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tonylai@macaubusiness.com
tonylai@macaubusiness.com
PUB L IC W ORK S & TRAN S PORTATION
More large scale public projects to boost economy
Secretary for Economy and Finance, Lionel Leong Vai Tac, has indicated that the Government will speed up the start of major public works and projects, with the intent of strengthening fixed assets and boosting the economy. Macau’s gross domestic product (GDP) fell 2.5 per cent in the first half of this year, a decrease the Secretary has previously attributed to the reduction of large construction works – such as those at the Hong Kong–Zhuhai–Macau Bridge border post in the first quarter of 2018 – and to the continuous decrease in gross fixed capital formation.
Sai Van Bridge is safe, says government
The Transportation Infrastructure Office (GIT) has denied media reports claiming that the construction of the Light Rail Train (LRT) connection between Macau and Taipa through the Sai Van Bridge would impact the bridge’s structural safety. The department was specifically referring to a report by Chinese-language newspaper Macao Daily News, which published a report claiming that the project raised security concerns due to its possible impact on Sai Van Bridge structure. In the report engineers contacted by the newspaper expressed concerns over the proposed works and stated that they should not be conducted in the 15-year old bridge.
Luís de Camões garden with more leisure areas
The Municipal Affairs Bureau (IAM) announced that leisure areas in the Luís de Camões Garden will be expanded and improved, with works to last until the first half of next year. The 20,000 square meters garden in Santo Antonio where the famous Portuguese poet’s grotto and statue are located in is one of the city’s oldest gardens, and according to the municipal body, prolonged use of its facilities has led to damages of varying degrees. Despite several repair works, children’s play facilities and outdoor fitness facilities were said to not meet the needs of the area’s residents, and therefore the IAM will expand children’s play area and equipment.
Shenzhen-Zhongshan Link next mega-project
The Shenzhen-Zhongshan Link is “another mega infrastructure project” in the Guangdong-Hong Kong-Macau Greater Bay Area after the Hong Kong-Zhuhai-Macau Bridge, officials of the Zhongshan administration revealed. The 24-kilometre Shenzhen-Zhongshan Link, slated for completion in 2024, comprises two bridges, an undersea tunnel and artificial islands. The RMB44.69 billion (US$6.28 billion) project could reduce the land transportation time between the two mainland Chinese cities from two hours to 20-30 minutes, with the daily traffic expected to reach 100,000 vehicles after completion, the officials said.
Investment in Guangzhou totals MOP13 billion
The accumulated number of projects backed by Macau capital in Guangzhou totalled 445 as of the first half of this year, according to administration officials from the Chinese city. The contract value of those projects reached nearly US$1.65 billion (MOP13.3 billion) with projects worth US$681 million already in place. On the other hand, the Guangzhou capital has set up 31 companies incorporated in Macau as of the first half of 2019, with an investment amount totalling US$216 million.
Cotai Water Jet to close more routes
Ferry services company Cotai Water Jet has indicated on its website that is removing this month six daily Macau-Hong Kong ferry routes. Last month, Cotai Water Jet had already announced the cancellation of three daily sailings between Taipa and Sheung Wan.
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Feeding the elephants
José I. Duarte
Economist, Macau Business Senior Analyst
jid@macaubusiness.com
ur online publication delved a few days ago into the issues surrounding the operation of the Taipa Ferry terminal. It titled, in a somewhat provocative way, and with pun intended, I presume: ‘White elephant in terminal decline?’ Those who have been around long enough will remember. This terminal was one of those projects that went far beyond what we might accept as reasonable both in terms of rising costs and construction delays. Some invoked the need to resize it for the massive anticipated influx of people. They would inevitably require a larger terminal. Others suggested that it would allow the decommissioning of the Outer Harbour terminal. The rationale for that was never clearly stated. Contrarily, some pointed out that the construction of the HZM Bridge would alter the estimates for future passenger flows. The framework for any forecasts would change significantly, even assuming that the then-existing ones were more than out-of-the-air guesses. In the end, the terminal increased to its current size – at multiple times the initial cost and much later than promised. When it opened it was hard not to feel that one might indeed be confronting a white elephant. The simple consideration of the amortisation costs should provide us with pause for thought. Let us assume a 20-year amortisation schedule to recover just the cost of the building. Future inflation adjustments aside, the ‘depreciation’ cost per passenger alone amounts, on current levels of usage, to a figure of more than 30 patacas. If initially expected passenger flows were reached, such value would stand at less than 1.5 patacas. Add maintenance costs and all types of operational costs – personnel, energy bills, security, you name it. We may well be
reaching operating figures per passenger that one may expect of international airports, not regional ferry terminals. To compound troubles, sea traffic is generally in retreat. The number of visitors arriving by sea is decreasing, with the trend accelerating since the bridge opened. Many Mainland tourist groups used the ferry connection to Macau in their path in and out of the Mainland. They can now move directly to and from Zhuhai. Macau residents, if not encumbered by luggage or travelling with people of limited mobility, will find it more comfortable to move between Macau and Hong Kong International Airport by bus. Consequently, the number of ferries connecting Macau to that airport has dwindled noticeably. Two to three connections a day is the current frequency of service. The effects also touch other ferry connections. For people going to Hong Kong Island or Kowloon the ferry is still arguably the most convenient connection. Its frequency, however, has been scaled down. The longstanding standard of ‘one ferry every fifteen minutes’ is no more. Between Sheung Wan and Macau the cycle is now every ‘20-30’ minutes. It is difficult not to see in all this a pattern that is recognisable elsewhere. The yet to launch Light Rail is a case in point. Even recently, officials were unable to quote any number at all – let alone a plausible or reliable one – about expected passenger flows. The vast and empty spaces of the HZM Bridge border are another case. They also look like a public infrastructure that arose without apparent connection to plausible levels of usage. Nobody was (or is likely to be) invited to answer for these (or other) planning and financial mishaps. No-one seems to feel accountable or responsible for them. As time goes by we may find out that the public budget will be nurturing not one but a herd of white elephants. Blessed be the baccarat tables. october 2019
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tonylai@macaubusiness.com
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tonylai@macaubusiness.com
By José I. Duarte
By JoĂŁo Paulo Meneses jpmeneses@macaubusiness.com
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january MAY 20192016 AUGUST 2015