is correct to seek major private sector participation.
3. The Port
(i) Need for a site for port expansion
The Hong Kong Government consider that once container Terminals 8 and 9 on Stonecutters and Tsing Yi Islands have been completed, the best way to cope with forecast port traffic growth is to develop new facilities on Lantau Island. Unlike the airport, these facilities will be developed gradually in response to demand.
(ii) Cost and Financing of new port facilities
The estimated cost of full development is HK$50 billion at 1989 prices. But 80% of this should be taken up by the private sector. There is no risk of over commitment by the Hong Kong Government because the port facilities will only be expanded if there is sufficient demand. Any further development would be entirely privately financed, built and operated in the same way as other container terminals in Hong Kong which have all been commercially very successful. A number of back up facilities such as container lorry parking and stacking would also be provided by the private
sector.
The Hong Kong Government would, however, need to provide for certain elements such as break-waters, typhoon shelters, dredging and navigational aids. These could require a total expenditure of about HK$10 billion, but spread over many years, well into the next century.
BIFADF/3
CONFIDENTIAL
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