Ho Lok-sang argues that the massive Lantau land reclamation plan is a sound investment that will ensure better future for HK

Last week, 38 economists and scholars signed a statement supporting the Hong Kong Special Administrative Region Government's ambitious land reclamation project planned off Lantau Island. I was among those who signed the document, and I wish to explain that these economists and scholars agreed on the need to create a land bank, and that the 1,700-hectare proposal is a good investment in building a better future for Hong Kong. I would like to add that it's not only a good investment for Hong Kong, and that if we fail to build up such a land reserve, our future could be in dire straits and the people's well-being would suffer.

I would like to address the concerns expressed by critics of the plan one by one.

First, some argue that land reclaimed from the sea constitutes a loss of a part of the ocean and that's irreversible. Thus, the reclamation plan tends to undermine our environmental resources and is an affront to the ecological system.

My response is: In and of itself, land reclaimed from the sea reduces the size of the ocean and the habitat for marine species. However, this damage can be offset by efforts to improve the environment. Actually, over the years, Hong Kong has been able to improve our air and water quality because we have the resources to do so. In 2017, a newspaper headline read: "Hong Kong's annual cross-harbor swim race to return to Tsim Sha Tsui after 40 years as water quality improves." This would not have been possible if we did not have the economic resources to clean up the mess we had created. To the extent that more land means better economic development and more economic resources into the future, our conservation effort can be enhanced in many ways.

Second, the reclamation plan may take too long to help alleviate the dire housing needs of Hong Kong people. We should first develop our brownfield sites and convert agricultural land for housing.

Yes, we should work on our brownfield sites, agricultural land and other options too. But, we must not wait until all these alternative land sources have been exhausted before thinking about reclamation. If we do, we'll be caught having no developable land for years and that will translate into higher housing prices, stunted economic development and little space for community amenities like hospitals, homes for the elderly and sports facilities.

Third, the reclamation plan will allow the government to auction land for developers' use. The land prices will still be high, and future housing projects may still be unaffordable.

If the government's land supply is adequate, housing supply will increase. If housing supply increases, the pressure on property prices to go up will be reduced. In the market, the law of supply and demand still rules. That means failing to raise supply must mean escalating prices and growing overcrowdedness.

Fourth, it's projected that Hong Kong's population will peak at around 8.22 million by mid-2043 before starting to decline. There may not be much need then for any dramatic increase in land supply.

Indeed, Hong Kong's population will peak and, therefore, there's no need for us to worry we'll keep encroaching on our environment. Even if we develop some fringe areas of our country parks, our country parks will still occupy close to 40 percent of our land area. But, we do want to build more spacious homes on new land so that households currently living in crammed conditions can look forward to living in bigger homes.

Fifth, some people say the reclamation project will cost over HK$1 trillion, and the cost overrun would eventually exhaust all of our reserves.

But, according to the Development Bureau's preliminary estimates, the cost of reclaiming artificial islands is HK$1,300-1,500 per square foot. Taking the upper rungs of the estimate into consideration, this would translate into HK$275.5 billion - a far cry from the "upward of $1 trillion" claimed by those opposed to the plan. These critics have added infrastructure costs and cost overruns as well. But, infrastructure cost will have to be included in any development plan. There should be no presumption that the infrastructures needed for the reclamation project must be higher than that required elsewhere. Moreover, infrastructures, including roads and railways, are likely to relieve traffic elsewhere through diversion and that would mean cost savings elsewhere. Moreover, with a land bank, the government will be in a stronger position talking to landowners about development, and that means savings.

Finally, some people have asked: Why is that the 38 economists and scholars are not supporting other options as well. The answer is that we want the message to be focused on the most controversial one, and that we all share the same view on this.

The physical shortage of developable land in Hong Kong cannot be dismissed. Singapore is planning to reclaim another 4,600 hectares of land up to 2030. In comparison, Chief Executive Carrie Lam Cheng Yuet-ngor's proposal is much more modest. Our needs to better house our citizens, supply more industrial and commercial land, and provide amenities are crying for decisive, forward-looking action. We cannot afford to wait.

(HK Edition 11/13/2018 page9)