HK seeks terminal ties with shippers

By Wendy Leung  |   2008-6-27  |     NEWSPAPER EDITION

HONG Kong may favor shipping companies over port operators when awarding the rights for a planned container terminal to help secure traffic as competition from cheaper Chinese mainland harbors mounts.

"This idea allows us to tie up with shipping lines, who will bring more containers," Permanent Secretary for Transport & Housing Francis Ho said yesterday.

China Shipping Container Lines Co, the nation's second-largest sea-cargo box carrier, may consider bidding for the terminal, spokesman Ye Yumang said yesterday.

The 10th terminal, a bridge to Macau and a new airport runway are part of government plans to boost links with the mainland and spur Hong Kong's transport and trade sector, which accounts for about a quarter of the economy.

The city lost its spot as the world's second-busiest container port to Shanghai in 2007 after traffic grew at the slowest pace in six years.

"Whether Hong Kong will be able to increase container traffic depends on the neighboring economic developments," Edward Wong, a Quam Ltd analyst, told Bloomberg News. "The terminal operator isn't able to change the demand on its own."

Hong Kong will need the new terminal by as early as 2015 because existing facilities in Kwun Chung, its main port area, are already working at 90 percent of capacity, Ho said. Growth in the Pearl River Delta region, China's manufacturing center, will also continue to boost sea-cargo traffic, he added.

"The region as a whole is growing, therefore you would expect different parts of the region to benefit from the economic development," he said. China's export growth accelerated to 28 percent in May. About 90 percent of world trade moves by sea.

Li Ka-Shing, Hong Kong's richest man, has said that the terminal isn't necessary as fast-growing mainland ports such as the neighboring city of Shenzhen will lure business away. Li controls Hutchison Port Holdings Ltd, the world's largest container-terminal operator.