By
Rebecca Gibson |
Hong Kong’s marine industry contributes significant levels of sulphur dioxide and nitrogen oxides to the environment, leading the government’s Environmental Protection Department (EPD) to reduce the sulphur limit of marine diesel fuel from 0.5 per cent to 0.05 per cent.
Many operators have expressed concerns about increased operating and fuel costs when the legislation is introduced in 2014. However Johnny Leung Tak-hing, general manager of The Star Ferry Company, which operates a nine-ship fleet on two franchised ferry routes between Tsimshatsui, Central Tsimshatsui and Wanchai, and one harbour tour route, does not anticipate that the move will significantly affect the company.
“The EPD recently tested both the high sulphur content and low sulphur content fuel in two obsolete models of marine diesel engine and found that switching to a cleaner alternative would not have a significant impact on fuel consumption and power output levels,” he explains. “The test also showed that older engines can operate using marine diesel oil with a 0.05 per cent sulphur content, meaning we have not had to make any costly alterations to our fleet. Estimates indicate that the new fuel is around ten Hong Kong cents more expensive than the current fuel. If this is the case, this will have little impact on our fuel expenses.”
Consequently, Star Ferry expects to continue offering the same frequency and quality of service that enabled it to gain its legendary status with both daily commuters and visiting tourists.
“Despite a range of challenges, we have managed to retain our competitive position by continuing to offer affordable fares and a reliable service to our passengers,” says Leung. “Instead of increasing fares to meet rising operational costs and stay profitable, we generate additional revenue by renting shop outlets to vendors, providing harbour tours and leasing our ferries and part of the ferry piers as venues for events, wedding ceremonies, birthday parties or corporate functions.”
Following the company’s move to the business district’s Central Star Ferry Pier as part of the government’s Central Reclamation Phase Three Project in November 2006, it also acquired more than 1,000 sqm of indoor and outdoor function and advertising space. Highlighting the pier’s importance, Leung adds: “Last year more than a quarter of the company’s total revenue was generated by pier and ship advertising, and shop rental.”
Star Ferry is set to capitalise on its current success by relocating its services to the new Wanchai Pier next year. The move is part of the government’s extensive Wanchai Reclamation Scheme, during which it will construct a new pier 100 m south of the existing Wanchai (East) Pier, which will be demolished and reclaimed to accommodate the Central-Wanchai bypass.
In addition, Star Ferry is developing a proposal to base its oldest ferry, Celestial Star, at the future Ferry Square, which will be located on the new Central waterfront next to the Hong Kong Maritime Museum. “Although the relocation plan is still in the initial stages, various stakeholders have welcomed the idea,” says Leung. “By basing the ferry at the Central Pier, we hope to add a more vibrant feel to the new waterfront. We also intend to convert the unused ground floor of the Central Star Ferry Pier’s Terminal Building into a market with various cooked food and beverage outlets to help generate additional revenue.”
Leung remains positive for the future of the ferry company, concluding: “Despite current and future challenges, Star Ferry has managed to remain profitable and continues to offer a high-quality, safe and reliable service for both local commuters and tourists hoping to ride on one of our iconic ferries.”
This is an abridged version of an article that appeared in the Autumn/Winter 2013 edition of International Cruise & Ferry Review. To read the full article, you can subscribe to the magazine in printed or digital formats.