Development of a New Cruise Terminal for Hong Kong

DEVELOPMENT OF A NEW CRUISE TERMINAL FOR HONG KONG

Enhancement of Kowloon permAnEnt pier no. 7

December 2005

An Executive Summary of The Wharf Group Proposal

EXECUTIVE SUMMARY

INTRODUCTION

On 3 November 2005 the Tourism Commission of the Hong Kong SAR Government invited interested parties to submit Expressions of Interest (“EOI”) for the development and subsequent operation of cruise terminal facilities in suitable locations within Victoria Harbour that would be capable of meeting the current cruise terminal needs of Hong Kong and that could be completed within a shorter timeframe than the currently designated site at Kai Tak.

PROPOSAL

The Wharf Group, the Proponent, submits this Proposal to build an international cruise terminal on the site of the existing Kowloon Permanent Pier No. 7 (KPP 7) at Kowloon Point, the waterfront area between the Star Ferry and the China-Hong Kong Ferry. It believes that Kowloon Point and its hinterland represent the optimum location for the provision of additional berthing facilities and that, with the benefit of these new modern facilities as outlined in this Proposal, it would be both superior, and a potential natural complement, to the Kai Tak site, were that site to be developed at a later date. The Proponent considers that the new pier together with the existing facilities at Ocean Terminal would provide Hong Kong with an integrated International Cruise Centre capable of responding to the present and future needs of the cruise industry.

This Proposal complies with all but one of the requirements of the EOI, namely the requirement that the selected site is to be put to tender. Given the special circumstances of the proposed new terminal site, which is surrounded by land occupied by the Wharf Group on long lease and cannot be accessed except across such land, the Proponent proposes a Public Private Partnership (PPP) approach. Under such a scenario the seabed required for the extended pier at KPP 7 would remain under Government control but the Wharf Group would be granted, at its expense, the contractual right to build and operate the new cruise terminal for a specific mutually agreeable term, with access across the land occupied by the Wharf Group on long lease only continuing for the duration of the PPP or its extension. The Proponent would also be willing to consider other options sensitive to the special circumstances of the proposed site.

The EOI also states that the proponents must take into account the application of the statutory presumption against reclamation of the Harbour and the Protection of the Harbour Ordinance. Insofar as the issue of reclamation is concerned, this Proposal does not require the formation of new land. It relies on the construction of a pier structure supported by piles and the piling work would employ pollution-control construction methodology.

THE SITE

The site of the proposed international cruise terminal under this alternative approach, KPP 7, is located adjacent to the existing Ocean Terminal, considered by many to be the ideal location within Victoria Harbour for such a facility. Wharf PropertiesLimited is the tenant of KPP 7 while Wharf Realty Limited is the current leaseholder, and its associated company, Harbour City Estates Limited, is the operator of Ocean Terminal, Hong Kong’s only existing cruise terminal. Ocean Terminal has served as a port of call and a home port for cruise vessels under 50,000 tonnes (displacement weight) for almost 40 years and this Proposal, involving the enhancement of the existing KPP 7 to create a new international cruise terminal, would expand that role by providing berthing for the new generation of ships of up to 80,000 tonnes (displacement weight).

THE LOCATION

The site is located in the heart of Tsim Sha Tsui, a key tourism district served by world-class infrastructure and some 15 first-class hotels. These tourism assets are essential elements of a successful international cruise centre location. In addition, the site is adjacent to West Kowloon and the cultural and entertainment facilities that will be constructed there and also the Kowloon Airport Express Station, providing check-in facilities and direct, fast access to Chek Lap Kok Airport for those passengers wishing to join or leave their cruise in Hong Kong by air. The site is also within 500 metres of the Star Ferry and close to MTR and KCR stations for those wishing to visit other parts of Hong Kong and Guangdong.

A Recognized and Mature Cruise Hub

• Tsim Sha Tsui already boasts a comprehensive infrastructure framework supported by established tourism facilities – an extensive range of five-star and other hotels, world-class shopping, an excellent public transport system, an efficient road network, good pedestrian accessibility and well-established ship chandling and husbandry services. It also has other tourism attractions (i.e. the Harbour itself, the Cultural Centre, the promenade and Avenue of Stars, among others). It would take many years to reproduce these assets elsewhere and would involve major investments not required here.
• This project requires no new investment in new public infrastructure works. The infrastructure is already in place to support the new pier that will become part of the proposed international cruise centre. This means there would be significant savings in public resources at this site compared with other possible locations.
• Minimum new pier development would be required to provide attractive ancillary facilities for incoming tourists and local visitors and to create a world-class facility capable of accommodating a range of cruise vessels.
• Operational synergy through the creation of an International Cruise Centre would permit judicious allocation of berths in the same locality for different classes/sizes of cruise ships.

THE DESIGN

The low rise but striking design of the new pier would make use of the excellent existing retail and hotel infrastructure in Kowloon Point to connect the new facility to the heart of Tsim Sha Tsui. However, the terminal at KPP 7 would be an entirely new structure, comprising a pier and terminal facilities, with leisure attractions, such as a nautically themed lifestyle gallery restaurant and other food and beverage outlets, all designed to project a welcoming and enduring impression of Hong Kong. The unique design of the proposed cruise terminal will enhance the harbour and be a symbol of urban design excellence and will also adhere to the Harbourfront Enhancement Committee’s harbour planning principles.

KPP 7 has been designed to provide berthing on both sides of the pier, one side for a mega vessel and a second side for a smaller-sized ship. As a result, KPP 7 and Ocean Terminal, which would together form the proposed Hong Kong International Cruise Centre, offer both a medium- and long-term solution to Hong Kong’s cruise terminal needs. This cruise centre would be able to accommodate, at the same time, one mega vessel of up to 80,000 tonnes, one large-sized ship of up to 50,000 tonnes, and between one and three medium-sized ships. Other combinations of ship sizes could also be accommodated by these very flexible facilities. Positive synergy would also be generated for shipping lines and supporting activities (Immigration, Customs and Security, and ship chandling) by the expanded capacity of berths and other resources.

THE PLANNING

KPP 7 is currently zoned as “Other Specified Uses (OU) – For ‘Pier’ Only” in the Tsim Sha Tsui Outline Zoning Plan No. S/K1/21. As such, it would be necessary to submit an application for amendment of the plan under Section 12A of the Town Planning Ordinance to revise the Outline Zoning Plan to cover the entire enhancement of KPP 7 and re-zone it “OU – For Cruise Terminal and Ancillary Facilities Only”. Gazettal will also be required under the Foreshore and Seabed Ordinance and the Immigration Ordinance.

The plan for the proposed new terminal at KPP 7 will not affect any existing public waterfront land nor will the development reduce existing public facilities. On the contrary, in addition to responding to a known economic need, it will provide new and exciting harbourside leisure and entertainment facilities for both the local community and incoming tourists and other visitors. The volume of the structure is regarded as appropriate to the location and the height of the terminal has been limited to three levels (except for the themed lifestyle gallery/restaurant at the far end of the pier). There will be no intrusion into the fairway except during the turnaround of mega ships such as the Queen Mary 2.

THE PROTECTION OF THE HARBOUR ORDINANCE

The Proponent recognises the importance of the Protection of the Harbour Ordinance and the need to satisfy the “overriding public need” and other tests. In this regard every effort has been made to minimise the footprint of the enhanced KPP 7 and the extent of the pile foundations. As to the compelling and present need, Government itself regards the expansion of Hong Kong’s cruise capability as an essential element of the city’s economic and tourism infrastructure and KPP 7 is considered to be the optimum location within the confines of Victoria Harbour.

Minimal Reclamation and No Land Fill

• There will be no land fill. Only marine piles would be involved in this project
• Stringent piling and construction methodologies would be employed to avoid marine pollution
• No displacement of existing public waterfront is involved
• Existing surrounding waterfront is already occupied by finger piers
• KPP 7 enhancement would actually afford the public the opportunity to enjoy more waterfront

THE CORE FACILITIES

The core facilities to be provided include all necessary landside accommodation and ground transportation areas, including provision for check-in, Customs & Excise, Immigration and health control, together with tourist- and entertainment-related facilities, including a lifestyle gallery/restaurant. This willensure that the enhanced KPP 7 willnot only be a truly international cruise terminal but also a world-class attraction.

THE IMPLEMENTATION

The implementation of the entire scheme is expected to take forty five months at a total cost of some HK$680 million with annual operational, maintenance and servicing costs estimated to be HK$45 million. There may be an opportunity to reduce regulatory and approval processing time if the Government can support a fast-track approach.

THE TECHNICAL STUDIES

Full details of the proposed works and facilities are set out in the Technical Appendix accompanying this Proposal and the consultants are confident that the proposed scheme is capable of complying with all technical and regulatory requirements. In particular, the initial Traffic Impact Assessment concludes that the proposed new facilities are acceptable from a land traffic perspective while the parking provided within the new terminal would assist with traffic management in the vicinity.

WHY IS KPP 7 THE IDEAL LOCATION?

KPP 7’s central location and excellent accessibility, the fact that its development, together with the existing facilities at Ocean Terminal, would create at Kowloon Point an International Cruise Centre worthy of Asia’s world city, the fact that it enhances the range of the city’s waterfront attractions and the fact that it represents a fast and cost-effective option for the Government and the Proponent are all key to its consideration as the site for this new cruise development. Furthermore, the cruise terminal operational experience of the Proponent cannot be matched by any other organisation in Hong Kong.

In addition:

• The proposed International Cruise Centre will create new direct and indirect jobs/employment opportunities in the construction and operational phases
• The opportunity cost of converting KPP 7 into a new cruise terminal is low as it is now under a short-term lease for carpark use
• The Proposal is not contingent upon supporting property development and the commercial uses envisaged on the pier are focused on food and beverage and limited to 5,465 square metres.

KPP 7 offers a medium, and possiblya long-term solution to Hong Kong’s cruise terminal requirements and, given the existing well-established infrastructure, it can be completed in advance of any similar facilities proposed for Kai Tak, and at a substantially lower cost, while affording a significantly more accessible and exciting destination for all cruise passengers, whether local or from overseas.

It is for these reasons that we hope that this proposal will be given due consideration. It represents a very sound and sustainable approach to meeting the current and future requirements of the domestic and international cruise industry in Hong Kong and, as such, can play an important role in ensuring that Hong Kong becomes one of the world’s leading cruise centres.

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