¡¡¡¡With the Mainland's overall foreign trade slowdown and the Pearl River Delta (PRD) economic restructuring, Hong Kong Port's container throughput has showed slower growth in recent times. Under the new situation, a more pragmatic attitude is needed, and the necessity of No. 10 Terminal's construction is still controversial.
¡¡¡¡The development of Hong Kong Port is now under significant threat. Being surpassed by Singapore Port, Hong Kong was the runner-up in the global container ports in 2005. After that, Hong Kong Port was exceeded by Shanghai Port in 2007, and now ranks third among international container ports. In the first five months of 2008, Hong Kong Port container throughput year-on-year increase was only 4.8%, while Singapore Port's throughput increased as much as 12.08%, widening the gap between the two ports' cargo volumes.
¡¡¡¡Since the beginning of the 21st century, Hong Kong Port has slowly increased its container throughput, with the growth rate falling far behind other major container ports in PRD. In the same time, through the PRD ports, Hong Kong Port has suffered a serious decline in market share.
¡¡¡¡In the face of these difficulties, many experts have offered suggestions to promote the sustainable development of Hong Kong Port. Among the various measures, whether to build the No. 10 Terminal has become a rather controversial issue. Generally speaking, the Government and the media lean towards starting the project as soon as possible. But many companies believe that it is unnecessary, given market trends. Li Ka-shing, chairman of Cheung Kong Group, has publicly said that there is no need to construct No.10 Terminal within the next 20 years. As a response, Zheng Ruhua, Hong Kong Transport and Housing Secretary, has said that this view is not keeping with Hong Kong's long-term planning. The existing utilisation of Kwai Chung Container Terminal is nearly 90%, and the additional berths are needed for the potential demand. Therefore, she argues, the No. 10 Container Terminal should finalise a site choice as soon as possible, in order to enhance shipping competitiveness.

¡¡¡¡This author believes that if cargo losses because of inadequate terminal capacity are possible, the construction of the terminal may help cargo flow reunification. However, if the cargo losses have nothing to do with terminal handling capacity, it is a waste of resources to build the No.10 Terminal.

¡¡¡¡Market share fell

¡¡¡¡In recent years, Hong Kong Port container throughput has grown slowly. Thanks to the State's macro-economic control policy, in PRD the export processing industry is unceasingly upgrading and developing into a highly sophisticated industry. With reductions in the quantity and bulk of goods exported, freight demand decreases. And the industry which cannot be upgraded will be either washed out, or forced to relocate. All of these lead the growth rate of processing trade in PRD to drop rapidly, and induce reductions containerised cargo volumes. At the same time, new container ports are emerging one after another, resulting in a decline in Hong Kong Port's share in the PRD market. It is for these reasons that Hong Kong Port container throughput has grown slowly, and is likely to slow further.
¡¡¡¡Under such circumstances, it should be said that Hong Kong Port handling capacity is now fully able to meet the cargo demand, so the theory of expanding the port to attract cargo flow would seem unfounded.

¡¡¡¡Calculation of capacity much lower

¡¡¡¡At present, the Kwai Chung Container Terminal is not close to capacity utilisation. In 2007, the terminal had completed 17,322 thousand TEUs, with the average of 722 thousand TEUs per berth. According to the Hong Kong Port Development Council, the handling capacity of the 24 deep-water berths in Kwai Chung Container Terminal is 19 million TEUs, with the annual handling capacity of each berth at 792 thousand TEUs. The utilisation rate was as high as 91.2%, which was much overloaded, as Zheng Ruhua said.
¡¡¡¡In fact, however, there was no congestion in Kwai Chung Container Terminal in 2007, and it operated normally. The utilisation rate was too high, because the calculation of the handling capacity by Hong Kong Port Development Board was low. Hong Kong Port has always been world-famous for its efficiency, and the original U.S. Line Sea-Land (now operated by Dubai World business) has had throughput capacity over 1 million TEUs per berth for several years. Three of Shanghai Pudong International Container Terminals Limited berths completed 2.702 million TEUs in 2007, with an average throughput capacity of 900 thousand TEUs per berth. Five of SIPG Zhendong Container Terminals berths in 2007 handled 5.652 million TEUs, with the average of over 1 million TEUs each berth. This shows that the calculation of the handling capacity of container terminal by Hong Kong Port Development Board was low.
¡¡¡¡The main operators of Kwai Chung Container Terminal believe that the real constraint of Kwai Chung container port throughput capacity is mainly due to inadequate storage yards. Increasing storage yard capacity can significantly improve the throughput capacity of Kwai Chung container port. This is the theory behind Li Ka-shing's suggestion that Hong Kong has no need to build the No. 10 Terminal.

¡¡¡¡Business potential of the River

¡¡¡¡In addition, Kwai Chung Container Terminal is not the only available place for handling container ships. River docks and mid-stream operations have considerable ability. During 2007, river docks and mid-stream operations achieved 6.677 million TEUs, having peaked at 8.559 million TEUs in 2004. This means that at least 2 million TEUs of capacity can be used. According to regulations, river docks cannot operate ocean-going vessels, and the handling capacity of river docks is thus yet to be realized. If river docks are allowed to handle ocean-going vessels, not only will Hong Kong Port throughput capacity be increased, competition within the port will also be promoted. It would be good for the Hong Kong Port's sustainable development.
¡¡¡¡If expanding area of the Kwai Chung Container Terminal, it would be up to 24 million TEUs, with each berth handling 1 million TEUs. If river docks and mid-stream operations can be fully used, capacity would reach to 9 million TEUs. The throughput of Hong Kong Port is 33 million TEUs presently. With a 3% year-on-year increase this alternate strategy would provide for 3% growth in Hong Kong Port's container throughput until 2017.