Hong Kong’s government plans to spend HKD624 billion ($80 billion), equivalent to half its fiscal reserves, to reclaim land for artificial islands that’ll help ease its housing crunch.
The price tag for the so-called Lantau Tomorrow Vision includes costs for reclamation, infrastructure and improving transportation, Michael Wong, secretary for development, said at a briefing Tuesday. More than a third, or HKD256 billion, will go toward building artificial islands spanning 1,000 hectares off Lantau Island.
“Since the proposal has been announced, there has been much concern in the community on whether building artificial islands and related infrastructure would drain government coffers and leave us broke,” said Wong. “We have looked into it and our conclusion is that it won’t.”
The ambitious plan was first pitched by the city’s Chief Executive Carrie Lam as part of her annual policy address last year, when she said the government would realize the vision within 20 to 30 years. Surrounded by water on three sides and mainland China on the other, Hong Kong faces a severe shortage of land supply that has pushed property prices to among the least affordable in the world.
The government would be able to finance the project because costs would be spread out over a long period, Wong said. The Hong Kong Institute of Surveyors estimates that the sale of commercial and residential land in the artificial islands could yield HKD970 billion to HKD1.14 trillion of revenue. The administration had HKD1.2 trillion in fiscal reserves at the end of January.
Hong Kong is stepping up its land reclamation efforts just as Macau is doubling down with its own artificial islands project.
Macau has been a world leader in land reclamation since at least the early 20th century, presiding over a threefold increase in its total land area since 1912. But the last decade has seen an ambitious new leap, with work already underway on six new land zones and studies abound for an 85-square-kilometer sea jurisdiction expanded by the Central Government in 2015.
The six new land reclamation zones, officially known as A, B, C, D, E1 and E2, will reclaim a total area of five square kilometers from the Pearl River, bringing the total dry land jurisdiction to 35.5 square kilometers. DB/Bloomberg