constraints in the Sha Tin Tai Po Lo Wu corridor may become so severe that the emphasis of development should be shifted to areas served by improved western corridor routes which would, in turn, provide improved traffic links to China. Having land available at Tin Shui Wai would enable this option to be kept open and would recognise the principle of achieving multiple benefit from unavoidable investment in infrastructure.
Would Tin Shui Wai Divert Resources
Away from Other Priorities and Place
an Unacceptable Strain on the Construction
Industry?
34
As noted in paragraph 1(c) above, Members requested that this question be examined in evaluating the merits of the developer's proposals. Over the past four years, expenditures on building and construction in the public and private sectors have been as follows:
ΤΡΙ (3rd quarter)
Year
at 1980 Prices ($ million)
Private
Public (actual)
Total
185
1977-78
6, 550
4, 190 (2, 100)
10,740
230
1978-79
6, 280
5, 460 (3, 400)
11, 740
304
1979-80
6,340
5,830 (4,800)
12, 170
369
1980-81
6,390
6, 550
12, 940
1981-82
6, 400
8,500
14, 900
(estimated)
Total capital expenditure at 1980 prices has increased at an average of 62% per annum between 1977-78 and 1980-81 and an estimated 81% p. a. between 1977-78 and 1981-82. The 1980-81 expenditure accounted for about 12% of GDP in that year. The average increase in the public sector however has been 16% up to 1980-81 and seems likely to increase to around 19% by the end of 1981-82.
35
The relationship between capital expenditures and pressure on the construction industry can be measured in general terms only, but it is apparent from such barometers as the PWD Tender Price Index (TPI) (used to inflate actual expenditures to 1980 prices in the table in paragraph 34 above) that, since at least 1977, the capacity of the industry has been fully extended. Indeed in 1978-79, over-extension of capital works created strong inflationary pressures that required significant slow downs in planned expenditure in the Public Works Programme.
CONFIDENTIAL #3
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