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Tenth Hong Kong container terminal, costing HK$100b, may not be financially viable, consultants say

Prediction of reduced cargo growth from 2020 means HK$100b container project is unlikely to be financially viable, consultants' report says

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Tenth Hong Kong container terminal, costing HK$100b, may not be financially viable, consultants say

A tenth Hong Kong container terminal costing close to HK$100 billion is unlikely to be financially viable, according to a consultancy report due out next month.

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With only modest growth expected in the cargo business for the decade from 2020, it says the government should make better use of the 100,000 hectares of land at the Kwai Chung Container Terminal in Tsing Yi in the short-term.

The government first considered building the proposed new terminal, known as CT10, about 10 years ago. But that was when the cargo business was growing by an average of about 5 per cent annually.

With growth expected to drop to between 1 and 3 per cent from 2020, and with the final bill for CT10 likely to be in the "high tens [of billions]", the project may not be able to attract private investors, two people familiar with the report said.

"It usually takes 10 to 12 per cent in financial returns to justify a private investment," one of the sources said.

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"Even for a government project, we are talking about an economical return of some 4 per cent. I am not sure if CT10 would satisfy either of these."

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