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Following is a question by the Hon Frankie Yick and a reply by the Acting Secretary for Transport and Housing, Mr Yau Shing-mu, in the Legislative Council today (November 28):
Question:
Some members of the logistics industry have relayed to me that there has all along been a lack of logistics sites for many years. Although the former Chief Executive mentioned in his Policy Address in 2009 that the authorities "have identified a number of permanent sites around the Kwai Tsing area, which is close to our container terminals and airport" for the development of a logistics cluster, the Government has only granted two sites so far, and other sites may only be released pending the completion of the market and traffic impact assessments. In this connection, will the Government inform this Council:
(a) of the timetable for releasing the remaining sites as well as the areas, locations and specified uses of those sites; among such sites, the number of those which will be used for storing containers and providing logistics back-up services;
(b) given that some members of the logistics industry have told me that apart from the Kwai Tsing area, the authorities will also consider identifying other logistics sites in North West New Territories, of the progress update on such task (including the timetable for releasing the sites as well as the areas and locations of those sites); and
(c) given that the logistics industry has switched to the provision of storage, distribution and transit services for high value goods and these services require a lot of land for the work processes of storing, devanning and consolidating containers, whether the Government will review its current policy on logistics sites and, making reference to the practice of the Government in the last century of constructing factory buildings and industrial estates, provide infrastructural facilities to tie in with the development of the logistics industry, eg constructing government warehouses and lease them to small and medium enterprises at cost, so that the development of such enterprises will not be hindered because of inability to afford the high rentals of warehouses built by developers on sites obtained at high bid prices; if it will, of the details of its plan; if not, the reasons for that?
Reply:
President,
The logistics industry is a traditional pillar industry of Hong Kong. It has, over the years, made significant contributions towards promoting the economic development and employment in Hong Kong. The logistics industry covers a broad spectrum of service areas, including sea, land and air terminals, carriage of goods, freight forwarding, storage and supply chain management. Logistics is no doubt inseparable from warehousing. According to the statistics of the Rating and Valuation Department, private warehouses with a total area of about 3.47 million square metres as at end 2011 are widely distributed in industrial sites across various districts to provide storage facilities for the logistics industry. Furthermore, in Kwai Tsing alone, some 100 hectares of land are being used for port back-up purposes, including goods vehicle / container vehicle parking and container storage.
In recent years, the logistics industry has gradually shifted towards the handling of high-value goods and provision of high value-added services to respond to market trends. In particular, with the increasing demand for trend-sensitive and up-market consumer goods in the Mainland and other parts of Asia, it has become more important to grasp changes in tastes and to conduct timely marketing and sale of goods. Many overseas brands have therefore set up regional distribution business in Hong Kong to make use of our established strengths, including our efficient and well-connected external transport network, an international airport with a large handling capacity and comprehensive services, a free port and intellectual property rights protection, etc. These companies engage third party logistics service providers in Hong Kong for carrying out inventory management and other value-added services such as labelling and packaging before the goods are distributed to other countries or regions at the right time and in the right quantity. These services are described as "third party logistics" within the industry. At present, there are many third party logistics service providers operating in Hong Kong. They own professional knowledge and resources in supply chain management, and are geared to planning and managing the flow of goods along the supply chain to cater for the requests of individual consignors. As logistics services are getting more specialised, industry demand for modern logistic facilities has also increased. The Government is committed to identifying and providing dedicated land for this type of logistics operation in order to support the industry in the provision of high value-added services. In Hong Kong where land is a valuable resource, modern logistic centres are built as multi-storey buildings with driveways facilitating the direct access of heavy goods vehicles to various floors for loading and unloading. These logistics centres are purpose-built and are different from conventional warehouses or industrial buildings. Since Kwai Tsing is located close to the container terminals and the airport, it is a preferred district for identifying logistics sites. We have completed traffic impact assessment of the proposed logistics developments in Kwai Tsing, and have released two sites in Tsing Yi with a total area of 4.8 hectares through open tender in 2010 and 2012 respectively. We have stipulated in the lease that the land could only be used for the provision of third party logistics services, and that such use should not be changed. We plan to release another logistics site of about 2 hectares in Tsing Yi through open tender in early 2013.
In parallel, we are working with the Planning Department and relevant departments to identify suitable sites outside Kwai Tsing and examine their feasibility for logistics use. Tuen Mun West is a key district that we focus on. With the commissioning of the Tuen Mun – Chek Lap Kok Link, the travelling time between Tuen Mun and the airport will be significantly reduced to approximately 10 minutes, which will make Tuen Mun West more attractive for the development of the logistics industry. In this connection, we are conducting a traffic impact assessment and an ecology assessment for a site of about 3.8 hectares in Tuen Mun West to ascertain its suitability for the construction of a modern logistics centre. If the assessment results confirm that the proposed development is feasible, we will submit the proposal for the consideration and approval of the Town Planning Board. Moreover, the Administration is reviewing the feasibility of designating some of the land in Tuen Mun West Area 38 for logistics development.
In the long term, we will, through various studies, explore if it is feasible to earmark some of the land in new development areas (for example, Hung Shui Kiu and Northeast New Territories) and the reclaimed areas for modern logistics developments.
As logistics service is a kind of economic and commercial activities, the Administration has released logistics sites to the market in a fair and open manner through the established practice of open tendering to allow enterprises interested in investing in Hong Kong's logistics industry to submit bids. As for industrial estates (IEs), they were set up mainly to provide industrial sites for activities which cannot be carried out in an ordinary multi-storey industrial or commercial building, with a view to broadening the industrial base and upgrading the technology levels of Hong Kong, and facilitating the overall economic development. However, the land concerned cannot be used solely for storage purpose. According to information available, at least one logistics company providing high value-added services has been admitted to an IE.
We note that logistics enterprises of different sizes all have a strong demand for space. As such, when putting up a logistics site for open tender, we always stipulate in the lease conditions that the land can only be used for the provision of logistics services, and that such use should not be changed. This restriction should help to lower the bidding price. Besides, the Government is open to considering any other effective and feasible measures proposed by the industry to allocate the limited land resources to private enterprises for development of logistics services, provided that the measures give due regard to the principle of fair competition and the need to balance the interests of different stakeholders, and that the overall development and competitiveness of our logistics industry can be enhanced.
Furthermore, we will continue to provide suitable land for port back-up uses to facilitate the efficient operation of the container terminals and the port. To this end, we plan to release sites of about 14 hectares in Kwai Tsing in phases to meet the industry's demand for port back-up sites from next year onwards.
Ends/Wednesday, November 28, 2012
Issued at HKT 13:02
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