The Court of Final Appeal's decision to uphold the position of the government and restrict the River Trade Terminal (RTT) to serving vessels that ply the river trade brings to an end a six-year saga on Hong Kong's waterfront. But it may also have shattered what little hope the RTT management had left of achieving the government's mandates when the project was offered up for tender in 1996: to ensure that Hong Kong remains the region's river-trade hub, lessen congestion in the harbour and its access points, and help minimise the environmental impact of the port's commercial activities. While the decision defends the commercial interests of the main terminal operators, it also keeps more trucks on the road and more traffic in the harbour and through the increasingly dangerous Ma Wan access channel from southern China to the port. The court held the RTT to the letter of its contractual obligations, but that may have come at the cost of the public good. Despite the promise of being dedicated to the port's fastest-growing trade sector, the RTT has bled red ink since opening its doors in 1998. Weighed down by false expectations about the commercial environment in which it would operate, sky-high land premiums and shareholders who can kindly be described as at cross-purposes, it has incurred huge losses, perhaps in the billions. Its shareholders - which in 1996 comprised original members Jardine Matheson, Sun Hung Kai Properties, Hongkong International Terminals, Cosco Pacific and Bank of China (International) - paid a $1.14 billion land premium for the site's 65 hectares at the height of the market. By the time they were finished building its 49 berths, the bill was $6.5 billion. Those overhead costs would have been manageable if the vibrant commercial era that preceded the handover had lingered. But it faded, as did the government's appetite to close down the public cargo working areas (PCWA), the RTT's most direct competitors. 'We are in competition with the PCWAs and the river trade is a very low margin business,' RTT managing director Paul Wong Hok-leung told the South China Morning Post last month. Management was under the impression the PCWAs would be closed when it agreed to take on the RTT's considerable debt. But that wasn't management's biggest miscalculation: it was assumed that the main terminals would remain capacity-constrained. The opposite proved true. The ports in Shenzhen began siphoning off a substantial share of the main terminals' business at the turn of the century. Tired of the constant cash calls to service the RTT's mounting debt, Bank of China and Cosco Pacific cut their losses shortly after. Worse still for the RTT, when the port's container growth faded and CT9 came on stream last year, it forced the main operators into the river trade to fill their under-utilised wharves. The main operators in Kwai Chung handled about 2.1 million boxes of river trade last year, up almost 50 per cent year on year. The RTT's shareholders have always been a curious mixture of equity investors, port operators and a giant of the commercial real estate sector. Insiders say their agendas for the RTT have been as disparate as their core businesses. While Hutchison undoubtedly would like to see the RTT make money, it is not thought to be prepared to have that happen at the expense of its main terminals' business, where profit margins are considerably higher. According to insiders, Hutchison was keen to stop RTT management from taking the government to court for the right to handle deep-sea trade. Maybe Hutchison's lawyers saw the futility of the RTT's case, or maybe they were afraid the RTT would win. The first round of legal wrangling - at the Court of First Appeal - alone cost RTT shareholders 'several million dollars', legal sources said at the time. Asked if the conflicting agendas of the shareholders contributed to the RTT's woes, Mr Wong, who took the company's helm in October, said: 'We have good communication. I still find myself pretty free to do what I want to do. The responsibility of the shareholder is to provide capital. I don't blame the shareholder if he doesn't give me business.' He also said that if the court found against the RTT, he was confident the terminal 'could still operate on a break-even basis'. Yesterday's decision is destined to test that theory ... and the depth of the remaining shareholders' pockets. Case closed RTT's long and winding route to the Court of Final Appeal March 1996: RTT wins government tender Oct 1998: RTT begins operations Sept 1999: RTT says it wants to service ocean-going vessels; government objects Sept 2001: RTT initiates ocean-going services Nov 2002: Government launches court action May 2003: RTT prevails in High Court June 2004: Court of Appeal overturns High Court ruling Oct 2004: RTT long-serving managing director John Wan Hak-chung, of Jardine Matheson replaced by Sun Hung Kai's Paul Wong Hok-leung March 2005: Court of Final Appeal shuts the door on RTT Outflows: RTT's estimated minimum losses since opening losses since opening 1998: $50 million (three months) * 1999: $200 million * 2000: $300 million * 2001: no estimate available 2002: $250 million ** 2003: $200 million ** 2004: no estimate available Volume of goods moved by river to Hong Kong in 2004: 6.5 million 20-ft equivalent units, up 10% on 2003 *** Volume handled by RTT in 2004: 2.6 million teu * RTT ** Shareholder provisions *** Port and Maritime Board