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Policy recommendations

In this regard, this report presents a set of five policy recommendations with the aims of driving the long-term sustainable growth of
our logistics industry and paving the way for our future economic development. These recommendations address the current issues
from both the ‘hardware’ and ‘software’ perspectives.

‘Hardware’

Recommendation 1: Develop dedicated logistics nodes

In anticipation of the future demand of the trading and logistics industries and other strategic sectors, the Government should develop
dedicated logistics nodes in the New Territories. With well-planned development, these logistics nodes could eliminate the negative
externality generated by existing unorganised brownfield operations. As a relocation option for current brownfield operators, the
logistics nodes will also facilitate the reapportioning of brownfield sites for other development such as housing.

Four logistics nodes are proposed at strategic locations identified in the New Territories, namely the Hong Kong Boundary Crossing
Facilities Island, Lung Kwu Tan and Tuen Mun West, Northwest New Territories and New Territories North. Each of these locations is
designed with respective roles and functions that are to be complementary with one another. These logistics nodes can provide up
to 930 hectares of land and accommodate up to 125,000 jobs, thereby providing the necessary space for the logistics industry and
other strategic industries that may emerge in the future.

Recommendation 2: Reform site allocation mechanism

To provide a level playing field for companies of all sizes and to underpin the healthy development of the industry, the Government
needs to rethink its site allocation mechanism within the aforementioned logistics nodes, instead of succumbing to the old path of
open bidding to achieve the highest profit for the sites. The logistics nodes could be managed by a statutory body with a mission to
drive the long-term development of the industry. This report touches on several operation models based on overseas experience,
which could serve as a good reference for management of the logistics nodes.

Recommendation 3: Relocate Kwai Tsing Container Terminals

In our previous report From Large Scale Reclamation to an Ideal Home, we proposed the relocation of the KTCTs to an outlying
island. One possible relocation site is Cheung Chau South. Some have also proposed building a mega port outside Hong Kong
waters to consolidate all major ports in the Greater Bay Area. By relocating the KTCTs, not only can it create an opportunity to
upgrade our port infrastructure for modern transhipment business, but it can also release valuable land in the urban core area for
residential and commercial development.
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