Put CT10 on ice, says terminal association

The head of Hong Kong's container terminal operators' association says a tenth container terminal, estimated to cost about US$1.3 billion, is not needed "in the foreseeable future", calling into question the future of the project.

Alan Lee told the South China Morning Post: "I do not see any need for it in my lifetime. My lifetime might be about 10 or 15 years."

He said the five-member group, which includes Li Ka-shing's Hongkong International Terminals, DP World and Cosco-HIT, would support construction of a new terminal provided the project was justified.

"Our position is that we do not disagree with the building of container terminal 10 provided we see a need for it," Lee said.

But he gave three reasons that questioned whether there would be sufficient growth in container throughput to support the massive investment needed.

Lee said the global slowdown in trade caused by the financial crisis weighed on container volumes, resulting in a 20 percent collapse in throughput in Hong Kong in the first half of last year.

Additionally, he said, the shift by China's factories to smaller, higher-value products meant there would be fewer shipping containers needed compared with bulkier, lower-value goods.

Thirdly, he said the move of manufacturing to the western side of the Pearl River would mean there would be less reliance on Hong Kong's port.

Meanwhile, the government is pressing ahead with a preliminary feasibility study into plans to build container terminal 10 on the southern side of Tsing Yi island. Work on the two-year study is due to be completed in March next year. Latest estimates of the total cost of developing the container terminal, which is believed to involve some reclamation and the relocation of oil terminals at Tsing Yi, have not been released but observers believe the cost would top $1.3 billion.

A study into port cargo forecasts released in 2008 projected that Hong Kong "would continue to have modest and steady growth" and "Hong Kong will need the first new container berth by 2015 at the earliest".
Observers have their doubts. The nine Kwai Chung container terminals handled about 15.16 million TEUs last year, down from 17.7 million TEUs in 2008.

But outlining the capacity that was available at Kwai Chung, Lee said: "We still have room for 23 million TEU."

He said this handling capacity could be expanded by up to about five million EU, if there was more land available for container storage.

Over the past 10 years, throughput growth at Kwai Chung has been mixed, while in two years, 2001 and 2009, there was a year-on-year drop in volumes.

And although there was a strong rebound in container volumes at the Kwai Chung terminals in the first six months of the year, Lee doubted if this rate of increase would continue in the second half.

"My forecast is about seven percent for the whole year at Kwai Chung, with three percent to four percent growth in the latter part of this year," Lee said.

Hong Kong is also facing competition from ports in the Pearl River Delta. GHK (Hong Kong) managing director Jonathan Beard said current plans envisaged that more than 20 million TEU of capacity would come on stream early next decade in Shenzhen, Nansha and Gaolan.
(Source:www.cargonewsasia.com)