Consolidation Of On-Line Trade Management In Hong Kong

by Mary Swire, Tax-News.com, Hong Kong

06 January 2003

Hong Kong's major trading houses Hutchison Whampoa and the Wharf Group are now set to announce their OnePort joint venture, an online trade portal to manage trade flows at the SAR's main container port. It's also expected that Tradelink, the government-backed trade portal for regulatory documentation, will take a 20% stake in the joint venture.

"The announcement will cover the formation of Oneport, the company and our alliance with Tradelink," said an insider to the South China Morning Post. "It's been a long time coming and we look forward to getting this out in the open and running with the issues."

The government had been due to issue two more licenses for on-line trade management, but with Tradelink's involvement in OnePort, this has become less likely.

Tradelink, which currently has a monopoly on the electronic transfer of regulatory trade documents in the SAR, will also shortly complete a share swap with Logistics Information Network Enterprise (LINE), a Hutchison subsidiary which provides supply chain solutions for mainland trade.

Tradelink Electronic Commerce Ltd is a joint venture between the Hong Kong SAR Government and other private sector shareholders who are all key players in the international trade cycle in Hong Kong, either directly or as representative organisations. The Government's shareholding, through the Commerce, Trade & Industry Bureau, is just under 42% and other shareholders include HSBC Holdings, Pacific Century CyberWorks, China Resources (Holdings), Swire Pacific, Modern Terminals and Hongkong International Terminals.

Under an agreement signed with the Government in 1992, Tradelink provides a 'single electronic gateway' between the trading community and the Hong Kong SAR Government for a range of specified trade transactions. The current franchise runs from January 1997 to December 2003. As well as providing an electronic link to Government, Tradelink's services offer a number of value-added transaction management facilities including message checking, matching and validation; message authentication and security; electronic billing and payments; and message archiving and audit trail services.

The Commerce, Trade and Industry Bureau is thought to be keen to divest itself of its interest in the company once its monopoly franchise expires at the end of the year.

Tradelink, LINE and OnePort are involved, along with other partners, in a coalition which is offering to develop a Digital Trade Transport Network (DTTN) for Hong Kong using existing technology in preference to a green-field solution proposed by Accenture. It is widely agreed that the SAR badly needs to co-ordinate the logistics of multi-modal trade flows through the proposed DTTN. The coalition told the government that its alternative proposal could be up and running "by the second half of 2003" at a cost of HK$120 million in the first two years, as against a cost of up to HK1 billion for the Accenture plan, which would take up to three years to implement.

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