Government Transport Land-use Planning and Development by Implicit Contract for Franchised Buses and Ferries in Hong Kong, 1933-1972

As a contribution to policy research on monopolies in planning for public utilities and the role of the state in ordering the coordination of land use and transport in a market economy, this paper evaluates a couple of hypotheses informed by the Coasian economic concept of an implicit contract. There have been public subsidies to franchised bus and ferry companies in Colonial Hong Kong in the form of concessions in kind with spatial land-use transport implications. The hypotheses were evaluated by a comprehensive archive survey and documentary analysis of the clauses in relevant franchise documents, Crown Leases, government memoranda, and expert writings on buses and ferries. The findings revealed that there was no real land price subsidy provided for within or outside the franchise or lease documents, but there were substantial indirect subsidies during the study period. These were provided not only in terms of the free provision of bus terminals and piers, but also their planned combination on government land, as well as the strategic positioning of bus terminals in newly-developed government housing estates and new towns. The land-use public transport planning strategy shaped the urban structure of Hong Kong prior to the takeover of the companies by developers. The critical role of the government vis-a-vis developers as a super landlord is discussed.