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Conceptual Option
Relocation of Kwai Tsing Container Terminals

Topside Development of Kwai Tsing Container Terminals

Kwai Tsing Container Terminals

The Kwai Tsing Container Terminals (KTCTs) are the major sea port facility of Hong Kong. As the fifth busiest container port in the world, Hong Kong Port (HKP) handled 20.8 million twenty-foot equivalent units of container throughput in 2017, of which close to 80% was handled by KTCTs.

Located on the waterfronts of Kwai Chung, Tsing Yi and Stonecutters Island, KTCTs comprise nine terminals which are run commercially by five private operators under separate land leases. The nine terminals provide 24 ocean berths and altogether take up 279 ha of land. In the immediate vicinity of KTCTs, another 100 ha of land is primarily used for port back-up purposes. This land is mainly let out on short term tenancies (STTs) to operators for container vehicle parking and container storage/cargo handling to support the terminal operations.

Benefits of Development

There have been suggestions that the terminals should be relocated to other parts of the city to offer a chance to modernise and upgrade the port infrastructure, while at the same time freeing up the land at the existing terminals for other purposes to meet Hong Kong's other development needs.

The relocation proposal would free up some 380 ha of land in a prime urban location for other uses.

This can create an opportunity to enhance the port facilities, reconfigure the layout of the terminals to achieve greater efficiency, and provide enough berths and yard space for accommodating mega-vessels and handling trans-shipment cargo. These developments would help maintain Hong Kong's long-term competitiveness as a cargo hub.

Alternatively, it has also been suggested that if it is difficult to pursue the relocation of KTCTs, housing units can be built above the terminals by constructing elevated platforms, such that existing port operations can be maintained while the land they occupy can be utilised more optimally.

Costs of Development

If such a plan, be it relocating KTCTs or topside development over the terminals, is to be taken forward, the development costs involved would include land resumption, compensation and relocation costs (with reclamation quite possibly required to relocate the terminals); site formation (or the cost of constructing an elevated platform if topside development on the existing site is the preferred option); and supporting infrastructure facility costs including roads, navigation channels, water supply, sewage, drainage and flood control.

A detailed assessment on the economic and financial viability of the relocation proposal would need to be carried out to ascertain its cost-effectiveness. Factors to be considered include capital investment for possible land resumption/reclamation/site formation and supporting infrastructure facilities; the value of the vacated land; the costs of relocating KTCTs; and the impact of relocation on HKP's competitiveness in the long term. To ensure financial viability, factors need to be considered include the lease conditions of the new terminal, revenue from the operations of the new terminal, operating and labour costs, the market situation, the overall business environment, competition from neighbouring ports and the prospects of the container and port industries.

Challenges and Uncertainties

The 279 ha of land occupied by KTCTs is private land under separate land leases. If the KTCTs is to be redeveloped before 2047, i.e. the expiry of the land leases, it is necessary to secure an agreement with the lessees concerned on the proposal, including the value of the land.

For the port back-up land occupying some 100 ha outside the boundaries of KTCTs, whilst the Government has the right to terminate these STTs for long-term development, it should be noted that port back-up land is an integral part of port operations. Therefore the land should be considered in a holistic manner when planning for the relocation of KTCTs.

The key to the relocation proposal is the viability of securing a replacement site, which must be able to meet the industry's needs and evolving mode of operations. For example, the site has to be surrounded by waters deep enough to allow mega-vessels to berth, and must have good access to a deep marine channel. Each berth should have a length of no less than 400 metres and 25 ha of yard space to support terminal operations. Good connectivity of road transport linking the east and west coasts of the Pearl River Delta is also required. With reference to international port operation needs and situations, it is estimated that a relatively sizeable plot of land would be required to relocate the terminals, which might necessitate reclamation.

Currently, KTCTs operate around the clock and all year round. It would be of paramount importance to ensure a seamless transition in the port relocation process, such that port operations would not be compromised.

Relocation of KTCTs would require large scale and in-depth research. Planning and implementation of the relocation cannot be completed within a short period of time, given the possible reclamation involved and construction of new infrastructure facilities. In addition, consensus among relevant stakeholders and the community would be necessary. The relocation proposal can therefore be seen only as an option for long-term port development and land supply option.

In the case of topside development above KTCTs, this proposal can only be taken forward on the condition that terminal operations would not be affected. It can be expected that complex technical requirements and mitigation measures would be involved, and detailed studies would need to be carried out to look into the proposal's feasibility and cost-effectiveness. A number of potential concerns would also need to be considered carefully, including the development rights of the existing privately owned land; the impact on the operations of the terminals and the port's competitiveness; the compatibility of topside development with the neighbouring environment; and the impact on traffic, the environment (including air, noise and glare) and the visual setting. It would also be subject to the rezoning procedure under the Town Planning Ordinance (Cap. 131).

Key Points

  1. Container terminal operations are an important part of Hong Kong's economic development. The port sector employs 2.2% of Hong Kong's working population and underpins the trading and logistics sector. Due consideration to the impact on terminal operations and Hong Kong's economy would have to be given when considering any suggestion to change the land use of container terminals to increase land supply.
  2. The proposal for relocating KTCTs or constructing an elevated platform over the existing terminals to allow topside development would present considerable technical challenges, and large-scale in-depth research would be needed. Even if the proposal is to be taken forward, it could only be seen as a land supply option for the longer term.
| Last Revision Date: 5 December 2018