With a growing population and continuous development, moving people and goods around in Hong Kong has always been a great challenge. The Government has to ensure that this is carried out in accordance with sustainable development principles. It involves planning and implementation of the further expansion and improvement of the transport infrastructure, with emphasis on railways; further promoting the use of public transport services by maintaining their quality and improving their coordination; effectively managing road use to reduce congestion and promote safety; and continuing to support environmental improvement measures in transport-related areas.

There have been significant achievements in railway development. The East Rail Tsim Sha Tsui Extension connecting Hung Hom Station and East Tsim Sha Tsui Station was completed and commissioned on October 24. It provides a second rail interchange between the Kowloon Canton Railway (KCR) East Rail and the Mass Transit Railway (MTR) system and eases congestion at Kowloon Tong. The Tai Wai to Ma On Shan Rail Link was commissioned shortly afterwards on December 21, and provides convenient rail service to the population in the new towns. Construction of the MTR Corporation Limited (MTRCL)'s Disneyland Resort Line is progressing well for target completion in 2005 to tie in with the opening of Hong Kong Disneyland. Construction of the Sheung Shui to Lok Ma Chau Spur Line is in full swing for target completion by mid-2007 to meet the growing demands of cross-boundary passenger traffic and to ease congestion at Lo Wu.

Several other railway projects are in the pipeline. The Kowloon Southern Link scheme was gazetted on March 26. Construction is expected to commence in mid-2005 for commissioning in 2009. As regards the Sha Tin to Central Link, which would extend East Rail across the harbour to Central and West Rail to Ma On Shan via Hung Hom, Southeast Kowloon and Diamond Hill, Kowloon Canton Railway Corporation (KCRC) submitted, in September, a Draft Final Proposal to the Government. The proposal is now under government assessment. Furthermore, in response to the Government's invitation, MTRCL submitted the West Hong Kong Island Line and South Hong Kong Island Line Preliminary Project Proposal in March for the Government's assessment.

During the year, several major road projects began, including improvements to Castle Peak Road between Ka Loon Tsuen and Siu Lam, to Tung Chung Road between Lung Tseng Tau and Cheung Sha, and construction of Stonecutters Bridge on Route 8. There has also been significant development in the planning of a road link between Hong Kong and Pearl River West. The Hong Kong-Zhuhai-Macao Bridge Advance Work Coordination Group, set up by the governments of Hong Kong, Guangdong and Macao, has established a project office in Guangzhou and has commissioned a feasibility study on the bridge.

In traffic management, a comprehensive Intelligent Transport Systems (ITS) Strategy, which sets out a plan for the deployment of advanced information and telecommunication technologies to enhance the safety, efficiency, reliability, and user and environmental friendliness of the transport system in Hong Kong, was finalised in 2001. The ITS Strategy features two core projects — the Transport Information System under development and the Journey Time Indication System, which has been put into operation.