Monday, 17 August 1998

Agreement Reached on Development of Container Terminal 9

The Financial Secretary, Mr Donald Tsang, welcomed the commercial agreement reached between Asia Container Terminals (ACT), Modern Terminals Limited (MTL), and Hongkong International Terminals (HIT) on the detailed development arrangement for Container Terminal 9 (CT9).

"We have concluded our negotiations with the consortia on the basic terms of the land grants for CT9 sometime ago. The confirmation by the consortia that they have reached full agreement on all the outstanding commercial issues means that we will be able to sign the land grants and hand over the site to the consortia to begin construction once the documentation work is completed. This we expect will take place in early October," he said.

"The construction of CT9 is important to Hong Kong not only because it will provide sufficient capacity to meet the long term demand of our container port, but it will also enable us to rationalise the allocation of the terminals at Kwai Chung," the Financial Secretary said.

"Following the rationalisation of the berths as part of the CT9 deal, there will be more contiguous berths at Kwai Chung, giving the operators more flexibility and capability to handle the larger and larger container vessels being built by the international shipping lines.

"CT9, therefore, is a very important part of our port development strategy to maintain our competitiveness and strengthen our position as an international container hub port," he said.

"The construction of CT9 will create over 1500 jobs. The actual number will be more as there will be many new employment opportunities created in those trades which operate around the container terminal, such as container lorry drivers, container depot operators and barge operators etc."

"The consortia plan to invest over HK $10 billion in the project in the next five years. These are very major companies with a long history and a lot of experience in Hong Kong. Despite the difficulties we are facing at the moment, the agreement on CT9 is a clear demonstration of these companies' commitment to Hong Kong and their confidence in the long term prospect of our container port and economy," the Financial Secretary added.

The Chairmen of the three companies, Mr Canning Fok of HIT, Mr Gonzaga Li of MTL and Mr William Flynn of ACT handed a joint letter to the Financial Secretary on Friday (August 14) confirming that they have reached full agreement on all the commercial issues relating to the joint development of CT9, including a commercial agreement between MTL and ACT on the swap of the two MTL berths at CT8 with ACT's two berths right in CT9.

The Financial Secretary said, "These are very complicated and technical negotiations. I am very pleased that the parties have put in their best efforts to conclude these agreements."

The consortia will be required to form 140 hectares of land along the east side of Tsing Yi Island and will be granted 70 hectares for the construction of CT9. The remaining area will be handed back to the Government for the provision of roads and container backup facilities to address the overcrowding problem in Kwai Chung.

The new terminal will have six berths and a design capacity to handle 2.6 million twenty-foot equivalent units (TEUs) of containers a year and will be able to cope with forecast growth in demand of the Hong Kong Container Port until the early 2000s.

Construction work will begin in late 1998/early 1999. The first berth of the new terminal is expected to come into operation in late 2001. The remaining berths will come into operation at five/six months intervals thereafter. The timing is in accordance with the forecast requirements of the Hong Kong Port and Maritime Board.