1 New terminal 'needed at port by 2015' Government to press ahead with CT10 despite industry opposition
Denise Hung, SCMP 14 April 2008

The government is pressing ahead with plans for a 10th container terminal, in southwest Tsing Yi, backed by a study it says shows that Hong Kong needs another terminal by 2015.

New players may also be brought in to run the terminal - to boost competition and lower costs, a government source said.

Proposals for Container Terminal 10 (CT10) have been on the drawing board for years, but face opposition from port operators, including Li Ka-shing, who say a new terminal is not needed as more container traffic moves to cheaper mainland ports.

Financial Secretary John Tsang Chun-wah revealed that southwest Tsing Yi had been chosen for the site of the terminal - over northern Lantau, for environmental reasons - during his budget speech in February.

The government source said construction of CT10 was needed to boost and maintain Hong Kong's cargo port competitiveness.

A decision was yet to be made on the model for financing, building and operating the terminal, however.

"The government will consider all operation models to attract potential players, including newcomers, to run the 10th container terminal," the source said. Shipping companies would be considered as potential terminal operators.

Hong Kong port's total container throughput has grown by an average of 3 per cent a year in the past three years and reached a high of 24 million TEUs [20ft equivalent units] last year.

A Transport and Housing Bureau spokesman said a Port Cargo Forecasts study, which looks at port facilities in southern China and projects Hong Kong's cargo growth through to 2030, pointed to an increase in throughput at Hong Kong port.

"On this basis, it is estimated that Hong Kong will need a new container berth by 2015," the spokesman said.

The report will be released soon.

Development of the logistics and cargo industry was important because it underpinned economic growth and provided more than 210,000 low-skilled jobs, a government official said.

Hong Kong's nine terminals are run by five operators - Modern Terminals, Hong Kong International Terminals (HIT), COSCO-HIT, DP World and Asia Container Terminals.

Hutchison Whampoa chairman Mr Li opposes the government's plan, last month saying a new terminal would not be needed for at least 20 years. Mr Li predicted Shenzhen would surpass Hong Kong as the world's third-busiest port within four years.

Transport chief Eva Cheng said the tycoon's remarks showed a lack of long-term planning.

But Hong Kong Container Terminal Operators Association, which represents the port's major players, including Mr Li's HIT, said the government's priorities were confused - it was increasing supply before there was demand.

"The 24 berths in Kwai Chung terminal handled only 17 million TEUs from ocean vessels last year, far short of its maximum capacity of 25 to 27 million TEUs," association chairman Alan Lee Yiu-kwong said. "Like Mr Li said, we won't need a new terminal for the next 20 years."

He also dismissed the government's stated intention of bringing down terminal operating costs, saying operators' profit margins had been thinning over the years.

Port operators and shipping companies have been blamed for Hong Kong's shrinking competitiveness in port cargo transport because their charges per container are US$100 higher than those on the mainland