Filthy air could dent HK's competitive advantage

Filthy air could dent HK's competitive advantage

By Tan Ee Lyn

HONG KONG (Reuters): The air in Hong Kong is getting so bad
even big business is getting worried.

Citizens have long cried out against the choking exhaust that
has turned the skies above this city of 6.8 million people into a
hue of constant gray regardless of the weather.

Their calls are now being joined by business leaders who fear
financial repercussions from the deteriorating environment of
Hong Kong, which ironically means "fragrant harbor" in the local
Cantonese dialect in honor of the waters it was built around.

"The business community has become progressively concerned and
alarmed," Barrie Cook, chief executive of CKI Materials, a unit
of Cheung Kong Infrastructure Holdings, told Reuters.

Cook, a Briton who was watched Hong Kong's environment
deteriorate from bad to worse during his more than 10 years in
the territory, became so irate with lack of policy action on the
city's pollutants that he set up an environmental business group.

In mid-1998, he helped found the Hong Kong Business Coalition
on the Environment, comprised of some 25 foreign and local
business chambers, to push for a cleaner Hong Kong.

The underling concern: filthy air could dent the territory's
competitive edge.

Hong Kong's government blames the air pollution problem mostly
on diesel-powered vehicles. Smoke from factories and power
stations, and pollutants drifting south from mainland China, are
also among their concerns.

But the fumes belching from the buses, taxies, vans and trucks
that clog the streets of one of the world's most densely
populated cities are a daily reminder of the problem.

"Every day, idling luxury cars spew poisonous exhaust fumes
while drivers sit inside, reading, eating or sleeping,"
complained a reader in a recent letter published in the South
China Morning Post.

The government appears to be responding to the issue,
unveiling plans to have 5,000 taxis run on liquefied petroleum
gas by 2000, and putting the entire taxi fleet of 18,000 on the
cleaner fuel by the end of 2005.

The sale of leaded petrol has been banned since April.

There are also plans to fine drivers who leave engines of
their parked cars running and proposals to close streets in dense
districts like Causeway Bay, Tsim Sha Tsui and Mongkok.

But environmentalists say such measures are still not enough.

They were particularly enraged when the government, citing the
difficult economic situation, in June scrapped plans to raise the
current meager fine of HK$450 (US$60) on smokey, polluting
vehicles.

Big business

Cook said the government should do more to coordinate efforts
between departments to fight the problem and work out long-term
solutions to minimize the use of private cars in crowded areas.

"We need to look at the transport strategy, get people out of
private vehicles and onto public transport," he said.

"We believe it adds to Hong Kong being uncompetitive because
inevitably there are comparisons made between the environments in
different countries."

"It affects the livelihood and health of people in Hong Kong.
People with young children or children whose health is not too
good anyway..feel that they don't want to stay here too long."

"Finally, of course, there's a concern on the effects on the
tourism industry because the tourist industry is just starting to
rebound after the financial crash."

If nothing is done, the business community fears, foreign
businesses could start to look elsewhere for headquarters and
investors may think hard about putting in money.

A flurry of recent studies have shown the dire consequences
air pollution is inflicting on the territory.

The government, quantifying the impact of air pollution for
the first time, estimated its cost - in terms of medical care and
loss of productivity - at HK$3.8 billion (US$490 million) a year.

The World Health Organization has also said Hong Kong's
current air quality could lead to 2,000 premature deaths a year.

Environmental scientists at the University of Hong Kong,
citing a two-year study, have even predicted Hong Kong would be
"unlivable" in 10 to 15 years should the present air quality be
allowed to deteriorate.

The business coalition, representing the most direct
intervention by the private sector in the environment debate,
recently has had access to top government officials.

And Cook said the coalition has been encouraged by the
response so far.

In recent months, Chief Executive Tung Chee-hwa and the
convenor of his top advisory council Leung Chun-ying have both
said they would make cleaning up the environment a priority.

Although there is no concrete evidence that people are leaving
Hong Kong because of bad air, the issue is becoming widely
discussed in public and at home, especially as government
warnings persuading the old and those with respiratory problems
to stay indoors become more frequent.