Cost-benefit analysis of the Green Deck development : final report

Abstract

The area of Hung Hom Station and the Kowloon entrance of the Cross Harbor Tunnel currently serve as a major transportation route for rail and road vehicles, as well as pedestrians. To improve the local environment and revitalize the district, Green Deck was proposed by the Hong Kong Polytechnic University (PolyU) as an innovative social project to bring long-term benefits to the Hong Kong society. This study aims to demonstrate the economic feasibility of the Green Deck development by adopting a cost-benefit analysis approach. Both tangible and intangible costs and benefits were considered to compute the net present value (NPV), Benefit-Cost Ratio (B/C ratio), and the Internal Rate of Return (IRR) to decide whether the Green Deck project is a viable and beneficial investment to the society. The result shows that the Green Deck project has a B/C ratio of 1.35, which falls within the interval of the B/C ratios of other urban green infrastructure development projects in Asia. The project will be paid back in 2053 with an NPV of 3.53 billion HKD and an IRR of 5.5%. Sensitivity analysis indicates that the NPV would be significantly influenced by the number of visitors. Marketing strategies, such as collaborations with the surrounding art and cultural institutions, are advised to be adopted to attract more visitors to increase the NPV. The findings of this study present quantitative costs and benefits of the Green Deck development, which can serve as a reference in the decision-making process.