Cost of reclamation for artificial islands needs to be capped

Cost of reclamation for artificial islands needs to be capped

Danny Chung

Artificial islands, as proposed by the Government in the 2013 Policy Address, may need to be built in shallower waters in order that are economically viable as a source of new land, according to a construction cost consultant.

In its latest Construction Cost Quarterly Review covering the last quarter of 2012, consultant Langdon & Seah said the cost of forming reclaimed land on artificial islands may have to be capped at HK$27,000 per square metre.

According to Langdon & Seah, the average land required by an average household of three persons in Hong Kong was 75 square metres while the average size of flats completed in the past three years was about 70 metres of gross floor area (GFA).

As such the ratio of GFA to land would be 1:1.07, or roughly 1:1 meaning that one square metre of land can only generate about one square metre of GFA.

Langdon & Seah noted that the accommodation value of residential sites in Tin Shui Wai in the New Territories was about HK$27,000 per square metre.

The accommodation value is the value of land per square metre of developable gross floor area of completed developments.

“Taking this as a benchmark, it would appear that the cost of the artificial islands would need to be capped at around HK$27,000 per square metre of land created to be economically viable,” the consultant said.

Last month, following the Policy Address in January, the government launched Stage 2 of its public engagement on Enhancing Land Supply Strategy regarding five potential near-shore reclamation sites as well as building artificial islands and three schemes for rock cavern development.

According to the consultation document, artificial islands are proposed in Central Waters, the stretch of waters between Lantau Island and Cheung Chau in the west and Tsing Yi, Hong Kong Island and Lamma Island in the east.

The total area of land for the artificial islands is between 1,400 and 2,400 hectares.

Location of Central Waters where the Government proposes to build artificial islands    (HKSAR Government)

Location of Central Waters where the Government proposes to build artificial islands (HKSAR Government)

Assuming the upper figure of 2,400 hectares or 24 million square metres Construction Post has calculated that the potential cost of reclamation for artificial islands using the cap of HK$27,000 per square metres would be about HK$648 billion for the land alone.

The cost of reclamation would depend on several factors of which one was actual water depth.

“The deeper the water, the more filling material required to create the land up to formation level and thus the higher the cost,” the consultant said.

In addition, there was the dredging depth to be considered as the marine mud, commonly found on seabeds in Hong Kong, has low bearing capacity and must be removed and replaced with fill to support the future reclamation on top.

Langdon & Seah noted that the thickness of the marine mud layer varied from location to location and was unrelated to the water depth.

“It is not uncommon to have total dredging costs higher than that of the higher fill above seabed level,” it said.

For a site with 7 metres depth of water and 7 metres depth of dredging, the overall dredging and filling cost, excluding the seawalls, would be about HK$4,000 per square metres.

For another site with 14 metres depth of water and 7 metres depth of dredging, the cost would climb to HK$5,500 per square metre.

“Note that these costs assume no major complications, such as strong water currents or environmental restrictions on dredging. These can present significant cost premiums,” the consultant said.

The government is currently reclaiming land for the Hong Kong Boundary Crossing Facilities in the waters off Hong Kong International Airport at Chek Lap Kok for the future Hong Kong-Zhuhai-Macao Bridge. (Danny Chung)

The government is currently reclaiming land for the Hong Kong Boundary Crossing Facilities in the waters off Hong Kong International Airport at Chek Lap Kok for the future Hong Kong-Zhuhai-Macao Bridge. (Danny Chung)

The other cost factor was the seawall to protect and retain the fill.

Sometimes the ratio of seawall against fill would be high in which case the cost of building the seawall would be as much as or even higher than the cost of the filling.

And these seawalls would have to be constructed to quite a large size, on dredged seabeds, in order to meet engineering performance requirements.

For the first scenario mentioned earlier, the cost of the seawall would be about HK$600,000 per metre run while in the second scenario, the cost would jump dramatically to at least HK$1.5 million per metre run.

If the seawalls have to be made vertical instead of the normal sloping type to maintain deeper depths for passage of shipping, then the design would have to be strengthened further leading to increased cost.

As such Langdon & Seah said sites with shallow waters would be more likely to be reclaimed.

“It would appear that the sites at Hei Ling Chau West, Lamma North and Peng Chau-Hei Ling Chau which are in shallower waters and closer to the mainland (making connecting infrastructure costs lower) would be more economically whilst that at South Cheung Chau would be doubtful,” the consultant said.

It said primary infrastructure such as utilities and transport links would be required to make the islands habitable, the extent of which would depend on feasibility studies.

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