Beijing cash puts bridge a step closer
Guangdong to pay the most under new funding model
Construction of the Hong Kong-Macau-Zhuhai Bridge will be able to begin by 2010 after the central government agreed to inject funds to make sure the project does not suffer any more delays, Chief Executive Donald Tsang Yam-kuen said yesterday.
A new funding arrangement will see the cost of building the bridge split between the three regional governments, with Guangdong - after receiving subsidies from the central government - paying the most. However, 58 per cent of the cost will be funded by loans.
The three governments had agreed in February that the 37.45 billion yuan (HK$42.72 billion) project would be tendered out to the private sector under the build-operate-transfer model, with the three governments meeting the funding gap between the construction cost and the private sector investment under a cost-to-benefit principle. Hong Kong would have covered 50.2 per cent of the gap, Guangdong 35.1 per cent and Macau 14.7 per cent.
But under the new funding arrangement, Hong Kong will shoulder 42.9 per cent of the upfront payments, Guangdong and the central government 44.5 per cent and Macau 12.5 per cent. Mr Tsang announced the new plan after meeting Guangdong Governor Huang Huahua at the 11th annual meeting of the Guangdong-Hong Kong Joint Co-operation Conference yesterday.
'The three governments will now be responsible for contributing 42 per cent, or 15.73 billion [yuan], of the bridge's construction cost,' he said. 'We will raise loans for the rest.'
That means Guangdong and Beijing would have to shoulder an upfront payment of 7 billion yuan, Hong Kong 6.75 billion yuan and Macau 1.98 billion yuan.
Veteran commentator Johnny Lau Yui-siu queried whether the switch in the contribution ratios meant Guangdong would assume a controlling stake in the joint-venture company which will be set up by the three governments to oversee the bridge's tendering process, construction and operation.
But a Hong Kong government source said the shareholders' stakes had not been confirmed yet and would be discussed thoroughly over the next few months.
The source said the central government had come to the table out of goodwill to speed up the project - which has been on the drawing board for 25 years. The source said the three governments had abandoned the earlier funding model because the tendering process could cause further delays and they wanted to exert greater control on the setting of tolls.
'Private contractors need to study their rate of return before submitting proposals, and that would have to be based upon car flows and tolls,' the source said. 'But we have not yet come up with a decision on the cross-boundary vehicle quota, which apparently would affect the bridge's utilisation.'
A report submitted to the Legislative Council earlier projected the bridge would attract 14,000 vehicles a day at most with a toll of HK$150 if the quota system was not relaxed.
Each government will be responsible for the cost of connecting roads and border-crossing facilities to the bridge within their boundaries. In Hong Kong that would amount to another 2 billion yuan.
A government source expected the 29.9km, dual three-lane bridge to be completed by 2016. It is expected to bring significant advantage to the region by speeding up cargo flows and boosting tourism.