Annual Report 1999



From left:
Erik Bøgh Christensen
Sean A Kelly
V K Sou
John Lee



The new management of Modern Terminals has been instrumental in achieving significant productivity improvements and generating business growth while actively engaged in strategic development with the objective of enhancing Modern Terminals' position as a leading terminal operator in Hong Kong. Key management initiatives are the commitment in the development of the Container Terminal 9 project and the acquisition of a strategic stake in the container terminals operations in Western Shenzhen that is strategically compatible with the impending entry of China into the WTO. In line with its enterprising corporate culture and outlook, Modern Terminals has launched a new company logo to fully reflect management' s initiatives in meeting the challenges offered by the new millennium.

Modern Terminals, a 50.8 per cent-owned subsidiary, continued improving its market position and made strategic investment in Mainland China.

On the background of continued strong consumer demand in the USA and some improvements in the Intra Asia trade, container volumes showed satisfactory growth during 1999. Throughput volumes at container terminals to and from the South China region, including Hong Kong, registered an overall growth of 12.6 per cent equivalent to over 1.3 million twenty-foot-equivalent units (TEUs). Hong Kong ports attracted almost 40 per cent of this growth.

The completion of CT9 will greatly enhance MTL's position as a leading operator in Hong Kong. Apart from lifting MTL's annual throughput capacity to a total of 4.45 million TEUs, the CT9 rationalisation plan will give MTL four contiguous berths with a total quay length of over 1,200 metres, plus a back-up area to enhance the standards and efficiency of its services.

Modern Terminals handled a total of 2.60 million TEUs in 1999, up 9.6 per cent over the previous year. This compared favourably with an overall market growth in Hong Kong of 6.1 per cent.

During the year, Modern Terminals continued to improve its services, productivity and efficiencies. The company was selected as a winner of the prestigious Hong Kong Productivity Council Productivity Award for Services 1999.

At the end of 1998, Modern Terminals was committed to participating in the development of the Container Terminal 9 (CT9) project in Hong Kong. Of the six berths to be developed at CT9, Modern Terminals will occupy the four southern berths after swapping its two berths at Container Terminal 8 with Asia Container Terminals. The completion of this project would greatly enhance Modern Terminals' position as a leading terminal operator in Hong Kong. The main civil contract was issued for tender towards the end of 1999 and contract award is expected by May 2000.

Modern Terminals' interest and engagement in container terminal operations in Western Shenzhen, PRC had also been strengthened further with the acquisition of a 20 per cent stake in Keifeng Terminals in early 2000 through a joint venture with China Merchants International ( Modern Terminals holds 40 per cent in this joint venture).

As part of the efforts to affirm its preparedness to meet the challenges of the new millennium, the company launched a new company logo in early December 1999 to project the image of a modern, dynamic, innovative and flexible company as befits Modern Terminals.

Air Cargo Terminals

Super Terminal 1

Hong Kong Air Cargo Terminals Limited (HACTL) in which the Group holds a 12.5 per cent stake, recorded a throughput of 1.58 million tonnes in 1999, comparing favourably to 1.46 million tonnes in the previous year and representing a year-on-year growth of eight per cent. Apart from its cost rationalization programs, the company has been focusing on further enhancement of its service quality to its customers. HACTL continued to lead the Hong Kong air cargo industry with its premier facilities and outstanding services



The 30-year franchise of the Cross-Harbour Tunnel Company (CHT) expired on August 31, 1999.

Hong Kong Tunnel & Highways Management Company Limited was established to manage the cross-harbour tunnel with effect from September 1, 1999. Efficient traffic flow and full operation of all systems were maintained.

Western Harbour Tunnel (WHT)

CHT also holds a 37 per cent stake in the Western Harbour Tunnel (WHT), a dual three-lane carriageway linking the West Kowloon Reclamation to the Western District on Hong Kong Island. This cross-harbour infrastructure has been under-utilised since opening in 1997 mainly because of the toll differences among the three cross-harbour tunnels as well as the capacity limitation on the approach roads leading to and from this tunnel. The daily throughput of this tunnel has improved as a result of the toll increase for private cars at the cross-harbour tunnel on September 1, 1999. The market share, however, has only slightly improved.

During the year under review, both the "Star" Ferry and Hongkong Tramways continued to provide excellent services to the public and remained popular with tourists. According to a local survey, "Star" Ferry was ranked No. 1 in ferry services and No. 3 in overall rating for the entire public transport industry in Hong Kong. "Star" Ferry service was also named in the "50 places of a lifetime" by the National Geographic Traveller in its special collector's issue in 1999.