LCQ13: EcoPark
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Question:
It has been reported that when EcoPark commenced operation in 2007, a total of 21 recyclers were successful in the tender exercise, but only 10 tenants remain in operation at present. Such tenants expect the Government to introduce specific support policies. In this connection, will the Government inform this Council:
(1) whether it has assessed if the ancillary facilities of EcoPark are sufficient; given that only about 60 per cent of area of the rentable land at EcoPark has been leased out, whether it has assessed the reasons for the relatively low occupancy rate of EcoPark; if so, of the details; if not, the reasons for that;
(2) whether it knows the current management expenses of EcoPark, and whether the monthly rental income of EcoPark is sufficient to offset such expenses;
(3) of the specific measures in place to assist in collecting waste (e.g. waste metal, waste batteries, waste tyres and food waste) from the market and then handing it to EcoPark tenants, so as to reduce the transportation costs of such tenants;
(4) whether it will take measures to increase the number of jobs to be created by EcoPark, including providing lots of smaller area to enable smaller recyclers to operate there, and introducing "the number of jobs to be provided" as one of the conditions for awarding tenancy agreements; if so, of the details; if not, the reasons for that;
(5) given that some recyclers have indicated that the successful bidders of the various lots at EcoPark need to build factories and apply for water and electricity supply by themselves, which is a time-consuming and cumbersome process, whether the Government will build a multi-storey factory well equipped with water and electricity facilities at EcoPark for successful bidders to move in, so as to reduce the operating costs of the industry; if so, of the details; if not, the reasons for that; and
(6) as some EcoPark tenants have indicated that in recent years, although the daily per capita municipal solid waste (MSW) disposal rate in Hong Kong has been increasing year after year, as local recyclers mostly export waste to other places for recycling, the quantity of MSW recycled has continued to drop, whether the Government will adjust the local recycling policy to achieve "according priority to recycling local waste locally"?
Reply:
President,
The consolidated reply to the question raised by the Hon Elizabeth Quat is set out below:
EcoPark, which came into operation in 2007, has a site area of about 20 hectares (ha) and it is one of the major initiatives of the Government for fostering the development of the local recycling industry. EcoPark is designated for use by the environmental and recycling industry and it offers the trade with long-term land lease at an affordable rental cost. Meanwhile, EcoPark offers together with a whole package of basic utilities including sea and land transport access, water and electricity supply, sewerage system and telecommunication system. Common facilities such as internal road network, standard berthing spaces at the marine frontage, weighbridge, as well as the meeting room, seminar room and conference room inside the administration building, are available for use by the tenants, so as to help reducing their capital expenditure and encourage them to invest in more advanced technology and treatment processes. The total quantity of recyclables processed in EcoPark exceeded 1 million tonnes (over 200,000 tonnes/year on average) in the last 5 years.
The Environmental Protection Department (EPD) has been maintaining communication with the recycling industry to understand the actual needs of the industry in order to cope with its development. In response to the accumulation of experience and market changes, the EPD continues to adjust and optimise the operation strategy of the EcoPark, e.g. extending the lease terms from 10 to 20 years to provide a more stable and long-term investment environment for enterprises, and increasing the technical/rental weighting of the tender from 40/60 to 70/30 to encourage recyclers to develop advanced and value-added recycling technologies.
(1) EcoPark tenants are operating on commercial principles and their business situations are subject to market competition and other market factors. EcoPark tenants may move out due to various factors such as expiry of the lease, operational considerations or changes in business plans. Meanwhile, a tenant manages to continue his operation in EcoPark through another open tender. As such, the occupancy rate of the EcoPark may vary from time to time. Currently, 90 per cent of the EcoPark area (i.e. about 12.2 ha) has been utilised for waste recycling purposes. The remaining two sites with a total area of about 1.3 ha are available for development. The EPD conducted open tender on October 31, 2022 for one of the sites with an area of about 0.4 ha and the tender was closed on January 20, 2023. The response was positive and the relevant tenders are now being evaluated. It can show that EcoPark remains appealing to the recycling industry. The EPD will conduct tendering exercise for the remaining site of about 0.9 ha in due course.
(2) The average rent of EcoPark is about HK$2 per square foot. With the current occupancy rate at 90 per cent, the total monthly rental income of EcoPark is about HK$1.9 million. Meanwhile, the EPD employs a contractor for managing EcoPark. The contractor is responsible for daily operation and maintaining common facilities (including 8 berthing spaces at the marine frontage, weighbridge, road network, visitor centre, administration building); providing 24-hours surveillance camera monitoring and security services; managing the traffic within EcoPark to avoid obstruction; providing guided tour services and the related promotion and education services; managing EcoPark website and an online booking system to provide the latest EcoPark information to the public; assisting the EPD to conduct tendering exercise of EcoPark lots and conduct market sounding exercise; providing various support and advice to tenants and assisting them to communicate with government departments and to liaise with public utilities companies for applying the services; facilitating the collaboration between the tenants and promoting their businesses (e.g. participating in EcoExpo Asia to promote the tenants' businesses, organising the Friends of EcoPark scheme to promote collaborative partnership among the public/private sectors and the recycling industry, providing the recyclables to EcoPark tenants or adopt their products, encouraging waste reduction, reuse and recycling). Over 200 companies and organisations (including restaurants, hotels, shopping malls and property management of residential buildings) have become 2022 Friends of EcoPark. In addition, the contractor is responsible for implementing the environmental management system to monitor and audit environmental performance of the tenants according to the environmental measures stipulated in the Environmental Permit issued under the Environmental Impact Assessment Ordinance (Cap. 499). The management fee of the contractor is about HK$1.7 million each month.
(3) The promotion of local waste recycling forms an integral part of the waste management strategies of Hong Kong. Certain recyclables such as ferrous and non-ferrous metals are always in great demand with high market prices, thus their recycling outlets and operations in Hong Kong are primarily run by private recyclers on commercial principles. Led by the market, recycling of waste metals in Hong Kong has been in effective operation with a stable recovery rate of 90 per cent or above.
As for major recyclables that are of low market values but of high proportions in the daily disposal of municipal solid waste in Hong Kong, or waste materials containing hazardous substances that may cause harm to the environment and human health if not properly treated or disposed of, the Government takes the initiative to play a proactive role by introducing a number of measures to enhance the performance of their recycling. Such measures include providing central collection services and expanding the community recycling network for different kinds of major recyclables, as well as implementing producer responsibility schemes for suitable types of waste. These measures help support the operation of the local recycling sector, including EcoPark tenants and other recyclers. Government policies should have due regard for a fair competitive business environment by supporting the industry as a whole instead of favouring individual companies (including EcoPark tenants), or else the efficiency of waste management will be reduced while the overall social costs will increase.
Waste lead-acid batteries (WLABs) are hazardous wastes subject to regulation under the Chemical Waste Control Scheme. The Scheme imposes comprehensive and strict "cradle to grave" control on the generation, storage, collection, transport and disposal of WLABs, aiming to ensure the proper management and disposal of WLABs in an environmentally friendly manner, thereby facilitating the development of a local circular economy for WLABs. In Hong Kong, there are several licensed private recycling facilities, one of which is a lead-acid battery recycling centre set up in EcoPark, providing services such as the collection, preliminary treatment and recycling of WLABs. To further support the relevant industries on the recycling of waste battery, the Government has banned the disposal of WLABs at landfills since 2020.
Currently, some of the waste vehicle tyres generated in Hong Kong are delivered to local recyclers for production of retreaded tyres or extraction of metals and rubber materials for recycling. The Highways Department is exploring and assessing the feasibility of the application of rubberised bitumin in Hong Kong, in an effort to open up other local recycling options for waste tyres. A tenant in EcoPark also plans to increase its recycling capacity for waste tyres. We are considering the formulation of producer responsibility schemes for products like vehicle tyres and lead-acid batteries, and are planning to implement these schemes based on market-based model. This will allow stakeholders such as suppliers, retailers, collectors and recyclers to play a more active role in the schemes, with a view to achieving more efficient and cost-effective recycling arrangements.
As regards the collection of food waste, the Government has been transforming food waste collected to renewable energy at the Organic Resources Recovery Centre Phase 1 (O‧PARK1) in Siu Ho Wan of North Lantau and the Food Waste/Sewage Sludge Anaerobic Co-digestion Trial Scheme at the Tai Po Sewage Treatment Works. At the same time, to promote the recycling of food waste, the EPD extended the scale of the Pilot Scheme on Food Waste Collection in 2021 by rolling out four collection service contracts in phases to provide point-to-point food waste collection services at relatively clustered public and private premises generating larger quantities of food waste, with a view to reducing the transportation cost. The first two contracts which mainly cover the Hong Kong Island, Kowloon and Islands District have been commenced to provide the collection service; while the remaining two contracts serving the New Territories are expected to commence in March 2023.
(4) The EPD has been flexibly determining the area of the site for leasing according to market demand, which facilitates the entry and operation of different types of recyclers. In addition, when evaluating tenders, the EPD will also consider recyclers' recruitment plans, including the number of jobs created and the measures taken to recruit technical personnel, as one of the considerations in calculating the technical scores of tenders. The overall technical score of the tender documents accounts for 70 per cent to encourage recycling companies to develop advanced and value-added recycling technologies, rather than aiming at the highest price.
(5) EcoPark offers the trade with long-term and stable land lease at an affordable rental cost, together with a whole package of basic utilities, to help reduce the expenditure of tenants and thereby encouraging them to invest in and adopt more advanced technologies and treatment processes. With these supports, EcoPark tenants can design and build recycling facilities and workshops suitable for their development needs in response to their specific business requirements.
Regarding the proposal on constructing a multi-storey building in EcoPark to facilitate the operation of smaller recyclers with fewer specific requirements for their factories, the EPD will proactively explore the availability of suitable location in EcoPark and, if so, the feasibility of the proposal. We will also invite development proposals from the local recycling sector to further enhance the support rendered by EcoPark to the industry.
(6) The recycling industry in Hong Kong involves various stakeholders engaging in different businesses, ranging from collecting and exporting recyclables to offering downstream treatment facilities and services. Premising on maintaining a fair competitive business environment, the Government's overall policy is to develop the local recycling industry with the aim of relieving the burden on landfills and fostering a circular economy for recyclables. EcoPark tenants are all engaged in local recycling businesses and hence enjoy competitive edges in the rental payable, the term of use of land and the infrastructure available, as compared with recyclers engaging in the business of exporting recyclables. Furthermore, all regulated wastes to be exported from Hong Kong have to obtain permission from the authorities of the exporting/importing places in accordance with the requirements of the Basel Convention, and have to be transported to facilities recognised by the Government for proper handling. When the Government implements various producer responsibility schemes, priorities will be given to local stakeholders (such as suppliers, retailers, collectors and recyclers) to play a more active role so long as it is more cost-effective to do so.
Ends/Wednesday, February 15, 2023
Issued at HKT 12:43
Issued at HKT 12:43
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