Waters Economics has provided a response to the Lantau Development Public Engagement Digest, an ambitious vision put forward by the Development Bureau and LanDAC to transform Lantau Island into a new metropolis and a major hub serving the PRD.

Whilst we applaud the overall vision and focus on economic development, we are concerned about the lack of analytical evidence to substantiate the vision.

The medium term targets for employment are very ambitious. By 2030 it is estimated that there will be about 280,000 employment opportunities on Lantau, more than four times the current number. On average over the past 15 years in Hong Kong, there have been 35,000 additional persons employed every year. The 2030 jobs target for Lantau means that for the next 15 years, one in three additional jobs will need to be located on Lantau. The Digest makes no attempt to substantiate this estimate.

There appears to be no analysis of the dynamics of Hong Kong’s economy or employment in the planning process. What type of businesses would locate in Lantau and why?

The largest draw for Lantau is its access to the PRD and the location of the Hong Kong International Airport (HKIA)
The total number of persons engaged in Hong Kong is 2.6 million. Currently, for every 100 residents in Hong Kong, there are 37 persons engaged. The equivalent number estimates for Lantau in the medium term is 87 and in the long term 67, i.e. the number of jobs to residents is very high

If the targets are realised, what will be the impact of the additional jobs on transport infrastructure? Currently only less than 20% of people who live in the Islands District, work in the same district. HKIA has major problems recruiting and retaining staff; if people living in Lantau commute to the urban area for work, will the transport system will be able to cope?

Without a detailed analysis of demand and a comprehensive strategy on how to attract businesses to locate on Lantau, this employment target to 2030 is unsubstantiated. We have seen these over optimistic employment estimates in Hung Shui Kiu and we see it again here in Lantau. We urge LanDAC to task the government to consider the economy and employment in a thorough and responsible manner in developing strategic plans.

We also note the long term focus on the East Lantau Metropolis. We are concerned that there appears to be no justification as to the need for a third central business district (CBD) and no alternatives considered. The cost of infrastructure will be very high, as will be its environmental impact. The critical mass required to make this work would require a dramatic shift in the population and business location dynamics in Hong Kong. The problem with such a location is that it is all or nothing. It requires enormous investment, yet if the demand is not forthcoming then it is very difficult to build less or more slowly and still have enough critical mass to function effectively. We urge the government to firstly outline the need and demand for a major new urban area and then consider sensible alternatives.

Finally we urge LanDAC to carefully consider the role of the HKIA in the economy and the needs of the airport and airport related industries in terms of land. The airport is a strategic piece of infrastructure and the opportunity cost of using land next to the airport for housing should be carefully considered.

Main image courtesy of LanDAC and a copy of the Lantau Vision document can be downloaded from http://www.landac.hk/en