) OPTION 3 Penny's Bay Housing Development Reclamation same as Option 1. Auction Disney site of 126 ha for low-to medium density housing by sections at a plot ratio of 3. Cast cost to taxpayer: similar to Option 1 but receives one-off cash windfall from land sales that should reach about $20 billion Jobs created on completion: relatively few. OPTION 4 Lantau Dormitory City Reclamation same as Option 1 with entire area given over to high-density housing for 240000 people. Development at the levels of Tseung Kwan O Cash cost to taxpayer: more than $4 billion for reclamation and services, but if two-thirds of flats are built by developers land premium should top $25 billion. Jobs created on completion: shops, offices, community facilities would create jobs but difficult to forecast OPTION 5 NO DEVELOPEMENT, EXTRA PERMITS Leave Penny's Bay unchanged and do not build theme park. But raise the quota for mainland tourists coming to Hong kong by 2400 a day, the level planned if the park was to open. Total cost/cash to taxpayer: nil Jobs created: depends on how the new tourists spend their money. But if half the additional permits are taken up the extra visitors would spend $1 billion a year.