Challenges faced by Hong Kong as a maritime and logistics centre

LCQ9:ChallengesfacedbyHongKongasamaritimeandlogistics
centre
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Following is a question by the Hon Mrs Regina Ip and a
written reply by the Secretary for Transport and Housing, Ms
Eva Cheng, at the Legislative Council meeting today (June 10):
Question:
According to several items of statistical information,
eight of the world's top 10 ports with the highest container
throughput are in Asia, which are Singapore, Shanghai, Hong
Kong, Shenzhen, Busan, Guangzhou, Ningbo-Zhoushan and
Qingdao, in descending order of throughput ranking. The
consolidated container throughput of Shanghai and that of the
Pearl River Delta (PRD) (i.e. Shenzhen and Guangzhou) soared
by 148% and 142% respectively in 2008 as compared to those
in 2003, while that of Hong Kong rose by 20% only. There have
been comments that with the rapid growth of the mainland
economy in recent years, the demand for inbound and outbound
freightservicesisenormous,butHongKonghasfailed toseize
the opportunity to acquire abigger market share. In addition,
the State Council has recently approved the plan to develop
Shanghai as an international shipping centre. Hence Hong
Kong's position as a maritime and logistics centre is facing
increasingly tough challenges. In this connection, will the
Government inform this Council:
(a) how Hong Kong will compete with the other container ports
in the PRD region;
(b) whetheritwillinjectresourcestoconstructalogistics
park to consolidate Hong Kong's position as an ideal import
and export centre for critical parts (such as high-tech
proprietary products); and
(c) given that the container port industries of Hong Kong's

neighbouring regions are booming, whether the Government has,
in the light of the latest assessment, changed its position
that it is necessary to build Container Terminal No. 10, and
when the Government will make adecision, in order not to delay
or affect the development of southwest Tsing Yi
Reply:
President,
(a) The Hong Kong and Pearl River Delta (PRD) ports serve
the same cargo hinterland. Having regard to the Outline of
the Plan for the Reform and Development of the Pearl River
Delta (2008-2020), we will endeavour to push ahead with the
co-ordinationinportdevelopmentbetweenthetwoplaces,such
that a clear division of work and positioning will benefit
both and wasteful duplication of resources could be avoided.
Yet amid co-ordination between Hong Kong and the PRD ports,
there is also competition.
Despite the proliferation of port facilities in the PRD,
some of the PRD cargoes still choose to route through Hong
Kong due to our comprehensive and frequent liner shipping
schedules, free port status, efficient customs procedures,
and convenience in intermodal transport system. In the course
of maintaining our competitive advantages in these aspects,
we will strengthen the competitiveness of Hong Kong Port (HKP)
by ensuring that the necessary port and related facilities
would be provided in a timely manner. These include
feasibility study for the development of Container Terminal
10(CT10)atSouthwestTsingYi,and takingforwardtheproject
in dredging the Kwai Tsing Container Basin and its approach
to cater for the next generation of container ships. We will
also strive to lower the cost for the movement of cargoes
between Hong Kong and the PRD.
(b) Mainland is posing keen competition to us with its
certain competitive advantages, for example, in cost.

Moreover, as a result of the global financial crisis, there
has been a significant drop in the trading and freight
activities worldwide. Our logistics sector, like their
counterparts in other economies and other industries, are
operating in a very difficult business environment.
In the face of the challenges, Hong Kong should expand
its cargo hinterland and sharpen its competitive advantages
in providing tailor-made logistics services and solutions to
complicated tasks. On the hardware, for example, the
construction of the strategically important Hong
Kong-Zhuhai-Macao Bridge would soon commence. We shall also
work closely with the Mainland authority on the macro level
to achieve better division of work, reasonable layout and
complementarities in port and airport development.
In view of the uncertain global economic situation, the
Government has to take into account Hong Kong's and the global
economic trend and outlook in deciding on the way forward for
the Lantau Logistics Park, including the scale and timing of
the proposed development. This is to make sure that public
resources are used in a cost-effective way in the development
of the logistics sector. In parallel, we would continue to
make available more land for both long-term and short-term
logistics use as far as possible. We shall also continue to
work closely with the sector to promote e-logistics and to
provide professional training courses to the industry to
enhance the efficiency and competitiveness of our services.
(c) The Study on Hong Kong Port Cargo Forecasts 2005/2006,
whichwasreleasedlastyear,hastakenintoaccountthesupply
of port facilities in South China. It projects that the total
container throughput of HKP would continue to have modest and
steady growth. It also expects that Hong Kong will need the
first new container berth by 2015 at the earliest. As advance
works would have to be undertaken for developing a new
container terminal and it would take time to comply with the
statutory requirements, we have expedited the study on the

feasibility of developing CT10 at Southwest Tsing Yi.
The relevant preliminary feasibility study and
environmental impact assessment commenced in March 2009 and
arescheduledforcompletioninearly2011.TheAdministration
will conduct consultation on the development programme and
site selection based on the findings and recommendations of
the study. As the development of a new container terminal
requires long lead time, in the course of the study, the
Administration will in parallel monitor the changes in Hong
Kong cargo throughput, with a view to working out the optimal
timing for providing the new berths.
Ends/Wednesday, June 10, 2009