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Following is the keynote address entitled "Transport Infrastructure in Hong Kong: The Way to Economic Growth" by the Secretary for Transport and Housing, Ms Eva Cheng, at the 2nd Annual Euromoney Global Infrastructure Finance Conference held today (February 12):
Mr Shale, Mr Flockhart, Mr Nag, Distinguished Guests, Ladies and Gentlemen,
Good morning. I am delighted to be here at this Global Infrastructure Finance Conference and I am extremely pleased that the organisers have decided to hold the event in Hong Kong again. We are always proud to showcase our infrastructure that has played an instrumental role in our development into a truly international city.
Meeting Challenges and Staying Competitive
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This conference could not have been more timely. The past few months have seen the unfolding of a global financial crisis, the scale and impact of which are unprecedented and far-reaching. We are all bracing ourselves for huge and mounting uncertainties. Economies around the world have all turned to vigorous investment in infrastructure projects as part of the overall plans to lift them out of the downturn.
In Hong Kong, we have put in place a full range of measures to weather the financial storm. The Task Force on Economic Challenges chaired by the Chief Executive has been spearheading our efforts on this front. We have, first and foremost, helped maintain stability and confidence in our banking system by guaranteeing all bank deposits in Hong Kong until 2010. We have expanded our overall commitment to the credit guarantee scheme for small and medium enterprises, the lifeline of our economy, to the order of US$12.8 billion to ease the pressure of credit crunch on them.
A key component of the Chief Executive's strategy is the fast-tracking of an extensive programme of infrastructure projects to create employment through public spending that will generate economic benefits. The worst is probably not over; but with all these timely and decisive measures, we are confident that Hong Kong will be well positioned to take off when the economic situation improves.
The focal point of this infrastructure development programme is our 10 major infrastructure projects. They will generate, from their commissioning to a mature stage, an estimated added value to our economy to the tune of US$12.8 billion and create about 250,000 new jobs. Most of these projects are already making a difference to the employment scene as they are already in design stage. Some projects will see construction start as early as this year. Before I mention them in greater detail, let's spare a minute on Hong Kong's current transport scene.
Hong Kong's Transport Scene
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Hong Kong has a sound transport system. The 7 million people living and working in just some 1,100 sq km are served by more than 2,000 km of roads and 210 km of railways. Our public transport service, run by commercial operators without any direct subsidy, offers commuters a variety of choices and caters for more than 90% of the 11.5 million commuter trips every day. The Forbes magazine puts Hong Kong on top of the world's 10 Best Commutes. We have earned this ranking, among 84 of the largest cities, because our commute, in the words of Forbes, is among the world's most reliable and efficient, and is very reasonably priced. Those of you who are familiar with the taxi or underground fares of other big cities, London for example, will know exactly what I mean.
Not only do we have first-class domestic transport service in Hong Kong, our cross-border transport links also make us a premier gateway to Mainland China. Daily cross-boundary vehicular traffic rose 55% from 1998 to 2007, while the number of passengers crossing the border on land was more than doubled during the same period. With continued population and economic growth on both sides of the border, the annual cross-boundary passenger flow in 2016 could well hit the 250 million level, up 56% from 2007.
Cross-Boundary Infrastructure Projects
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Hong Kong will spare no effort in achieving even better connectivity, especially when it comes to facilitating the flow of people and goods between us and the Mainland, and with the rest of the world.
Top on our agenda is the 29.6 km Hong Kong-Zhuhai-Macao Bridge, the first land-link between Hong Kong and the western part of the Pearl River Delta (PRD). This bridge will be twice as long as the Oresund Bridge between Sweden and Denmark. When it opens in around 2016, what is now a four-hour trip to get from Zhuhai to the Hong Kong International Airport will be less than 30 minutes, making the whole of western PRD within a three-hour commuting radius from Hong Kong. This bridge will also bring travellers onto the national expressways serving the PRD and beyond.
The Hong Kong-Zhuhai-Macao Bridge will bring enormous economic opportunities for Hong Kong. The western PRD has a total area of nearly 17,000 sq km, 15 times the size of Hong Kong. The easy access to this land of vast potential will enable us to tap even more efficiently into the 50 million-customer base there. The inflow of more travellers and goods through the bridge will benefit Hong Kong immensely in areas such as tourism, finance and commerce.
In the same league of strategic importance is the Guangzhou-Shenzhen-Hong Kong Express Rail Link, which will run from West Kowloon in Hong Kong to Guangzhou within 50 minutes. The present journey takes nearly two hours. The 26 km tunnel section of this rail in Hong Kong is about half as long as the English Channel Tunnel. The most exciting part, I must say, is that this project will put Hong Kong onto the national map of high-speed railways that span 12,000 km. The railway will terminate at Shibi in Guangzhou, planned to be a new development area for the city and one of the four largest rail hubs on the Mainland. The Express Rail Link will also provide opportunities for major Mainland cities to run direct train service with Hong Kong. Hong Kong will be just a few hours away from the provinces in Central and Southern China. Travellers will be able to go, in comfortable compartments, from Hong Kong to Wuhan in only five hours, to Shanghai in about eight hours, city-centre to city-centre, minus all the hassle of rushing to and from the airport.
There is another major cross boundary railway project being planned. Together, Hong Kong and Shenzhen have been looking at whether it is feasible to build a rail link connecting the two airports. With this link, passengers can make their way from the Hong Kong International Airport to the Shenzhen Airport in about 20 minutes, roughly the time it takes to go from Central London to Heathrow Airport by the Heathrow Express. And it will be more than a rail between two airports. This railway is designed to interchange with three lines of the Shenzhen Metro as well as the Guangzhou-Dongguan-Shenzhen Rapid Transit System, thereby greatly expanding its catchment. We hope that this rail connection, together with efficient passenger and baggage handling arrangements, will facilitate seamless transfer of international and domestic passenger.
Development in the PRD and Hong Kong
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Ladies and gentlemen, you may be aware from the media in early January that the Central Government announced a development plan for the PRD up to 2020, which promotes closer co-operation among Guangdong, Hong Kong and Macao. The plan envisages the formation of a highly convenient and efficient transport network. By 2020, the total length of highways in the PRD will be increased from 1,900 km in 2006 to 3,000 km; and the length of railways is expected to reach 2,200 km, compared to 287 km in 2006.
We are determined that Hong Kong should play an important part in this transport network for the PRD. The cross-boundary projects I have been talking about this morning will enable us to do just that. With much closer rail and road links with the PRD, our co-operation with Guangdong will rise to a new level, our position as a transport hub will be strengthened, and the prospects for our sustained development will be even brighter.
Aviation and Logistics
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Cross-boundary infrastructure aside, we are making other ongoing efforts to reinforce Hong Kong's status as a regional and international aviation, maritime and logistics centre. We will expand the capacity of our airport and ports. For example, we are actively pursuing the airport midfield expansion project and the third runway proposal in conjunction with the Airport Authority Hong Kong.
Domestic Transport Infrastructure
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At the same time, we have not forgotten our domestic network. We have several local, but equally important, transport projects under active planning or construction. Upon their completion. The railways' share of the daily commuters carried by public transport will go up from the current 35% to 40%. At the same time, about US$5.1 billion has been earmarked for roads, highways and bridge projects between 2007 and 2013 to improve local infrastructure to meet existing and future traffic and development needs.
Opportunities for Investors and Financiers
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I notice that among the issues to be raised at the panel discussion shortly is the key question of whether infrastructure projects, put forward in response to the financial crisis, stand up to economic or financial scrutiny. Planning for some of the projects I have described, has taken years and financial, economic, engineering and environmental viability thoroughly studied. Some required intensive cross boundary planning and co-ordination. I hope I have demonstrated to you the strategic importance of these projects. Because of the sheer scale and complexity, some may still have a funding gap if undertaken by a private entity such as our Mass Transit Railway Corporation. Here, the Government may need to step in to fill the funding gap, without which the corporation would not have undertaken the project in the first place. There will still be a substantial requirement for financing by the corporation. At the contractors¡¦ level, we will also continue our policy of welcoming global participation in our projects to make sure we get the best value out of our taxpayers¡¦ money. During the past 10 years, we have been pleased to see that foreign contractors have been taking an active part in our railways and highways projects. Such participation has come to some 75% of the total contract values, amounting to around US$7.8 billion from 1998 to 2008. Financing needs of contractors will also need to be met through partnership with the banking community.
Closing Remarks
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So can we build our way out of a recession? Construction activities alone may not turn the tide. But investment in connectivity is sure to bring real benefits to the economy. Enhancing our transport asset through strategic projects will put us in good stead to leverage on the growth momentum in the Mainland. It reminds me of a picture showing a sharply meandering road with a caption, which reads "a bend in the road is not the end of the road unless you fail to make the turn". We are making that turn. We have begun by mapping out our action agenda on our strategic transport infrastructure and doubling our efforts in implementing them.
Ladies and gentlemen, I wish you an interesting and rewarding conference. And whether for business or pleasure during your stay here, do make use of our world-class transport to experience the connectivity and dynamism of this remarkable city.
Thank you very much.
Ends/Thursday, February 12, 2009
Issued at HKT 12:10
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