Hong Kong

Hong Kong´s 2008 budget injected an additional HKD 5.6 billion (C = HKD 6.1) to previously-announced funding of 32.1 billion for ten major infrastructure projects. Once completed, these projects are expected to boost GDP by 7% per year and alleviate inflation through enhanced productivity. While centred on rail, roads, and bridges to handle the ever-growing traffic to Macao and the mainland, they also include a new multi-purpose district on reclaimed land in West Kowloon (including the city´s tallest building) as well as the relocation of several government ministries off of Hong Kong Island – intended to relieve astronomical rents in the central business district.

The HKSAR Government has decided to speed up implementation of the following infrastructure projects over the next 24 months :

• The long awaited Hong KongZhuhaiMacauBridge has finally received a green-light and construction will commence in late 2009. The 34-km bridge is estimated to cost C7.8 billion. Design and construction of the main bridge body will be led by a joint committee based in Guangzhou.

• Tuen Mun Western Bypass and Tuen-Mun Chek-Lap Kok Link will provide a link between Shenzhen, the north west section of the NewTerritories and the airport at Chek Lap Kok in LantauIsland. The project is estimated to cost C 2.5 billion.
  
  
• Central Kowloon Route will provide a short-cut between West & East Kowloon and construction work is expected to commence in late 2011/early 2012.

Rail is also a key area of growth in Hong Kong and Macao. While construction of MTR's West Island Line is in progress, it is expected that permission will be granted for the long discussed 7-km South Island Line which costs about C900million. MTR (HK's subway operator) is also making some detailed adjustments to the Shatin to Central Link. It is expected the final alignment will be concluded by this summer, and construction can be inaugurated before the end of 2012.

The Macau SAR Government has also decided to build a new 24-km Light Rail Transit (LRT) system. Official tenders will announced once a project consultant is appointed in March, 2009.

These on-going projects present business opportunities for construction and engineering firms, rail and mass transit manufacturers, and intelligent transportation systems (ITS) companies. MTR has noted that there is insufficient local engineering and other specialist capacity to handle these ambitious expansion projects, and have approached Canada and other countries to help. 

Challenges

• Many of the above mentioned rail projects have been discussed for years. Key competitors have already been providing rolling stock to MTR. Canadian companies may have a hard time to compete against them. Given the current strong presence of local competitors, advocacy efforts with local decision makers will be important.
• The Chinese Authority will be the key decision maker for cross border infrastructure projects like the Hong Kong-Zhuhai-Macau Bridge. The bidding, tender and evaluation process will be quite different from the current practice in Hong Kong.