Lantau Vision price tag revealed: $624 billionTop News | Phoenix Un 20 Mar 2019
Lantau Tomorrow Vision will cost HK$624 billion - this is the first time the government has put a figure on the massive reclamation-development project.
The estimate was announced by Secretary for Development Michael Wong Wai-lun at a press conference yesterday. The project will not deplete financial reserves as land sale revenue should cover the costs, he said.
Lantau Tomorrow Vision has two main parts: building a 1,000-hectare artificial island at Kau Yi Chau and another 700-hectare artificial island at Hei Ling Chau. The announcement yesterday focused on Kau Yi Chau.
Development of Kau Yi Chau artificial island is estimated to cost HK$256 billion, including HK$140 billion on reclamation and HK$116 billion on infrastructure.
Reclamation at Sunny Bay and Lung Kwu Tan, as well as the Tuen Mun coastal area development, will cost HK$95 billion.
There will be six rail and road corridors and links to connect the artificial island with Hong Kong Island, Lantau Island, Sunny Bay and New Territories West, costing HK$273 billion.
The figures were estimated on September 2018 prices, but the reclamation will not begin until 2025. The first group of residents may move in by 2032.
The Kau Yi Chau island will provide 150,000 to 260,000 flats - 70 percent public housing. The remaining 45,000 to 78,000 flats would be private housing.
Roads would be ready when residents moved into the artificial island in 2032, but railways might not run until three to five years later.
The total cost of HK$624 billion was more than half of the total financial reserves of HK$1.1 trillion, and even higher than the HK$500 billion a government source said when the Budget was announced last month.
"The HK$624 billion is the first preliminary estimation that we've come up with, subject to future studies, of course. There will be changes up and down," Wong said.
But Wong rejected allegations that Lantau Tomorrow would empty the financial reserves, quoting estimates of the Institute of Surveyors that the revenue from land sales and commercial development would be HK$974 billion to HK$1.14 trillion, if there would be 78,000 private flats.
If there were only 45,000 private flats, according to the Institute of Surveyors, the revenue would still be between HK$707 and HK$823 billion.
He stressed that the revenue estimate was conservative and had not taken into account revenue from the 70 percent public housing and property sales in Tuen Mun.
"Even if the income is reduced by HK$100 billion, it is still worth doing. We never say public projects have to be recompensed by revenue.That's not our policy," Wong said. The most important point of the scheme was to fulfill the needs of society for land and transport.
Costs at Hei Ling Chau were not announced as the plan was not fixed.
Over-budget was another concern in public projects. A recent example was the cost of the Guangzhou-Shenzhen-Hong Kong Express Rail Link, which exceeded by about 30 percent the initial amount applied for from the Legislative Council.
Wong said that only 10 percent of the public works costing HK$30 million or more in the past 10 years were over-budget.
The government would upgrade the current Project Cost Management Office into the Project Strategy and Governance Office in April, to control costs more effectively.
He was not worried about the financing of the scheme as the money would be spent over a period of 10 to 15 years, or only HK$40 billion each year. Past suggestions about issuing bonds for the reclamation were not due to lack of capital, he said.
The government would also apply for HK$500 million for preliminary research for the plan, and the Legco Panel on Development would discuss the topic on Tuesday next week.
Earlier, when Chief Executive Carrie Lam Cheng Yuet-ngor spoke before yesterday's Executive Council meeting, she said she hoped the Legislative Council would approve the HK$500 million as soon as possible.
She believed Wong's illustration of the plan would effectively dismiss public concern.
"Some said we poured money into the sea, meaning it's a waste of money, and we cannot afford some of the infrastructure," Lam said. "We can afford it, and this project has a high return."