An overseas investor is likely to be the operator of Hong Kong's first central slaughterhouse for chickens under a government plan to reduce the live poultry population. People in the poultry trade said the rising concern over a possible bird flu pandemic and the planned establishment of a new department for food safety has made it more difficult for them to do business. The trade expects 90 per cent of the 147 chicken farms in Hong Kong to go out of business by next year under the government's buy-back scheme. Chief Executive Donald Tsang Yam-kuen announced the setting up of the Food Safety, Inspection and Quarantine Department in his policy speech on Wednesday. Reducing the live chicken population in the city has been the government's long-term strategy to fight bird flu. A government-commissioned study concluded Hong Kong should centralise the slaughtering of chickens to reduce the risk of poultry-transmitted diseases such as bird flu. The report, to be released soon, said new government policies - particularly on centralised slaughtering and the number of market stalls with live chickens to be permitted - would largely determine whether the industry will remain profitable. Director for Food and Environmental Hygiene Gregory Leung Wing-lup said an overseas operator was interested in running the centralised slaughterhouse. 'It will be a private investment and there is no need for taxpayers to bear any cost,' he said. The central slaughterhouse will be set up in the Western wholesale food market on a pilot basis with an estimated set-up cost of about $100 million. If it is successful, more regional slaughtering hubs will be established. Earlier this year, the government launched buy-back schemes for chicken retailers and poultry farms. By last Wednesday, 260 of 814 live poultry stalls at wet markets had surrendered their licences to the government. As of last Monday, 23 of 147 chicken farms, 27 of 42 pigeon farms and two of five duck farms had also surrendered their licences. A spokesman for the New Territories Chicken Breeders' Association, Kwan Wing-kin, said many chicken farmers wanted to quit. 'Our trade has no future. The government is very determined to kill the trade, starting from farms, to wholesalers to retail outlets,' he said. 'Everyone is now concerned about bird flu, and the new department will only impose even stricter control on our trade.' Mr Kwan, who has two farms with more than 100,000 chickens, has decided to join the buy-back scheme. 'We expect that more than 90 per cent of all the chicken farms will surrender their licences,' he said.