A land rezoning exercise at the Kwai Chung Container Terminal is likely to spark competition for valuable sites among stakeholders and threatens to wipe out the losers.
As Shenzhen steps up its efforts to supplant Hong Kong as the region's transhipment hub, the five local port operators -including Hutchison Whampoa's Hongkong International Terminals and Wharf's Modern Terminals-have also stepped up their lobbying for more back-up land at Tsing Yi in order to become more efficient, reported the South China Morning Post.
While more than 100,000 hectares of scattered land parcels around the port open for bidding periodically, port operators said the leasing periods of the sites-some as short as three years- had made it impossible for them to spend the millions of dollars of needed to turn them into proper storage areas.
"The surfacing works for an area of between eight and 10 hectares would cost US$12.9 million. How is such an investment justified if we can only use the site for three years?" said Gerry Yim, the managing director of HIT.
The Hong Kong Container Terminal Operators' Association, which acts on behalf of the operators, has demanded the government extend the tenancy period of those plots to 10 years.
But Mark Chan Wai-chung, who represents small operators of container depots that store empty or loaded boxes at a cheaper rate than the port, said that could jeopardise their livelihood.
"We can't compete with these big players. We could be driven out of business if we can't find land to stack containers for our clients," he said.
Many such depots are located in places with cheaper rents like Lau Fau Shan and Hung Shui Kiu, but a government plan to develop Hung Shui Kiu means up to 140 hectares of storage area will be lost. Chan said the government had so far pledged to provide only 60 hectares in return.
"We may have to come back to Kwai Chung if there is not enough land out there, but what can we do if even the cheaper sites there are gone by then," he said.
Small operators can survive on shorter leases because the preparation cost of their depot sites is at least 30 percent lower than that of port operators due to the different standards required.
The Transport and Housing Bureau said it was still studying the association's proposal, with one official saying it would take some time to balance the interests of all the stakeholders involved, including truck drivers who now park their vehicles on such sites.
Alan Lee, the chairman of the association, said additional backup land and quays were essential to shorten the queuing time for vessels.
Lee said some barges had to wait for two days before the port had space to clear them, and that put Hong Kong at great disadvantage to Shenzhen, whose ports had ample space.
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