Hong Kong will break even on a controversial 1,700-hectare reclamation project off Lantau Island within 20 years and could make trillions of dollars from the deal, a member of a government-friendly think tank has claimed.
Kaizer Lau Ping-cheung, a former surveyor and lawmaker, and now a consultant with former chief executive Tung Chee-hwa’s Our Hong Kong Foundation, said land reclamation was necessary and, if anything, the 1,700 hectares proposed by Chief Executive Carrie Lam Cheng Yuet-ngor in her policy address was too little.
“Since we’re going to be spending that much money anyway, the more we build, the greater the cost-effectiveness,” Lau said on Monday.
Those opposing Lam’s “Lantau Tomorrow Vision” believe the scheme will come at high environmental and economic costs – conservative estimates put the price tag at about HK$500 billion (US$63.8 billion), roughly half of the city’s fiscal reserves, while others put it closer to HK$1 trillion.
It has also raised concerns of becoming a white elephant, not least because Hong Kong’s population is set to peak around 2040.
“If we only talk about the costs but not the returns, of course, it will seem frightening,” said Lau, who also staunchly supported developing land in the city’s protected country parks. “Plus, we’re doing it in phases, over 14 or 15 years.”
Lau said that based on potential land sales for residential development – assuming that one in every five square metres could be developed, sold at HK$10,000 per square foot and with a 70/30 split between public and private housing – plus commercial and industrial uses, about HK$1.6 trillion in land revenue could be generated.
“Even if we halve that, we still get about HK$800 billion, and that doesn’t even count GDP growth … in the Greater Bay Area,” he said, referring to Beijing’s scheme to integrate Hong Kong, Macau and nine Guangdong cities into an economic and business hub.
“Factoring that in, we can recover our costs in about 18 years. An infrastructure project can last 80 to 100 years so, after we recoup the initial costs in 18 years, we just will just be taking in money over the following 82 years.”
Lau believed the government could consider ways to finance the project without spending any money, such as issuing bonds or putting the reclamation works up for public bidding.
Such a model was used in the 1970s and 80s for Sha Tin’s highly successful City One development, which was eventually built on 17 hectares of reclaimed land. The estate is home to around 30,000 residents.
“The government would not have to spend a single penny … and they’ll even get paid for it,” he said.
But Yeung Ha-chi, of land concern group Liber Research Community, warned that such partnerships were also prone to failure, and cited the examples of development areas such as Tin Shui Wai in the New Territories, and Ma Wan, near Tsing Yi.
“All investments come with risk and you are using public money for a very large gamble,” he said. “You make assumptions like continuous ‘GDP growth in the Greater Bay Area’ … but how many times has Beijing failed to achieve 8 per cent growth over the years?”
Yeung also shot down arguments from the plan’s supporters that reclaiming more land would solve the city’s land problems, and increase liveable space.
“The West Kowloon [reclamation] project was supposed to ease the urban density of Yau Tsim Mong district. Has it done that? We all know that it was used to build luxury estates after.”
Yeung said there were other options such as brownfield sites, and land currently leased by private recreational clubs.
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