Eco Park falls short of recycling, jobs targets

Tenants cite logistical problems and government policy shortcomings for the failings of the HK$319 million venture despite low rent and other help

The HK$319 million government-funded Eco Park for the recycling industry has failed to live up to expectations, with its commercial tenants falling far short of targets for creating jobs and handling waste.

One tenant has ceased operating and is mulling withdrawing from the venture, while others are banking on a policy change under the new government.

The companies’ plight, which comes despite the fact that they enjoy low rent and government-funded infrastructure at the Tuen Mun park, raises questions over the future of the recycling industry in the city.

Government figures show that the five companies are about 44 per cent short of the minimum target for the amount of waste to be recycled, set by the Environmental Protection Department. Altogether, they employ just 80 staff, 40 fewer than the target.

The companies were granted 10-year tenancies after open tendering in 2009. As well as paying a favourable rent, they can take advantage of management facilities, publicity and promotion and wastewater treatment provided by the government, and use berthing facilities for a fee.

Officials remain optimistic about the prospects for the park, as they are stepping up community recycling efforts, which should ensure a more affordable supply of raw materials to the Eco Park. The recycling companies are also looking at changing their business strategies or upgrading production to improve the quality of their products.

A person familiar with the situation said it was premature for the government at this stage to mull over subsidising the operators while there were other options available to address the problems. Only one of the five tenants, a company that converts waste cooking oil into biodiesel, surpassed its individual target last year. The other four, which recycle waste metal, plastic, wood, and electrical appliances, missed their targets by between 55 and 94 per cent.

Hung Wai Wooden Board, the first tenant to move into the park, said it stopped production last month and bosses were considering winding up the loss-making business if they cannot find a way forward. The company has so far invested about HK$19.3 million in the Eco Park operation.

“I have gone through a very frustrating experience and now I am losing my patience and enthusiasm for this venture,” director Cheung Nga-kwan said.

The company collects wooden board, which it shreds and transports to its factories in northern Guangdong for processing. But Cheung says transport costs make the business model unsustainable. “That means the more we produce, the more [money] we will lose,” she said.

In 2010, it recycled more than 5,000 tonnes, well above the target of 2,400 tonnes. But last year, volume slipped to just 1,600 tonnes, triggering warnings from the department.

She is mystified that the government is willing to spend HK$14.9 billion on a huge incinerator at Shek Kwu Chau island to deal with the city’s waste mountain but will not subsidise recycling companies.

“Officials tell us there is no subsidy policy, but what about the HK$6,000 handout [to every permanent resident] by the government? Lack of precedent is never an excuse,” she said.

Another problem is that companies beyond the Tuen Mun area prefer not to transport waste to the Eco Park to save on fuel costs, limiting Hung Wai’s supply of materials.

There is also frustration at the park’s only commercial plastic-waste recycler, Telford Envirotech. It handled just 230 tonnes of waste last year, while the requirement is 4,000 tonnes.

Lee Tak-hing, managing director of the firm, blamed the weak market for plastic-waste recovery, which does even more poorly than metal and paper recycling businesses.

“No one, even the most humble scavenger, wants to collect waste plastic, which brings a very low price, while the cost to transport the bulky waste is disproportionately high,” he said.

“What I am hoping for is that when the new chief executive takes over the government, he can change the policy to provide more concrete support for recycling,” he said.

The Li Tong Group, which disassembles used computer equipment, only achieved 45 per cent of its 1,200-tonne annual target. Bosses said finding waste to recycle was more challenging than they had anticipated and there was still much competition from unlicensed e-waste handlers.

A spokeswoman for the Environmental Protection Department said it had been working with tenants to fine-tune their operations and provide them with relevant advice and guidance with a view to improving their competitiveness.

She said the tenants would also be helped by active green procurement by the government and allocation of temporary sites in urban areas for the collection of recyclable waste.

chifai.cheung@scmp.com