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            december 14, 2019

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HK needs a centralised port authority


Hong Kong's 50-year-old Kwai Tsing Container Terminal, which has undergone successive expansions nearly every decade since it was completed in the 1970s, needs to be managed by a centralised port authority, according to experts.
The terminal, which at present can deal with 24 cargo ships berthed simultaneously, is facing rising competition from other logistics and port operators around the region.
Unlike other ports in the region, Kwai Tsing's facilities are shared among five independent operators, a system that is "quite unusual" for the region, according to Professor Collin Wong Wai-hung, a supply chain and logistics expert at Hang Seng University in Sha Tin, Hong Kong.
He pointed out that Singapore has a single operator in the form of the Port of Singapore Authority, which could help to explain its rising throughput volumes, whereas Kwai Tsing is the only port in the top five globally to lose traffic in the four years to 2018.
Roberto Giannetta, executive director of the Hong Kong Liner Shipping Association, said Hong Kong has to take aggressive action to deal with declining volumes, particularly in transshipment trade.
"Without a port authority, Hong Kong cannot compete on the same footing [as other ports]," he said.
He noted the failure of local government departments to work together on port issues, citing the six-year failed effort to relax air draft restrictions at the Tsing Ma Bridge, which limits larger ships from traversing Hong Kong waters, according to the the South China Morning Post.
Hong Kong's share of the transshipment business could face further pressure due to the trade tensions. Drewry, a UK maritime consultancy, has reduced its total container throughput growth forecast from 3.9 to 3 per cent for 2019, citing US-China trade war concerns, global instability and new emissions regulations affecting the shipping industry.
About 70 to 75 per cent of Kwai Chung's container business involved transshipments, compared to about 90 per cent in Singapore, according to Dr Wong.
Hong Kong's competition watchdog has opened an investigation into whether a new 'super alliance' between four of the five operators at the Kwai Tsing Container Terminal breaches antitrust regulations.
The Hong Kong Competition Commission has promised to investigate claims by trucking associations that the alliance will lead to a port operator cartel.
But Dr Wong defended the Seaport Alliance as a "reasonable move", saying that Hong Kong had to compete with Shenzhen on port on efficiency and cost.
Alan Lee Goldstein, a marine engineer and planner who helped design container ports for SeaLand, said Hong Kong needs a port authority similar to that of New York and London. "It needs to be somewhere between public and private [in operation], like the MTR," Mr Goldman said.
Mr Giannetta said: "If we continue to lose cargo throughput and shipping companies' regional offices, we will not be able to attract those other peripheral maritime services."
He said shipping agencies such as CMA CGM and the Japanese shipping conglomerate ONE have recently established regional headquarters in Singapore instead of Hong Kong.
"Hong Kong cannot rely on its historic presence as the No 1 container port in the world to retain its position in the future. Hong Kong is no longer a must-call port," said Mr Gianetta.

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