Magazine

Wu's Big Dream


In his cluttered office perched 64 floors above Hong Kong's streets, Sir Gordon Wu fingers a time-worn talisman: a vintage booklet celebrating the opening of America's Chesapeake Bay Bridge-Tunnel in 1964. Wu has admired that span for four decades. Now, he wants to build its match in China: a massive $1.9 billion causeway, bridge, and tunnel to link Hong Kong with Macau on the western shore of the Pearl River Delta.

The crossing would be the crowning glory of a career that has made the 66-year-old Wu Asia's most visionary builder. In recent weeks, the project--which he has nurtured on and off for two decades--has gathered critical momentum. Wu is riding a crest of support from recession-weary Hong Kong citizens who are looking for a white knight to lift their spirits. Says Wu of the bridge: "Build it, and they will come."

Although Wu's vision has sometimes exceeded his ability to make a profit, it's easy to see the appeal of the project for Hong Kong. The city of 7 million is struggling to find a new identity as it endures its fourth consecutive year of falling prices amid record 7.8% unemployment. While Hong Kong's economy has stagnated since the British left in 1997, China's annual growth has topped 7%. Hong Kong's challenge is to find a way of piggybacking on China's success.

Wu says his bridge can make that happen. No more would the tiny territory be stuck at the end of a cul-de-sac, connected to China only by a trio of crowded crossings to the north. The 29-kilometer bridge would open a major new land route. "It's common sense," says Hong Kong Trade Development Council Chairman Peter Woo. "The more we increase the volume of trade, commerce, and industry, the more it's going to increase job opportunities in Hong Kong."

At nearly $2 billion, Wu's project is no slam dunk. Although attitudes are softening, the Hong Kong government has long said that a link won't be necessary to ease traffic bottlenecks until at least 2020. Even if Wu's consortium musters all the cash it promised, the project needs to go through a formal planning process to get the go-ahead. Wu figures that will take 18 months, and construction would require another three years. Hong Kong Chief Executive Tung Chee-hwa and his counterpart in Macau, Edmund Ho, are squarely in favor of the bridge, sources say. But Guangdong Governor Lu Ruihua is said to be opposed because he fears a new Hong Kong-China connection would undermine Shenzhen, the bustling city of 4 million just north of Hong Kong. Lu's office declined to comment. The central government has the last word, though, so Hong Kong and Macau may be able to sidestep Lu by making a direct appeal to Beijing.

However, Wu's blunt, outspoken character has made him enemies in both China and Hong Kong. Li Ka-shing, Hong Kong's richest man, and his deputy, Canning Fok, have both poured cold water on the causeway-bridge idea. Li and Fok run Hutchison Holdings, which has big port interests in Hong Kong and Shenzhen that could be threatened by the bridge. Wu, who doubles as chairman of the Hong Kong Port & Maritime Board, a government advisory board, has sparred with Fok over port-related issues in the past. But Hutchison now says it won't stand in the way if the project is subsidy-free.

Wu's infrastructure visions haven't always fared well. Wu, who was knighted by Queen Elizabeth II in 1997, had an early triumph when his Hopewell Holdings Ltd. built China's first prominent foreign-backed power station. A superhighway connecting Hong Kong with Guangzhou, the capital of Guangdong, was another first. But Wu ran into trouble in the mid-1990s, when he started building power plants and other projects across Asia.

He soon ran out of money, and his empire was in tatters even before the Asian financial crisis. Cash-strapped Hopewell raised funds in 1996 by selling off its power-plant holdings, then raised more cash by floating junk bonds secured against the Guangzhou highway. Wu was also forced to write off investments in an Indonesian power plant and a mass-transit project in Bangkok. The trimming worked. Hopewell is back in the black and has little debt.

Despite the potential roadblocks, there's a compelling economic argument for the bridge project. The Pearl River Delta, with nearly 40 million people, is China's wealthiest area. But five years after Britain returned Hong Kong to China, the territory is still grappling with a separate political system--and stiff border controls--while nurturing economic integration. Hong Kong manufacturers employ some 6 million factory workers across the border--the main reason the Delta is the world's workshop, accounting for 40% of China's exports.

That success has come at a price. Land values in Shenzhen and on the east side of the Delta are rising, and labor costs are double the Guangdong average. Congestion in the east is increasing. A link to the far side of the delta, still much less developed than the area around Shenzhen, would "do a lot to enhance the economy of Hong Kong--and it could use a boost right now," says Victor Fung, chairman of Airport Authority Hong Kong.

The Hong Kong end of the bridge-tunnel would be just nine kilometers from Hong Kong's Chek Lap Kok airport. Already among the world's largest cargo centers, the airport handles 2.2 million metric tons of freight annually. More links with the mainland would drive further growth. And a possible new cargo terminal for ships on Lantau Island, between the bridge and the airport, would cement its role as a top regional hub.

The link could also support a budding tourist boom. Hong Kong's Disneyland park, set to open in 2006, is within easy striking distance on the eastern end of Lantau. And Macau would like to make it easier for Hong Kong high rollers to gamble in its casinos. The bridge "is the missing link," says Wu.

Can Wu turn a profit on such a project? The Chesapeake Bay Bridge that he admires defaulted on its payments to bond holders soon after completion and took almost 30 years to start making money. Wu plans to charge roughly $20 for a one-way car crossing, about what passengers now pay to take a one-hour hydrofoil from Hong Kong to Macau. He figures initial traffic will be about 15,000 vehicles a day, and he says he has lined up support from both Hong Kong and Chinese banks. "Money is no problem," insists the characteristically ebullient Wu. But he won't name the banks. And the two companies that Wu says have pledged to invest alongside his Hopewell Holdings--Shun Tak Holdings and Sun Hung Kai Properties--say they aren't yet ready to commit.

Even Wu concedes that it's premature to estimate the project's potential profitability because of uncertainty about traffic volumes. Analysts say Hong Kong should back the bridge only if it fits into a long-term transportation network plan. Wu doesn't have all the details. But he's delivering on vision. By Mark L. Clifford in Hong Kong


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