From BIM Technology to Electronic Vehicles: how does Hong Kong’s budget announcement support the development of sustainable mobility?


The Hong Kong government outlined $1 billion in its 2018-19 budget to drive innovation in the construction industry. The need to develop a SMART city approach is inevitable, but is this the missing link to help Asian cities like Hong Kong address their core issues around improving livability. Francis Au, Head of Hong Kong, looks at the positive impacts of the budget, but also looks at the impact of budget cuts around Electric Vehicles and what this means for sustainable mobility.

The recent budget announcement outlined a big surplus. This wasn’t unexpected, but what’s critical to note, is the sign of intent from the government to invest in the construction, innovation and technology sectors. This commitment is underpinned with a budget to invest $1 billion in a Construction Innovation and Technology Fund to boost the industry, with specific focus on BIM technology and Modular Integrated Construction (MiC).

These investments and incentives have the potential to drive Hong Kong’s smart city agenda. However, is a smart city focus enough to create fundamental change around Hong Kong’s housing affordability and overall liveability? On it’s own, probably not. But if both policy makers and the private sector embrace technology, data, and intelligent design, the acceleration of improving liveability, workability, and sustainability will certainly steer the city in the right direction.

The budget announcement also has positive implications for Hong Kong’s transport networks. Although Hong Kong ranked first overall globally in our 2017 Sustainable Cities Mobility Index, the right innovation and technology policies and practices are still important to advance Hong Kong’s sustainability agenda to meet mobility challenges.

The ability for people to flow easily through a city provides a strong foundation for economic and sustainable growth. In Hong Kong, our innovative and well-connected public transport network enables comprehensive mobility, stimulates business and enhances people’s lives. The sustainable upkeep of transport systems is an important contributor to Hong Kong’s success. The MTR Corporation’s track record in extending the transport network, running it profitably and keeping fares low sets a global standard.

Improvements are required, however, when it comes to environmental sustainability in our city. This showed as a weakness across the whole of Asia, not just in Hong Kong, in the Mobility Index. Only seven countries in this region ranked in the top 50 in our Index for ‘Planet’, environmental sustainability, with high levels of pollution creating health problems for residents and workers.

Recently, the Hong Kong media has demonstrated the need for tax breaks on private EVs to be resumed, on the basis that it will help reduce air pollution and support a SMART city vision. Additionally, the April 2017 removal of tax exemption for EVs has been blamed for a collapse in EV sales. Only 99 battery-powered private cars were sold in Hong Kong from April to December 2017, compared with 2,078 in the same period the year before.

However, there are risks in promoting private EV adoption without other complimentary policies to manage access to Hong Kong’s scarce road space. Private car use in Hong Kong is currently restricted through the application of high taxes for first registration and fuel. Neither of these apply to private EVs if the registration tax break was to be re-introduced and would risk private car usership reaching unsustainable levels, as lower priced EVs enter the road network. Moreover, private EVs do not significantly address Hong Kong’s road side emissions as the vast majority of the carbon emissions are produced by commercial vehicles – buses, trucks and minibuses.

With human dependency on fossil fuel based vehicles set to remain, we need more focus on zero-emission vehicles on the road in order to reduce urban pollution. Political regulation of zero emissions is a key driver for change and for greater adoption of EVs. If Hong Kong is serious about being a global leader in SMART and clean mobility solutions, the government and private sector will need to collaborate to help drive change. However, it is often a challenge to reconcile economic gains with environmental costs in Asia’s megacities.

As “Asia’s World City”, Hong Kong must find a way to create economic opportunities for all, improve quality of life and provide SMART and affordable infrastructure. Each of these factors is key to making Hong Kong a sustainable and livable city.

To become a hub for smart technology and improve residents quality of life, Hong Kong government policies must strike the right balance between People, Profit and Planet. With boldness of vision – the willingness to make brave decisions, financial investment and focus on relevant priorities – Hong Kong can create a more mobile, sustainable and connected future.

Additional Notes:

Some other welcome announcements in the 2018 budget:
  • The Government will take the lead in piloting Modular Integrated Construction (MiC) in public projects. It is considering extending the current gross floor area concessions for promoting green and innovation buildings to cover buildings adopting MiC.
  •  HK$50 billion pledged for innovation and technology (up from HK$10 billion last year) of which HK$20 billion is for the infrastructure of The Lok Ma Chau Loop.

Arcadis is committed to improving quality of life. While there is no ‘one-size-fits-all’ strategy for a sustainable city, mobility and transport are critical factors in improving a city’s prosperity and liveability to ensure its future competitiveness. Cities and their policymakers face enormous pressures as they strive to meet today’s mobility challenges, with rapid urbanization, aging infrastructure, population growth and climate change continuing to challenge our world’s cities. Advancing automotive technology, such as EVs and AVs, and diversifying urban transport systems can help gain competitive advantage, as shown in our Arcadis Sustainable Cities Mobility Index 2017. Cities that invest in improved and sustainable mobility enhanced their productivity, attractiveness and overall quality of life, showing that mobility does indeed favour the bold.

To find out more about the Sustainable Cities Mobility Indexdownload the full report below and see how major cities rank in the world.

Questions about this article


Francis Au

Head of Hong Kong & Macau +852 2830 3500 Ask me a question