The Corner for Political & Business Views — Flexible Planning of “Lantau Tomorrow Vision” Needed to Ensure Cost Effectiveness of Project
Property prices in Hong Kong are still rising. The latest statistics provided by the Rating and Valuation Department shows that local residents are spending as much as 70% of their income on the mortgage payment, which is a lot more than they can afford. This further shows that expanding land resources is of great urgency.
The “Lantau Tomorrow Vision” development plan previously proposed by the government is controversial not only regarding the reclamation regions involved; in fact, the cost-effectiveness of the project is also a focus of concern. According to the government’s estimation, the cost of the whole “Lantau Tomorrow Vision” project will be 624 billion and the land income will be around 700 billion. Nevertheless, the estimation has not yet taken into account any uncertain factors, including but not limited to project change and rise of construction cost, which may further increase the total expenses. Income from selling land is also not guaranteed as it could also be affected by external factors. As an important construction investment of Hong Kong in the future, completion of “Lantau Tomorrow Vision” is of course not possible unless it is cost-effective, because the project is going to cost hundreds of billions.
Yet, as a means to deal with the urgent demand for housing, we should look into all possible solutions for land supply instead of just raising objections and freezing all feasible policies. The most useful way to implement the project is to move forward as planned and keep optimizing the solution. “Lantau Tomorrow Vision” is a reclamation project that is going to last for 15 to 20 years. The government can be more flexible in planning and should over the decades keep reviewing its plan in contrast to the economic environment, the needs of the society, the estimated sale prices and its financial reserve. Consulting different groups for opinions and making changes whenever necessary to ensure the project is cost-effective are both important.
Regarding project funding, the government can issue a bond as well as financing the project through railway and land development. Seeking investment from the mainland government is also an option worth discussing. Here I am just offering some of my suggestions and I believe there will be better ones. Cost-effectiveness can be optimized as the project proceeds and there are tons of possibilities. For the future of Hong Kong and the welfare of Hong Kong people, different parties should put aside their differences and provide constructive suggestions proactively. The government, in turn, should remain positive and open when studying how feasible solutions can be implemented to solve the urgent needs of society.
Chairman of Asia Allied Infrastructure
(This is a Chinese-to-English translation by Corporate Communications Department. The original article has been published in Headline Daily on 10 June 2019.)
By Mr. Pang Yat Ting, Dominic