Comment – As reported by The Standard, this breakthrough is good news for Macau’s future and another step forward to get this issue resolved soon. A link between these three city’s will be important for their future prosperity and financial growth. These talks about immigration and financing should continue in the best spirits and interest of all parties involved.

Read full article by The Standard - In an apparent effort to rescue stalled discussions over the troubled Hong Kong-Macau-Zhuhai bridge project, the SAR government has ventured several options to finance the HK$58 billion price tag – but analysts say the spat over money merely underscores deeper cross-border tensions.

Chief Executive Donald Tsang Yam-kuen, speaking Wednesday in Guangzhou, where he and other officials attended the Ninth Plenary Session on Hong Kong-Guangdong Cooperation, said the three sides are moving past the gridlock over a one- stop immigration checkpoint and onto financial arrangements.

The SAR government will surrender its vision for a single immigration checkpoint and look into locating its own clearance port in Guangdong.

“I think we are now seeing the end of the tunnel,” Tsang said.

However, City University political analyst James Sung Lap-kung said he doubts the compromise means authorities will be able to reach a quick resolution. While relations between Guangdong and Hong Kong are “at their strongest in history,” he believes residual political tensions between the two sides continue to hinder negotiations. “Saving face has always been a problem for the two sides. Hong Kong is a prosperous city and often liases directly with the central government, and this has always made Guangdong authorities somewhat jealous,” Sung said. “So when it comes to cross-border arrangements, it’s a sensitive issue – Guangdong is afraid it will lose power to Hong Kong.”

The situation is worsened by fierce competition to attract Hong Kong’s top talents, according to Cheung Hoi- cheung, a researcher at Lingnan University’s Center for Asian Pacific Studies. Shenzhen, for example, has built a strong financial services sector – once unique to the SAR – that has lured away many of the territory’s brightest graduates, he said.

As such, Cheung said he was not optimistic about Tsang’s proclaimed “breakthrough” Wednesday.

Having three separate immigration checkpoints, Cheung said, “reflects [Hong Kong and Guangdong] are still fighting for rights, and regional competition.”

And, with both sides focusing on gaining the upper hand, CityU’s Sung said any financial talks over the project are bound to be particularly touchy. The SAR government sees the bridge as a “commercial investment” and is reluctant to invest public funds. But at the same time, both Guangdong and Macau believe the bridge will “serve Hong Kong’s best interests” and that the SAR government should shoulder most of the financial burden. Included in the four financing options outlined Wednesday by environment chief Sarah Liao Sau- tung were two government-funded schemes: one funded wholly by the central government, the other shared equally by the three parties.

The other two options – international tendering and build-operate- transfer – entails foreign investment by private companies.

While the first two options obviously carry political implications, the latter two also involve a complicated set of issues, according to City University associate professor of economics and finance Fred Kwan Yum-keung.

The international tendering option will effectively increase China’s foreign direct investment, now second in the world only to the United States.

Moreover, privately operated assets – while still regulated by the government – are often more efficient, he said. But mainland authorities will need to decide whether they are comfortable allowing a foreign company to own such a large public asset.

This problem could be partially solved by taking the build-operate- transfer route, where a private company finances, designs, constructs and operates the bridge – but only for a specified period of time. The downside of that option, however, is the public may face higher toll charges as the operator scrambles to match return and investment in the limited period of time.

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