Transports Of Delight

One of the happiest people in Hong Kong on 1 July will almost certainly be the minister responsible for transport and housing, Professor Anthony Cheung Bing Leung. He will be stepping down after a tough five years.

Cheung, it is worth remembering, was essentially appointed for his expertise in housing matters. His membership of the pan democratic camp, following the absorption in 1994 of Meeting Point by the Democratic Party, was an added bonus because it gave the administration of chief executive Leung Chun Ying a veneer of inclusiveness.

Housing has been a problem area throughout Cheung’s tenure for reasons largely beyond government control. In particular the widespread use of quantitative easing by central banks around the world in an effort to stimulate economic growth – or at least stave off recession – has kept interest rates at abnormally low levels which in turn helped push property prices here to an all-time high. The long lead time needed to revive the land supply and housing construction programmes after several years of standstill meant relief was always "just over the horizon", despite Herculean efforts by both Leung and Cheung.

The transport side of his portfolio has seen one crisis after another. Every extension of the mass transit rail network was many months behind schedule. The high speed rail link to Guangzhou was not only years late, but also vastly over budget. Moreover the proposed co-location arrangements for mainland and local customs and immigration at the Kowloon terminus, though entirely logical, have proved controversial. Much of this was entirely beyond Cheung’s direct control, but of course under the system of ministerial accountability he has to carry the political can.

But before we let him off the hook completely, we should examine a package of three interrelated decisions, two of which were taken by Cheung himself and one of which he supported on transport grounds. Individually and collectively these decisions increase the number of vehicles on the road, increase road side air pollution, and create a new oligopoly. Common sense suggests we should be pulling in the opposite direction on all three counts.

The Transport Bureau’s opposition to Uber-type operations is fanatical to the point of Taliban-type intensity. No rational arguments are being advanced to justify the government’s position. It is no use simply bleating about rule of law, need to comply with regulations, need for proper insurance etc. Almost every other government in the region has found it possible to amend its regulatory regime to permit the lawful introduction of car-hailing operations. Our arch competitor Singapore, our motherland mainland China, Thailand, Indonesia, the Philippines, good golly Miss Molly even Vietnam, have put these operations on a proper legal footing. Soon we will be the only major business centre in the region which bans such schemes.

It is not true, as some government press statements seem to imply, that Uber is asking to be exempt from regulation: it is simply asking for appropriate amendments to be made to bring our current regime into the 21st century. This stonewall refusal to do so risks making us a laughing stock.

Next comes the question of electric versus petrol/diesel powered vehicles. The facts are roadside air pollution here is very high which poses a serious public health risk; the major source of the pollution is vehicle emissions; electric vehicles have zero emissions at the exhaust pipe whereas emissions from those powered by hydrocarbons are killing us. Until this year’s budget Hong Kong had exempted electric vehicles from first registration tax. This led to a boom in the number of Tesla and similar cars on our roads. The waiver has now been abolished on the purported grounds that it encouraged the number of private cars to grow. This is nonsense. The exemption affected the choice of vehicles, but it did not induce people to purchase vehicles they would not otherwise have bought. Zero electric vehicles were bought in April. Their place was taken by polluting ones, no doubt to the delight of major European luxury car makers.

There are basically two ways to restrict the number of vehicles on our roads: fiscal penalties, or a voucher scheme such as the one introduced by Singapore. For decades we have gone the first route but in a wealthy community the effectiveness is bound to be limited. If we are serious about containing or even reducing the number of private vehicles, and I think we ought to be, then it is time to consider the alternative. Within that cap, we should be giving preference to electric powered cars.

Finally, there is the proposed premium taxi scheme. Looked at in isolation, this idea has some merit because for the first time in decades it presents a challenge to the taxi cartel. But the structure – three operators each acquiring 200 new vehicles – effectively cuts out the small operators and limits the scheme to major players who can afford the considerable upfront costs.

Here is an alternative package for consideration by the next transport minister: grasp the nettle and cap the total number of private cars; within that number, encourage electric powered vehicles; amend the licensing arrangements so that car-haling aps like Uber can operate legally; consider whether or not a separate premium taxi scheme is still necessary, and if it is break it down into smaller fleet sizes so SMEs can participate.

Meanwhile, let us all wish Anthony a happy retirement.