Boston, MA -- (SBWIRE) -- 05/28/2013 -- We expect the increase in land released for housing and the transport projects in 2011 and 2012 to provide a solid base to support construction output in 2013. However, construction growth is unlikely to surpass previous highs, because we believe the projects that will be potentially released in 2013 are unlikely to surpass previous volumes. We are therefore forecasting construction growth in Hong Kong to decelerate from an estimated 10.6% in 2012 to 4.0% in 2013. This outlook, however, does not mean a dearth in growth opportunities in the city as the government has a large number of construction projects in the pipeline.

Key developments in Hong Kong's infrastructure sector:

- In 2012, the government started a detailed planning and investigation study, including an assessment of the feasibility and cost-effectiveness, for the construction of a desalination plant on a reserved site in Tseung Kwan O, with a view to tapping sea water as a water source. The anticipated output capacity of the desalination plant is expected to account for 5-10% of Hong Kong's total water consumption. As of March 2013, the feasibility study was still ongoing.
- Several contracts for the Shatin-Central Link rail project were awarded. In January 2013, a joint venture (JV) consisting of Gammon Construction and Kaden Construction secured a HKD3.4bn (US$440mn) contract to build two running tunnels covering 1km of track. In the same month, a JV consisting of Leader Civil Engineering Corporation and Sembawang Engineers and Constructors secured a US $215mn contract in Hong Kong to build the Hill Station for SCL. In March 2013, Leighton Holdings was awarded a US$681mn contract to build the Hung Hom Station, as well as the stabling sidings for the SCL.
- In the 2013/14 budget announcement, the government stated that it was preparing for the redevelopment of the Queen Mary Hospital, Kwong Wah Hospital and United Christian Hospital. The combined cost for these projects is to reach as high as HKD25bn. In addition, it is planning to use HKD$20bn for the construction and refurbishment of several public hospitals and clinics, including the construction of Tin Shui Wai Hospital and the Centre of Excellence in Paediatrics, the refurbishment of Hong Kong Buddhist Hospital, as well as the reprovisioning of the Yau Ma Tei Specialist Clinic.

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