Reclamation plan hailed as feasible and cost-effective

The government's "Lantau Tomorrow Vision" reclamation proposal is an optimized development plan in terms of cost and investment returns, 38 prominent Hong Kong economists said in a joint statement on Tuesday.

The signatories convened amid a heated debate on whether the planned 1,700-hectare project off the east coast of Lantau Island is an affordable and viable solution to the city's serious land shortage. This was after Chief Executive Carrie Lam Cheng Yuet-ngor discussed the ambitious plan in her second Policy Address on Oct 10.

The 38 economists, mainly from leading local universities, said they understood the public's mistrust of massive infrastructure projects - as some of them faced cost overruns or mismanagement.

However, there have been much unreasonable and emotional opposition to the proposal, and some have even been politicized, they said.

Among those issues was a query about its cost-effectiveness. The 38-strong academic group, which included Richard Wong Yue-chim, professor of economics at the University of Hong Kong, Sung Yun-wing, adjunct professor at the Department of Economics at the Chinese University of Hong Kong, and Hong Kong University of Science and Technology economics professor Francis Lui Ting-ming, analyzed this issue.

According to government projections, the land reclamation project will cost some HK$500-600 billion. In terms of the special administrative region government's fiscal revenue on the 1,700-hectare reclamation, the economists say conservative estimates on the revenue from land sales alone can reach HK$840 billion. This does not include the tax revenue and other social benefits coming from the commercial activities on the new land.

Compared with developing land in the New Territories, land reclamation in Lantau is even more cost-effective, the statement said.

According to the preliminary estimates of the Development Bureau, the cost of reclamation of artificial islands is HK$1,300-1,500 per square foot. This is lower than those of brownfield sites or agricultural land in the New Territories, which stand at HK$1,700 per sq ft. The estimation is based on the government's latest acquisition price and also includes a 25-percent subsidy for the loss of crops and so forth, according to the statement.

The economists also pointed out that potentially available land in the New Territories is generally around 30 kilometers from the city center. This requires higher costs on new transport infrastructure - as existing ones are already saturated during peak hours.

But one of the planned artificial islands near Kau Yi Chau is just 4 kilometers away, at its closest point, to Hong Kong Island, the statement said.

The economists said the cost of land reclamations, transport infrastructure and intangible social costs - such as the impact on the environment - were all taken into consideration.

Based on past practices, the SAR government will conduct a strict environmental evaluation before undertaking any reclamation work.

The economists argue that it is much easier to realize comprehensive plans on brand-new artificial islands than on existing land, because it is easier to meet people's demands regarding environmental protection, low carbon use and smart city development.

heshusi@chinadailyhk.com

(HK Edition 11/07/2018 page6)