There's not much jumping for joy in Hong Kong's Kwai Chung container port following Financial Secretary John Tsang's announcement in his budget speech that Container Terminal 10 (CT 10) was back in vogue.
Tsang said container throughput would continue to increase after last year's 24 million TEUs and the government had identified two sites to meet the increasing demand.
"Extensive reclamation is required for the site at Northwest Lantau, which may affect the ecological environment. Consequently, the government will study the other site at Southwest Tsing Yi," he said. "Although this site will require the relocation of the existing oil depot, it can achieve synergy with the container terminals in Kwai Chung and Tsing Yi."
But Alan Lee, chairman of the Hong Kong Container Terminal Operators' Association, said what the terminals really needed was more off-port land.
"If the terminal operators can get more land, the terminals will be more efficient, and this will be more cost effective than building a new terminal," Lee said.
Jonathan Beard, managing director of consultants GHK, said the government was allocating land in the port for logistics uses, which was an inefficient use of scarce land resources.
"The only place you can give additional land to the terminals is in Kwai Chung port," he said. "There is plenty of land for logistics facilities elsewhere."
Lee said the terminals had been "fighting" with the government for a long time over additional yard space.
"The government wants the land for logistics purposes so we have to bid at the auctions against logistics operators and property developers who want to build warehouses. That pushes the price way up. We just want the land for stacking boxes."
The battle for yard space has been a long running one for the terminal operators. Way back in March 2004, GHK compiled the Hong Kong Port Masterplan 2020 that took a close look at the port's strategy over the following two decades.
One of the study's medium term priorities (two to five years) focused on something called the Power Port Initiative (PPI). It found that Kwai Chung port was constrained by landside capacity and not by quay frontage. It recommended the allocation of off-port land areas to terminal operators on long-term leases to use as container yards that would enhance the main terminal operations and throughput capacity. Four years later, the terminals are still fighting for land.
The Southwest Tsing Yi site proposed for CT10 is home to oil terminals, and the government is in favour of shifting the oil facilities to new locations within the territory. This radically increases the costs of building CT10 at Tsing Yi, according to the master plan.
However, if CT10 did go ahead, Lee said Tsing Yi was a far better option than the other proposed site at Northwest Lantau.
"A Lantau terminal will split the port operations. There will be a lot of containers moving between Kwai Chung and Lantau and this will make everything more expensive. At least Tsing Yi is close by."
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