Jake's View

Make business travellers pay for new Hong Kong transport links, not taxpayers

Is the convenience of foreign investors really so vital to the city’s prospects that we must build more transport links for them?

PUBLISHED : Wednesday, 14 September, 2016, 6:18pm
UPDATED : Wednesday, 14 September, 2016, 10:44pm

“The key for Hong Kong to continue to attract international investors to come is to build more roads, railways and subways to link up Hong Kong with Macau, Qianhai, Shenzhen and many of the Pearl River Delta cities. International investors would like the idea that they could have breakfast with clients in Hong Kong, then go to Shenzhen for a morning meeting and back to meeting other clients in Macau in the afternoon. It is vital for them to find it easy and quick to travel around the Pearl River Delta cities...” – Richard Vuylsteke, American Chamber of Commerce

SCMP, September 13

I particularly like that bit about “meeting other clients in Macau”. Where precisely would they be meeting, Richard, and for what purpose?

You don’t seriously mean to tell us, do you, that international investors other than casino moguls have real business to conduct in Macau? You do? Oh, please introduce me. That would be the rarest species on earth.

And as to linking up with Qianhai, why should we? Qianhai is a big wide stretch of dirt and mud puddles that a group of deluded speculators likes to bill as the new Hong Kong. Sure thing, fellas, but you still have a teensy-weensy way to go. Why don’t you show us you can do it all on your own. Go on.

Mind you, I can have no real objection to slathering half the New Territories in concrete for yet more road and rail if that is what we really need. It will be otherwise be slathered in concrete anyway for illegal “village house” developments.

But do we really need it? Is the convenience of foreign investors really so vital to our prospects that we must build all these transport links for them?

There is an easy way to find out. First take the budget of any given project, add 50 per cent for cost overruns (roughly the going figure), and then cut the projected usage figures by at least 50 per cent (look at the Stonecutters Bridge if you don’t believe me).

Next assess what each user would have to pay in order for this project to break even after also factoring in operating, maintenance and debt service costs. This will be what we charge. We won’t even ask for a return on investment to the taxpayers.

The chamber’s thinking is that if the taxpayers can be induced to pick up the entire bill for making regional travel easier for its members, well, why not?

I now have a bet for you, Richard. I shall bet the contents of my wallet on any odds you care to name that these transport links would go dead empty from Day 1 and stay that way forever on such financing terms. The prospective users would never think the toll and ticket costs worthwhile.

But I hear you. This is the wrong way of looking at it. My perspective is too narrow. Think of the cascading economic benefits as all the money these people spend moves through the economy. Think of the contributions the new investments will make.

B------t! Sorry, boss, not meant to write that in a family newspaper, I know. Let’s just call it twaddle then. Economic benefits cascade any time that anyone spends money. There is no special manna from heaven element when foreigners do it.

And Hong Kong people are just as good as foreigners in building new industries, better in fact. The record says so.

Most of all, there is no getting away from the simple acid test. If the user does not think the new transport project will so enhance earnings from his investments as to make his additional travel costs worthwhile on a full user pay basis, then the project is not worthwhile, not to him, not to us, not to anyone.

There is no special benefit for which this equation does not account. The project either brings the users more than they pay for it, however they reckon this, or they should spend their money elsewhere.

But of course the chamber’s thinking is that if the taxpayers can be induced to pick up the entire bill for making regional travel easier for its members, well, why not?

And I see their point. Why not if we are fools enough to go along with it?

Which, unfortunately, we largely have been.