The reclaim game
The rationale for capital and maintenance dredging is one thing but land reclamation is driven by an entirely separate set of criteria. Many ports still have little idea of the economics involved and so dont even consider reclamation.
In particular, as is often the case where densely populated cities have grown up around their ports, land values can be extremely high in the vicinity of the old port where warehousing, wharves and the waterfront can make for attractive residential and commercial developments. In such cases there may be good reason to consider reclamation.
Whilst Hong Kong and Singapore may have led the way thirty years ago, now China and Malaysia, the UK, France and the Netherlands have all embraced the idea of extending their ports seaward then recovering old dock areas close to the city as prime real estate. Thus all or part of the reclaimed port extension is paid for by creating attractive waterside areas for development and sale. In strategic terms, such asset plays can make sound sense.
And not surprisingly, the dredging contractors are eager to open the minds of port planners and developers finding themselves in such situations. Whilst reclamation might look expensive, if they compare the square metre cost with current land values in congested urban areas, they might be pleasantly surprised. (PS will be looking more closely at the land reclamation business in the new year. )
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