Chief Executive Donald Tsang Yam-kuen says he will substantially increase investment in infrastructure. He promises to push ahead with many projects. But what will the Hong Kong that he wants to shape be like? Mr Tsang worries about competition from across the border. For example, he points out that our ports are losing market share in the cargo business because we can't compete with Shenzhen on pricing. That is due to Hong Kong's higher terminal-handling charges and cross-border trucking costs. There is not much we can do about the former because shipping lines charge customers a uniform terminal-handling fee for the same port: levels are set at global shipping conferences. The larger problem is the trucking issue. Hong Kong cross-border truck drivers have to pay a higher licensing fee than Guangdong drivers, and the current 'drop-and-pick' business model of what our truckers are permitted to do in Guangdong makes haulage highly inefficient. Both problems have to do with arrangements set by the Guangdong authorities. The administration of former chief executive Tung Chee-hwa highlighted these issues in 2004, but there has been little progress on them. Mr Tsang's election platform raises these issues again. But eliminating the licence fee would affect the revenue of the Guangdong government, and changing the trucking business model would require the Guangdong customs authorities to make changes. So only time will tell whether Mr Tsang will be successful. In any case, Hong Kong can't close the port price gap just by building more terminals, bridges or cross-border roads. Yet, Mr Tsang pledges to consider developing container terminal No10 to strengthen Hong Kong's maritime industry. In 2003, Mr Tung said new container terminals and a logistics park might be built on Lantau Island, along with the landing point of a new Hong Kong-Zhuhai-Macau bridge. Recent studies, however, warn that an oversupply in port capacity may be developing, as regional capacity will increase by more than 80 per cent by 2010. Yet Mr Tsang wants to accelerate development plans for Lantau and the bridge. A supply-led mentality pervades political discussions about building more container terminals, cross-border highways and bridges. Planning, conservation and environmental issues take a back seat. Mr Tsang pledges to provide a 'new quality of life', but his election platform shows he is still unable to integrate development and environmental protection. He has not addressed how his vision for Hong Kong's continued expansion as a port and logistics hub would affect air quality. A government-sponsored study shows that harbour transport and other activity is having a serious impact on the health of residents of Kowloon and parts of the New Territories. Yet, his platform focuses only on requiring ferry companies to use cleaner fuel. He needs to devise a 'green port' policy like that of Long Beach, California, so that the maritime and logistics sectors can operate at high environmental standards. Moreover, with Mr Tsang's vision that Hong Kong and Shenzhen should 'jointly develop a world-class metropolis', a clean environment becomes a prerequisite. Mr Tsang revealed his thinking on the development-vs-conservation conflict with the following proposal to resolve it: 'I will advocate a new view of development, which emphasises [the] acceleration of government infrastructure investment to ensure sustainable economic development that, at the same time, takes environmental protection and cultural conservation into consideration.' What he means is: leave it up to the administration to strike the right balance. This shows a 'government-knows-best' attitude, which will exacerbate the frustration - already evident in civil society - that the administration has skewed the balance firmly in favour of unsustainable development. Christine Loh Kung-wai is chief executive of the think-tank Civic Exchange. cloh@civic-exchange.org
