Infrastructure needs will continue to be met as deficit tackled

I am writing to respond to Jake van der Kamp's Monitor column published in your Business 2 section on February 22.

When Chief Executive Tung Chee-hwa met the media on February 20 to talk about our plans for infrastructure developments and the forecast expenditure of $600 billion, Mr Tung emphasised that the bulk of the investments would be made over the next 10 years or so. About one-third of this amount ($200 billion) would be expended by the two railway corporations in bringing the various railway extensions to fruition. Government projects would constitute the remaining $400 billion. Depending on the progress of various works projects, the Government spends about $25 billion to $30 billion per annum on capital works.

Most of the Government's works projects are to meet the needs of our economy and to enable its further growth. For example, the economy of Hong Kong needs quality manpower. Therefore many works projects are related to education, such as primary and secondary schools. Another example is those projects undertaken by the Government to facilitate the flow of goods and people between Hong Kong and the mainland.

Those projects are very important for the development of our logistics, tourism and other industries. They should be proceeded with as quickly as possible to facilitate the further development of our economy.

We are, of course, fully alive to the challenge of the structural deficit. The Task Force on Review of Public Finances has issued a comprehensive report on this. It is true that the Government's land sales revenue has reduced significantly. The implications of this have been taken fully into account in the task force report.

However, the point which the Chief Executive has emphasised is that we are confident that we will be able to deal with the deficit in the next five years and that resources will continue to be made available for infrastructure developments.