Wednesday, 20 May 2015

Multi-pronged strategy to tackle land shortage

Financial Secretary John Tsang

It is my great pleasure to join you all today for the Annual Conference of the Royal Institution of Chartered Surveyors Hong Kong, highlighting the theme "Building Hong Kong's Capacity for Sustainable Growth - What can be done to stay competitive?" There is one word in this year's theme, in particular, that has caught my attention.

 

That word is "capacity", and the basic definition of this meaningful word actually goes all the way back to the Middle Ages. It is defined as "the maximum amount that something can hold or produce".

 

In Hong Kong, that "maximum" is restricted by our size; in area, we count just around 1,100 square kilometres. While the built up area accounts for less than one-quarter of our total land mass, the remaining land resources, I was told by KK and his people in the Planning Department, are mainly woodland, grassland, wetland, barren land, water bodies, country parks, special conservation areas, remote areas, outlying islands, steep slopes and other land categories that are not quite suitable for development.

 

That is the land card that we have been dealt. It is not going to change. We have to work with what we have.

 

That's where the other major definition of "capacity" comes in; and that is "the ability and power to do something".

 

In that regard, Hong Kong is as big, as capacious, as all Asia - and then some. Over the years and decades, the people of Hong Kong have shown that there is little that we cannot accomplish.

 

Today's focus is on creating sustainable growth - on what we can do to stay competitive. And that is what I would like to share with you in the next few minutes.

 

As I said in my Budget Speech earlier this year, I want to capitalise on Hong Kong's strengths, to explore new ideas in ensuring the health of our long-term economic development.

 

Land shortage is a long-standing issue in Hong Kong. It is a major constraint which adversely affects our economic competitiveness. To overcome this hurdle that is standing in our way, we are pressing ahead with a multi-pronged land-supply strategy.

 

Maximising land use

We are maximising the use of the limited land supply that we have by taking forward ambitious land-use planning and development projects that include the Kai Tak Development and the West Kowloon Cultural District in the urban area, as well as the North East New Territories New Development Areas, the Hung Shui Kiu New Development Area and the Tung Chung New Town Extension in the rural area. Just to mention a few.

 

We have applied co-ordinated planning to these large-scale projects, each involving tens to hundreds of hectares of land, striking an optimal balance between increasing land supply for residential and economic activities as well as improving the quality of the urbanised environment.

 

Apart from large development areas, we are also reviewing the planning intention of individual sites to allow more beneficial uses that better meet community priorities. These include sites of obsolete government premises, deserted or de-vegetated green belt sites and under-utilised industrial buildings.

 

Through these intensive search exercises, we have identified more than 60 sites that are suitable for residential use. After the statutory rezoning process that could take some time, they provide a total area of over 100 hectares, capable of producing more than 55,000 residential units. We are continuing with these efforts.

 

In addition, Kowloon East is now transforming from an industrial district into another core business district. It has the potential to supply office floor area of four million square metres, which is twice the current size of Central. Major commercial and retail nodes will also be available in the Kai Tak Development, and the North Commercial District on the airport island.

 

Given the scarcity of land supply in Hong Kong, we should make full use of land available. We are seeking to increase development intensity of individual sites, taking into consideration practical needs such as traffic capacity, environmental, visual and air ventilation impacts of the neighbourhood.

 

All these aside, as a long-term vision, the Government is studying the feasibility of the East Lantau Metropolis concept. Geographically, it is close to our central business district on Hong Kong Island. More than locational advantages, it boasts strategic transport infrastructure. Indeed, it has the potential to rise as a new urban centre for the future.

 

Infrastructure investment

You are probably aware that the World Economic Forum's Global Competitiveness Report has ranked Hong Kong first in infrastructure for five consecutive years. We are continuing to invest heavily to upgrade our infrastructure. It is worth noting that when keeping price levels constant, current construction expenditure, which is quite high close to $80 billion this year, is only about 80% of that of the Airport Core Programme era in the 1990s.

 

Our infrastructure, in particular transport infrastructure, is not just an engineering achievement that we should all be proud of. It is also at the centre of our sustainability development strategy.

 

Our high-density developments are mainly connected by railway, which is an efficient, low-carbon mode of public transportation. This greatly reduces the demand for private cars, thereby minimising fuel consumption and emissions. You should not be too surprised to know that Hong Kong, on a per-capita basis, has one of the lowest transportation carbon footprints in the world.

 

The West Island Line is now fully opened. Four other lines are under active construction. When completed, more than 70% of our population will be within the catchment of our railway network. Last September, the Government released its Railway Development Strategy 2014, which provides a blueprint for the further expansion of Hong Kong's railway network.

 

Sustainable development

There is huge potential, too, in sustainable development through the construction of green buildings. To promote green building, the Government is offering developers gross floor area concessions in new buildings - if they incorporate sustainable design elements and provide related information.

 

Benchmarks have been set under the Buildings Energy Efficiency Ordinance. There are also energy-efficiency design standards for key building-services installations. And commercial buildings are required to conduct energy audits.

 

We are leading by example. The Government has released a comprehensive, target-based environmental performance framework for new and existing government buildings. New government buildings with a construction floor area of more than 10,000 square metres must achieve one of the two highest ratings in BEAM Plus.

 

To become "Energy Aware" and "Energy Wise", energy saving will need to have a centre-stage role not only in government policy, but also in how businesses operate and how individuals live.

 

The Environment Bureau has recently published an Energy Saving Plan for Hong Kong's Built Environment which sets for Hong Kong our own target for reducing energy intensity by 40% by the year 2025. It shows our commitment to environmental protection, and to drive energy saving through a combination of measures, especially for buildings and inhabitants, to become highly energy efficient.

 

Beyond some of the specific responses I have outlined so far today, we are also updating Hong Kong's territorial development strategy. And the Director of Planning will tell you more about this - specifically about "Hong Kong 2030 Plus" - in just a few moments.

 

Ladies and gentlemen, yes, we have our fair share of constraints right here in Hong Kong. And we are, indeed, facing a great number of challenges. But I am confident that we do have the capacity to meet our constraints and challenges head-on. Today's conference - and each and every one of you - will, I am sure, help move Hong Kong along towards a prosperous and sustainable future.

 

Financial Secretary John Tsang gave these remarks at the Royal Institution of Chartered Surveyors Hong Kong Annual Conference 2015 on May 21.


Regards,
Otmane El Rhazi
Department of Commerce
Economic Development
Text/Mobile, +44 7414 782 320

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