Tsang should spare us his concrete suggestions
SCMP October 8 2008
'Penny wise, pound foolish' is as charitable a description as could
be put on the spending habits of the concrete-headed Tsang government.
But there seems limited chance that the new Legislative Council will
provide much of a brake on an administration which displays Scrooge-like
meanness to the old but will happily commit billions of dollars of
public money to projects that sound nice or are politically expedient,
without any regard to their economic viability.
Chief Executive Donald Tsang Yam-kuen, whose knowledge of commerce
seems to have been learned in the 1960s police environment in which
he grew up, is adept at following the Soviet economic model of spending
public money on building monuments rather than investing in viable
projects or improving residents' quality of life.
The latest example is the Kai Tak giant cruise terminal which, unless
legislators have the sense to reject it, will cost at least HK$7 billion,
excluding the value of this prime land - another few billion dollars.
Developers have walked away from the project, having studied the demand
and likely rate of return. A government that, for 11 years, has been
unable to decide on any projects for the site is now rushing to spend
on one that combines the worst of all worlds: the occupation of one
of Hong Kong's last prime harbourside sites and a lack of any detailed
We are told the cruise industry wants it - not whether it is prepared
to pay an economic price. Though the terminal might not be commercially
viable, it is 'necessary for the economy'. But the government's figures
- HK$2.5 billion of economic benefit per year - are as bogus as those
used to justify Disneyland.
A few thousand cruise passengers a year, who spend most of their money
on board, not in hotels and restaurants, do not add up to economic
justification. Instead, look to the special pleading of the cruise
and tourism groups that sit on untransparent consultancy panels.
We are told that we must have one because Shanghai and Singapore will
have one and maybe Shenzhen, too. As for Shenzhen and other nearby
mainland cities, a vast oversupply of ports is already looming.
Which brings us to the matter of the Macau-Zhuhai bridge, another
project supposed to have been privately financed but now to be shouldered
by governments. Why? At least partly because Pearl River Delta port
expansion means that there will never be a container terminal on Lantau.
But, the bridge is politically expedient, as well as providing work
for contractors - like the even more useless Stonecutters bridge now
Next on Mr Tsang's list of wasteful, politically driven projects is
the HK$30 billion Chek Lap Kok-Shenzhen airport rail link. A Chinese
University study shows that, even at HK$400 a trip, the rate of return
would be tiny. But do not expect that to get in the way of a government
frittering away reserves on monuments rather than returning them to
where they belong - the people.
However, do not expect Legco to do much. The Democratic Alliance for
the Betterment and Progress of Hong Kong's Chan Kam-lam is justifying
the cruise terminal as 'a confidence boost in the face of the financial
tsunami'. The Civic Party's Ronny Tong Ka-wah, for some unspecified
reason, thinks it is 'appropriate' for the government to build it.
Claims are made for this, as for other public works projects, on the
grounds of job-creation, as though spending the money in other ways
would not do so. This is not about job creation. Like Japan's massive
spending on six-lane highways in remote countryside, it is about ruling-party
politics and special interests, two things Mr Tsang understands.
Mr Tsang has obviously learned nothing from the previous multibillion-dollar
government-sponsored investment disasters over which he has presided
- Cyberport, Disneyland, the West Kowloon Cultural District and the
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