Zhongshan-Shenzen Tunnel Redux

In his Monitor column on 14/02/06, Jake Van Der Kamp argues that the real reason for the Zhongshan-Shenzen Tunnel is to remove Shenzen's stranglehold on Cross-Boundary revenues:

Imagine yourself a senior Shenzhen government official. You happen to sit astride the chokepoint of road access to and from Hong Kong and you and your mates in the Guangdong provincial government have a great deal of authority over who will be allowed through and who will not.

It is the ultimate in toll booths and you have so tight a control over it that you do not need to stick out your hand directly at an actual cross-border toll booth. You can collect your money in much more refined ways.

For instance, you can control the issuance of cross-border vehicle licences and keep them in such short supply that the prices or rents for them go way up.

...

The study estimates that the sting for road haulage across the border is $1,200 a trip. It is no wonder that our port is under competitive strain. We are not talking peanuts here.

One of the reasons the Mainland (and Shenzen in particular) can get away with profiting from Hong Kong is that we're probably the richest city in China. Mainland Chinese want to make as much money as possible from anything to do with Hong Kongers, and I think they tend to view us as not really part of China.

But on this issue, the bridge vs tunnel cost is $60bn vs $6billion. Is the total saving worth paying a little extra to Shenzen? We're going to pay the 'sting' anyway, and it's highly unlikely that Zhuhai will charge much less than Shenzen, so why risk huge environmental damage to Lantau and line Gordon Wu's pockets with taxpayer money when the Guangdong government will provide us with almost as good a connection for far less money?

Given that Zhuhai knows Hong Kong truck drivers (and associated companies) will pay $1200 to go via Shenzen, there's no way they're going to charge less for a shorter route to the Western Pearl River Delta. I can easily see it being more, and the reason being quoted as "well, you're saving four+ hours over having to drive via the Humen bridge".

The 'Market Price' in this case will be how much *additional* squeeze can be put on Hong Kong truck drivers to take a shorter route. I do not for one second believe that the Zhuhai authorities will selflessly forego the extortion fees they see Shenzen collecting from Hong Kongers.

('free-market? What free market? It's all heavily entrenched interests trying to distort the market as much as possible in their favour. Ideologues who think that there's some kind of 'invisible hand' which will magically make business fair are deluded. There is no real free market in Hong Kong for these kinds of things.)