Hong Kong government is set to launch a large-scale land reclamation project, namely the Kau Yi Chau Artificial Islands, to boost the city’s land supply and address the unaffordable housing crisis.
In their ambitious proposal, Hong Kong plans to construct several artificial islands among the natural islands between Lantau and Hong Kong Island to pave the way for more developmental projects in Lantau.
Under the plan, the three artificial islands will cover around 1,000 hectares of land that can provide around 200,000 residential units for 550,000 people. In addition, it has the infrastructure of a core central business district (CBD) with 270,000 job opportunities. The project will debut near the end of 2025.
One major concern is the irreversible damage of land reclamation to marine life and Hong Kong's coastal sea bed. Moreover, together with the Northern Metropolis development project, the government will have to spend at least HKD 1,500 billion (USD 192 billion) for the grand developmental project in the coming decade, and critics warn that the plan may drain the city's cash reserves.
The Artificial Island project was first introduced by former chief executive Leung Chun-Ying in 2014, rebranded by his successor Carrie Lam as “Lantau Tomorrow Vision” in her policy address in 2018. The project is intended to create land for housing and turn Lantau into a transportation nexus by connecting Hong Kong commercial centers to the Guangdong-Macau-Hong Kong Greater Bay Area, China's strategic economic and tech hub.
However, the biggest concern is money. Since the price tag of land reclamation alone is already marked at HKD 580 billion (USD 74 billion), Jason Poon, a veteran engineer, estimated that the project would cost HKD 900 billion (USD 115 billion) together with the construction of other infrastructure. Even if the government managed to sell the reclaimed lands to private developers, it would only generate around HKD 400 billion (USD 51 billion) in revenue. The deficit will be about HKD 500 billion, Poon estimated.
In response, the city’s finance chief suggested public-private partnerships and issuing bonds to fund the land reclamation.
