"Hong Kong 01" earlier exclusively reported the latest development details of "Lantau Tomorrow". The government submitted the latest document to the Legislative Council today (20th), confirming that the construction cost of "Lantau Tomorrow" has risen from the originally estimated 500 billion to 580 billion.
The government emphasizes that the income from the sale of private residential and commercial land on the artificial island is estimated to reach 750 billion yuan. There is no need to rely purely on public spending to push projects forward.
▼The latest concept map of Lantau Tomorrow▼
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The artificial island of Jiaoyizhou is changed to the Y-shaped waterway plan of the three islands.
(Map drawn by Hong Kong 01)
According to the document submitted by the government to the Legislative Council, the government has referred to the land and property transaction prices until November 2022, and then introduced a more conservative market condition assumption. The income from the sale of private residential and commercial land on the artificial island is estimated to be about 750 billion yuan.
In terms of construction costs, if the previously estimated price of RMB 500 billion in September 2018 is adjusted purely based on civil engineering-related indices, the total construction cost of the project in the second quarter of 2022 is roughly estimated to be about RMB 580 billion.
The government pointed out that even with relatively recent market conditions and conservative assumptions, land income is still higher than construction costs, and infrastructure investment can drive economic growth in addition to land income.
After the Kau Yi Chau artificial island is fully developed, the government estimates that the relevant economic activities can bring an added value of about 200 billion yuan per year, accounting for about 7% of the GDP. In addition, the provision of public housing land and strategic transportation infrastructure is also socially beneficial. Economic value, promoting the Kau Yi Chau artificial island project is in line with social and economic benefits.
The construction of the Kau Yi Chau artificial island project will span 20 years from the end of 2025. Roughly speaking, assuming that the project volume is evenly distributed, the average annual expenditure of the project is about 30 billion yuan.
The Government has indicated earlier that the medium-term forecast for capital works expenditure is over $100 billion per annum, and this amount of expenditure (rejoined with the cash flow of this project) accounts for about 4% of the GDP.
The government stated that the entire development is a long-term investment with economic benefits, and believes that it is not necessary to rely solely on public expenditure to promote the project.
In addition to paying from the Capital Works Reserve Fund, the government may also consider adding one or more financing methods, including bond issuance, public-private partnerships including the build-operate-transfer model to build major transport infrastructure, and the railway plus property development model to build railways, etc.
▼Lantau Tomorrow Project▼
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