THE Chairman of Hong Kong Container Terminal Operators' Association (HKCTOA), Alan Lee, says the government should not subsidise the building of Container Terminal 10 if a decision is made to proceed with the project.

He stressed that if the government were to financially help with the project, "the game plans will be changed"; but he failed to elaborate on the comment.

Speaking in a television interview with Bloomberg, Mr Lee indicated that the future of Terminal 10 hinged on whether direct shipments from China to Hong Kong would continue to grow, and whether the crucial issue of the US$300 difference in container costs compared with the mainland would be resolved.

Mr Lee reiterated that the HKCTOA was working "very hard" with the Hong Kong government, various unions, industry people and the Guangdong government to resolve the cost difference issue. He hoped that a resolution would be found as soon as possible.

"If there is a delay in the cost difference issue, then I don't see that South China cargo will continue to come to Hong Kong. This will impact on the requirement of Terminal 10 because if that's not growing (cargo from South China), then the building of Terminal 10 should be delayed," he added.

Terminal 9, which is already partially opened, will be fully completed by the end of the year.

Latest government statistics show that Hong Kong port's container throughput grew 9.2 per cent in the first eight months of the year, mainly driven by international transshipments through Hong Kong and by cargo from the Pearl River Delta region.

Mr Lee pointed out that there was already excess capacity at the container port, explaining that it was currently operating 40 per cent below capacity.

"We have 24 berths, and today each berth handles only about 500,000 TEU or only 12 million TEU per annum. We could handle 800,000 TEU per berth up to 20 million TEU."

But, he emphasised that with improved productivity and efficiency, and with extra land from the government to improve a second container yard, the port could handle up to 24 million per annum or up to one million per berth.

"We do have a lot of excess capacity. Now whether we need to build Terminal 10 or not depends on the growth of south China cargo and also whether this excess capacity will be fully utilised."