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The Government has given policy support to the Trade Development Council (TDC)'s proposal to extend the atrium link between Phases I and II of the Hong Kong Convention and Exhibition Centre (HKCEC) to provide more exhibition and convention space.  

The granting of policy support has been endorsed by the Executive Council, a spokesman for the Government said today (June 16).

The TDC proposed to the Government in September 2004 rebuilding and expanding the atrium link between Phases I and II of the HKCEC. The proposal will create an additional 19,400 square metres of exhibition space, boosting total dedicated exhibition space at HKCEC by 42% and total rentable space by 30%. The TDC intends to fund the capital cost of the proposal, estimated at $1.3 billion, from bank loans and a contribution from the commercial operator of HKCEC.

The TDC intends to start work on the proposed project in 2006 for completion in 2009. Nevertheless, it is a prerequisite for the TDC to seek approval from the Town Planning Board before the project commences. The engineering works under TDC's proposal should not constitute reclamation works for the purpose of the Protection of the Harbour Ordinance. However, in carrying out some of the engineering works, the TDC has to comply with the relevant stipulations under the Foreshore and Sea-Bed (Reclamations) Ordinance. The TDC will also have to comply with the relevant environmental protection requirements.

"We believe that the proposal helps enhance Hong Kong's competitiveness as a major convention and exhibition centre in Asia. With more exhibitions and conventions to be held at the expanded HKCEC, it will bring about long-term benefits to Hong Kong," the spokesman said.

"We are also satisfied that no reclamation works and additional roads are required for the proposed project," he said, adding that the TDC had been implementing various traffic improvement measures since October to help reduce freight movements from and to the HKCEC when major trade fairs were taking place.  

Upon receipt of the TDC's proposal, the Government commissioned a consultancy study to assess whether there would be unmet demand for exhibition facilities in Hong Kong from existing and new exhibitions in the coming five to 10 years, and assess the respective economic implications of meeting and not meeting any projected shortfall in supply of facilities. The consultant submitted its report to the Government in April 2005.  

"It is our stated policy that the Government will consider the question of support to the further expansion of HKCEC only if it is satisfied that there will be unmet demand taking into account, among other things, the additional 100,000 square metres of exhibition space to be provided by AsiaWorld-Expo (AWE) at Chek Lap Kok and the timing of its availability, and that government support is fully justified for the good of the economy.

"Due regard will also be given to the Government's interest as a shareholder in AWE and also to the private sector's investment," the spokesman explained.

According to the consultant's report, in 2004, bookings for a number of exhibitions and conventions could not be entertained by HKCEC due to the lack of space at the required time-slots. Also, for some "mega" trade exhibitions held at the HKCEC, the concerned organisers still could not meet all the demand for exhibition space even when all the rentable space at HKCEC had been used.

The consultant had explored other options including relocating the existing "mega" trade exhibitions to another venue and rescheduling them to other time-slots, but found that the alternatives were not feasible.  

Moreover, Hong Kong needs to recognise and respond to the evolving trends in the exhibition industry, if it is to maximise the opportunities presented by the rapid economic growth of Mainland China, and in face of the competition from the Mainland and Macao exhibition industries.

The consultant forecast that the proposal, if implemented, would bring substantial economic benefits to Hong Kong. The quantifiable benefits derive primarily from the additional external exhibitors and visitors participating in existing expanded and new exhibitions and convention events upon the expansion of the HKCEC.

There would also be non-quantifiable benefits, mainly related to increased trade and business opportunities for local companies as a result of larger and more conventions and exhibitions to be held in Hong Kong.  

It is estimated that the annual quantifiable economic benefits, in terms of value added, would rise from about $176 million in the first year following the opening of the atrium link extension to about $778 million in the fifth year. The number of jobs created is expected to rise from about 483 in the first year to about 2,131 in the fifth year.

The report pointed out that in an increasingly competitive market, Hong Kong risks losing the large established exhibitions to other venues in the region. The economic impact on Hong Kong of HKCEC losing one large annual trade exhibition (using 65,000 square metres of space) is estimated at around $407 million per year. In terms of employment, this would mean a loss of around 883 full-time equivalent jobs (made up of 128 job losses in the exhibition servicing industries and 755 job losses in the visitor-related industries).

The Government and TDC have briefed the Legislative Council Panel on Commerce and Industry on the proposal. The TDC has also consulted the Wan Chai District Council and various trade and industry associations. They are all supportive in general.

Ends/Thursday, June 16, 2005

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