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March 26th, 2012:

Dirtiest financial hub is Tsang’s legacy

Hong Kong can pat itself on the back for its business success, but air pollution is much worse than in New York, London, Tokyo and Singapore – and these cities have all set far more ambitious improvement targets
Mar 26, 2012

Harbouring an unlicensed duck in Hong Kong can land a fine of HK$50,000 after the world’s first human deaths from bird flu were recorded in the city 15 years ago. That’s 50 times the penalty for driving a vehicle belching smoky fumes.

Failure to force ageing buses and trucks off Hong Kong’s streets is a key cause of air pollution that results in more than 3,000 premature deaths a year, according to think tank Civic Exchange. In contrast, the H5N1 virus killed 350 people worldwide since 1997, World Health Organisation data shows.

“People normally don’t realise that air pollution can cause cancer, heart and respiratory diseases,” said Carlos Dora, co-ordinator at WHO’s Department of Public Health and Environment, who puts the global annual death toll from filthy urban air at 1.3 million. “Those are the diseases that really are the big, big plague.”

As Chief Executive Donald Tsang Yam-kuen prepares to step down after seven years in office, he leaves a city that boasts the world’s most valuable stock exchange, hosted three of the five biggest initial public offerings in history and is the best place on the globe for business, a new gauge by Bloomberg shows.

Blotting the record is another superlative: the most polluted international financial centre.

New York, London, Tokyo and Singapore all have cleaner air and more ambitious improvement targets, according to WHO data and the city governments’ websites. As China opens its economy, removing the capital controls that led investors to use Hong Kong as a proxy for Chinese growth, pollution risks undermining Tsang’s economic successes.

“I’m leaving Hong Kong explicitly because of the air,” said Alex Turnbull, an Australian banker at a Wall Street firm, who plans a move to Singapore in May. “When capital controls leave, how on earth will this city stay competitive? Hong Kong is at risk of being irrelevant in the long run.”

The government will continue to strive for better air quality, “both for our citizens’ health and to attract overseas talent and enhance Hong Kong’s competitiveness as a financial hub and tourist destination”, Tsang’s office said.

The air-quality meter in the Central business district has registered an average roadside pollution level of “high” or “very high” every day but one this year. In 1999, 66 per cent of days were at those levels. By 2010 and last year, it was more than 90 per cent. On Thursday in Central, the roadside reading was 70, and in the Causeway Bay shopping district it was 89, government data showed.

Airborne particles from vehicle exhausts and power stations have the greatest impact on human health, linked to 9 per cent of lung cancer deaths globally, WHO estimates.

Hong Kong’s average PM10 reading – of particulate matter with a diameter of 10 micrometres, about one-seventh the width of a human hair or less – in 2009 was 50 micrograms per cubic metre, according to a WHO survey of 1,100 cities. While that was less than half of Beijing’s, it compares with 29 in Singapore and London, 23 in Tokyo and 21 in New York. The WHO guideline is 20.

Average annual roadside levels of nitrogen dioxide, which inflames lungs, increased 27 per cent in Hong Kong last year from 2007, Environmental Protection Department (EPD) data show. Last year’s levels were more than triple WHO safety limits. Hong Kong also adopted the lowest or second-lowest interim targets offered.

The government says pollution trends are down, with a one-third drop in particulates since 1999. Nitrous oxide is 28 per cent lower and sulphur dioxide fell 56 per cent, government data show. Still, nitrogen dioxide is up 24 per cent, ozone 21 per cent, and those pollutants that had dropped are either up or little changed since 2009.

In 1999 the city’s observatory recorded 750 hours of reduced visibility that was not caused by fog, cloud or rain; last year that rose to 1,399 hours.

Tens of thousands of finance professionals and other visitors to last week’s Credit Suisse Asian investment conference and the Hong Kong Rugby Sevens were greeted by smoggy skies.

Tsang has repeatedly promised to tackle the problem, including a vow in May that he would introduce air quality objectives before leaving office on June 30. That timeline has slipped to 2014.

The government had to “carefully assess the economic and social impacts” of tightening air quality rules, Tsang said last year.

Outside of environmental impact assessments for specific projects, the EPD has few legal powers to force change where it has no jurisdiction, such as transport.

Unlike most big cities, Hong Kong’s bus services are run by private franchises under government supervision. Forcing operators to modernise fleets would mean higher fares for many who are already struggling to meet their daily transport costs.

For issues like bird flu that affect “all stakeholders – businesspersons, government officials and the general public” the government is “highly motivated,” said Ming Sing, an associate professor of social sciences at the Hong Kong University of Science and Technology. “If interests are divided, such as for tackling air pollution, that’s another story.”

A ban on idling engines that came into effect on December 15 took four years to pass from public consultation to law, and with so many exemptions that critics said it was meaningless. No drivers had been fined to date, the EPD said.

The government also spent HK$90 million to fund a study on electronic road pricing in 1997, which was never implemented.

The city lags behind rivals in upgrading its bus fleets. More than half of the 5,798 buses plying franchised routes at the end of last year were Euro II standard or earlier, according to an EPD statement in February.

Euro II models emit 2.5 times as much particulate matter as Euro III standard buses, and 12.5 times as much as Euro V, Civic Exchange says. The government plans to retrofit buses with catalytic converters that scrub out noxious fumes, as well as trialling hybrid and electric vehicles.

To date, six buses have been fitted with the filters in a year-long test that started in September. The trial of hybrids is due to begin at the end of next year, while no funding has yet been provided to buy six electric buses, the EPD told lawmakers in February.

“These delays in policy are accountable in terms of illnesses, damage to quality of life,” said Anthony Hedley, honorary professor at the University of Hong Kong’s School of Public of Health. “We’ve got cohorts of children who have been exposed to the most intensive levels of exposure to very toxic air pollutants for quite a long time.”

Meanwhile, construction of roads, including an expressway beneath an existing highway through Central, Causeway Bay and Wan Chai, as well as a 30-kilometre bridge linking Zhuhai and Macau to Hong Kong, may spur demand for cars. In the decade to the end of last year, private car numbers jumped 21 per cent, Transport Department data show.

“The trend for many cities is to take care of the quality of urban life because they are competing for the same kinds of industries: finance, services, tourism,” WHO’s Dora said.

“Cities are striving to be better, and those which don’t will suffer.”

Don’t waste Eco Park on foreigners: lawmakers

Cheung Chi-fai
May 31, 2005

It could be used for external recyclables if outside firm takes over, panel told

Lawmakers yesterday called for transparent and fair rules to regulate the operator of the proposed recycling park in Tuen Mun to protect smaller local firms from being squeezed out.

They warned that if the park was dominated by heavyweight overseas recyclers, it might become an outlet for imported recyclables despite being designated primarily for locally generated waste.

The park, on a 20-hectare site in Tuen Mun, will cost $316 million, funded by the government. It will house various recyclers.

The Eco Park, formerly named Recovery Park, will be run by a private firm selected by open tender.

The operator, regulated by a land lease or a licence, will be responsible for the day-to-day operations and maintenance of the park and will recruit tenants by open tender.

It will be paid a management fee by the government and will collect the rents.

The operator is expected to be chosen by the middle of next year.

The scheme has drawn criticism from lawmakers concerned about how the operator and tenants will be picked and how rents will be set.

They are also worried that major overseas recyclers, which can afford higher rents, might dominate the park and use it as a base to treat imported waste.

‘I am worried it is ultimately the highest-bidding price that determines who is to manage the park and who is able to move in, and this will choke the development of existing local recyclers,’ legislator Lee Wing-tat said at a meeting of the Legco environment panel.

Mr Lee said recyclers’ track record in Hong Kong should be a criterion in the selection.

Panel chairwoman Choy So-yuk echoed Mr Lee’s concern. She claimed the government had already chosen an American operator to run the park, but this was immediately denied by officials.

‘I have never heard a single company being named already,’ environmental protection director Keith Kwok Ka-keung said.

In response to lawmaker’s concerns, he said the operator and recyclers would be required to process recyclables generated locally, though there would be some flexibility regarding limited material from outside Hong Kong.

Mr Kwok reiterated that the rental arrangement and land allocation procedures would be laid down in the land lease or operation licence. ‘We will not leave the operator a free hand to run it as it wishes … but at the same time we need to rely on market forces to make the park work towards the goal of value-added recycling industries,’ he said.

Mr Kwok said the Eco Park was the ‘missing link’ Hong Kong had to fill to ensure expanded waste-separation efforts being planned would not be for nothing.

The first phase of the park is expected to be operating by the end of next year.

and the story is:

EPD explains the depth of local HK recycling =98.6 tonnes per day

“Waste reduction and recycling are very important elements of the local waste management framework. They help both to conserve natural resources and to reduce demand for valuable landfill space.

Through the existing waste recovery system, about 3.60 million tonnes of municipal solid waste were recovered in Hong Kong in 2010. Of that total, 1% was recycled locally and 99% was exported to the Mainland and other countries for recycling, with an export earning of HK$8.6 billion for Hong Kong.”

Publicly funded waster venture struggles


Publicly funded waster venture struggles

Plastic-recycling centre can’t hit its target despite subsidy, free site and machines – leaving private operator wondering what chance it has

Cheung Chi-fai 
Mar 26, 2012

Will government financial support offer a solution for loss-making recyclers? Not necessarily, if the performance of a charity supported by public funds to run a plastic-waste-processing centre at the Eco Park in Tuen Mun is anything to go by.

The Yan Oi Tong charity is receiving HK$10 million over three years to run its recycling service and also benefits from a 5,000 square metre site, handed to it free along with all the necessary equipment.

But last year it recycled just 1,090 tonnes of waste plastic – well below its target of 7,200 tonnes. It means each tonne of recycled plastic effectively cost the taxpayer HK$3,300, although precise details of its spending and subsidy arrangements have not been made public.

And that’s before the HK$21 million the Environmental Protection Department spent on infrastructure, plant and equipment for the centre and the HK$1.2 million annual rent it is forgoing.

Lee Hing-tak, who runs a private waste-plastic-recycling company at the Eco Park, said he struggled to see how a commercial plastic-recycling operation could sustain itself if a charity could not. “With all that support and funding, the charity is not even able to hit the target and break even. How can a commercial recycler like us survive?” he said.

A person familiar with the situation acknowledged the problems facing the charity but said its performance should not be measured only by the tonnage it recycled.

“One tonne more or less recycled has little impact on the overall operation. But it has a huge effect in demonstrating that locally generated waste can be handled locally. It can boost people’s confidence in recycling,” the person said.

Dr Chung Shan-shan, a waste management specialist from Baptist University, said plastic recycling on a commercial basis was undoubtedly a difficult line of business, but a subsidy might not be the most effective solution. “All we need are correct and effective policies, such as taxing overpackaging to minimise the waste at the source. A policy to divert waste to proper recycling channels might also help too,” she said.

The charity did not respond to media inquiries.

Another charity, St James’ Settlement, which is receiving HK$10 million to operate an electrical appliance recycling centre at the park, treated about 230 tonnes of waste last year, slightly more than the minimum required.

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

Cheung Chi-fai 
Mar 26, 2012

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.