LCQ7: Northern Metropolis

Following is a question by the Hon Mrs Regina Ip and a written reply by the Secretary for Development, Ms Bernadette Linn, in the Legislative Council today (May 3):

The then Chief Executive put forward the vision of the Northern Metropolis development in the 2021 Policy Address. The development areas cover two district administration areas including North District and Yuen Long District, with a land area of about 300 square kilometres. In this connection, will the Government inform this Council:
(1) whether the Government has made estimations on the expenditure on implementing the entire Northern Metropolis development plan; if so, of the details (including the expenditure involved in land resumption, as well as the expenditures on the development of infrastructure, innovation and technology, and transport networks); if not, the reasons for that; and
(2) of the financing options for the implementation of the entire Northern Metropolis development plan?
The Northern Metropolis comprises a number of development projects, including Kwu Tung North/Fanling North, Hung Shui Kiu/Ha Tsuen and Yuen Long South New Development Areas which are under construction, and San Tin Technopole, New Territories North New Town, as well as expanded areas such as Lau Fau Shan, Tsim Bei Tsui and Pak Nai, Man Kam To/Lo Wu and Ma Tso Lung etc. which are under planning study. These planning studies will be largely completed by 2024, to be followed by detailed design stage for engineering works. The Northern Metropolis also involves a number of transport infrastructure projects such as the Hong Kong-Shenzhen Western Rail Link, the Northern Link Main Line and Spur Line and the Northern Metropolis Highway, as well as ecological conservation projects of which the relevant studies have commenced progressively.
In consultation with the Financial Services and the Treasury Bureau, the consolidated response to the two parts of the question is as follows:

​Since many development projects and transport infrastructure of the Northern Metropolis are still under the planning study stage, and there is a need thereafter to conduct detailed design for engineering works, and determine the prioritisation and phasing for implementation, we are unable to make estimations on the expenditure on implementing the entire Northern Metropolis development plan at this stage.
The Northern Metropolis will transform the northern part of the New Territories through re-planning, resumption and clearance of agricultural land and brownfield sites, as well as infrastructure works. Since most of these are government initiatives, relevant expenses for land clearance, rehousing and compensation as well as construction costs will continue to be mainly borne by the Government. At the same time, we will reinforce public-private partnership and allow land owners to take forward residential, commercial and related developments in the New Development Areas by way of in-situ land exchange under the Enhanced Conventional New Town Approach. This would not only leverage market forces to enhance quantity and speed of the developments, but also facilitate the Government to manage the cash flow of development projects. In addition, when granting land for industrial uses such as innovation and technology, we will consider land disposal methods other than open tendering in accordance with the industry-specific policies of the relevant bureaux, for example, granting land directly to leading enterprises recognised by the policy bureau for carrying out both site formation and superstructure works.
As for transport infrastructure, if the "Rail-plus-Property" model is continued to be adopted to bridge the funding gap of the new railway project by property development, this will help reduce the government expenditure.  
The above is our current view on the financing arrangements for the Northern Metropolis. Since the development will straddle two decades, we will formulate, review and adjust from time to time the financing arrangements taking into account the study findings of the aforementioned development projects and transport infrastructure, as well as government finances and other policy considerations, market situation, etc.
Lastly, the Government is making preparations for the establishment of the Northern Metropolis Co-ordination Office (NMCO) this year to assume an overall championing and co-ordinating role in taking forward the Northern Metropolis initiative. The NMCO will work closely with relevant bureaux/departments to ensure orderly implementation of the various works projects of the Northern Metropolis. The Government will properly manage the cash flow of expenditure, taking into account the sustainability of public finance. The Financial Secretary announced in the 2022-23 Budget that $100 billion would be set aside from the cumulative return of the Future Fund to set up a dedicated fund in order to expedite the development of land, housing and transport infrastructure projects within the Northern Metropolis. The Government is considering the mode of operation of the dedicated fund.
Ends/Wednesday, May 3, 2023
Issued at HKT 15:35