Hong Kong’s Northern Metropolis estimated to cost HK$224 billion

A huge scheme to build a housing and business hub along Hong Kong’s border with mainland China, known as the Northern Metropolis, will cost more than HK$224 billion, the government has estimated.

Lau Fau Shan in Hong Kong. File photo: GovHK.

The price tag of the project that seeks to provide more than 900,000 homes for some 2.5 million people was unveiled in the Legislative Council (LegCo) on Wednesday. It was disclosed more than two and a half years since the project was introduced in October 2021 during the last Policy Address of then-chief executive Carrie Lam.

The project calls for an additional 500,000 homes to be built in addition to 400,000 in existing developments which be integrated into the new metropolis. The government also expects the Northern Metropolis to provide around 650,000 jobs when completed.

Secretary for Development Bernadette Linn was responding to questions from lawmaker Andrew Lam on the cost of several development projects linked to the Northern Metropolis. Lam asked whether the government would try to cut the cost by streamlining the administrative workflows and incentivising the market to submit tenders.

The estimate covers spending on planning and engineering studies, detailed design and site investigation, site formation and engineering infrastructure and land resumption and clearance.

The development areas include Hung Shui Kiu, Ha Tsuen, Yuen Long South, Lau Fau Shan, San Tin Technopole, Lok Ma Chau Loop, Ngau Tam Mei, Kwu Tung North, Fanling North, New Territories North New Town and Ma Tso Lung.

Secretary for Development Bernadette Linn at a press on October 30, 2023. Photo: Kyle Lam/HKFP.

Among the individual items, the most expensive work is estimated to be the remaining phase of the Kwu Tung North and Fanling North site formation and engineering infrastructure. It will cost around HK$32.5 billion and the Finance Committee will be asked to approve the sum in the second quarter this year.

“We would only be able to provide more accurate estimates on the expenditure of those projects when the relevant studies/design proceed to a more mature stage,” a written reply from the minister read.

The 30,000-hectare Northern Metropolis is intended to integrate existing individual development projects in an “innovative and organic manner” in order to upgrade the entire region into a metropolitan area, the government said in its 2021 proposal.

A price tag was not mentioned at the time, which led to questions on how the government would finance the project in light of predicted budget deficits.

Photo: Kelly Ho/HKFP.

In March, Financial Secretary Paul Chan said there was“no need to worry” about a structural deficit, after the minister predicted the city would record a deficit of HK$101.6 billion for the 2023-24 fiscal year.

The government’s plan for a HK$120 billion bond issue would be used to finance infrastructure projects including the Northern Metropolis and the Hung Shui Kiu Ha Tsuen New Development Area, Chan’s office said.

The development chief told the legislature on Wednesday the government would speed up the Northern Metropolis by actively leveraging market forces and implementing diverse development modes.

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