Project is put on hold to ease pressure on city as shipping hub, officials say The central government appears to be slowing the expansion of port facilities in Shenzhen as they are increasingly challenging Hong Kong's status as the region's key maritime hub, sources have told the South China Morning Post. The construction of a new facility in Dachan Bay, on the western side of Shenzhen near two existing facilities at Chiwan and Shekou, will be delayed by two to three years, according to a mainland port executive. 'The authorities may be afraid the new facility will add pressure on Hong Kong,' the executive said. 'Instead of being operational in 2008, the project will probably be in place in 2010.' The delay was confirmed by an official with the Shenzhen government. Both sources did not wish to be named. The official said preparation work such as land reclamation and design had begun for the project, a joint venture between China Merchants and Hong Kong's Modern Terminals Limited (MTL). But it is still awaiting approval from the National Development and Reform Commission. The official said it appeared the central government wanted to delay Dachan's development to ease the pressure on Hong Kong's port facilities, especially at such a sensitive time for the Tung administration. 'Beijing will look at the Pearl River Delta as a whole in planning port developments in the region. The authorities will set the priorities of what to develop first,' the official said. Construction of Yantian's Phase IIIB, on the east side of the delta, is also pending approval. The National Development and Reform Commission yesterday referred questions to the Hong Kong and Macau Liaison Office, but a liaison office spokesman declined to be interviewed. Erik Bogh Christensen, MTL's managing director, said he had not heard of the Dachan delay. But he said he believed any decision would be based on market forces. 'Container throughput in the delta will increase by 2 to 3 million teu (20-foot equivalent units) a year and we need a lot more terminals to handle the volume,' he said. 'Hong Kong will get a share of the growth and I think the central government recognises that.' MTL signed a letter of intent at the beginning of this year with the Shenzhen authorities to develop the four phases of Dachan Bay. But it is clear that the government of the special economic zone has recently been trying to play down the strong growth of its ports' business, even to the point of not releasing last month's data for container throughput. This came after the significant rise of the previous month, when 1.03 million containers were handled - exceeding the throughput at Hong Kong's main terminals for the first time. Hong Kong's share of handling southern China's manufactured goods has dropped sharply since 1997, when it controlled 91 per cent of ocean-going box cargo. It will be lucky to handle 60 per cent of the region's projected 24 million deep-sea boxes this year. The Legislative Council passed a motion last week urging the government to press shipping lines to lower their terminal handling charges as shippers and freight forwarders continue to turn in droves to facilities in Shenzhen. At present, charges in Hong Kong are on average about US$100 higher for each 40-ft container. Analysts said they expected cargo volume to continue to flow to Shenzhen as more capacity came on line.