to expand its container terminals as early as September, a government official said.

Hutchison Whampoa Ltd., Jardine Matheson Holdings Ltd. and other port operators are making progress in talks to build Container Terminal 9, the official said. Construction was delayed since 1992 because of objections from China and infighting among the companies.

"We are moving in the right direction,'' said Tony Clarke of the government-run Port Development Board. "September is our target. That is what we're shooting for.'' An agreement to reallocate berths in CT9 and proceed with construction would end a dispute that has become one of the most visible symbols of China's ability to meddle in Hong Kong's business affairs. It also would expand the capacity of the world's busiest container port.

Both would give a fillip to the British colony's $36 billion-a-year shipping and port-services industry. That, in turn, might boost business confidence.

Speculation is growing that Jardine Matheson, Hutchison Whampoa Ltd.'s Hong Kong International Terminals, and Modern Terminals Ltd., jointly owned by Hong Kong's Wharf (Holdings) Ltd. and Swire Pacific Ltd., are near agreement on CT9, Clarke said. "We've heard many rumors, but we cannot comment,'' he said.

Beijing initially objected to CT9 because the British-controlled Jardine supported democratic reforms in Hong Kong. Jardine and China viewed each other with mutual distrust since the British conglomerate's founders helped wrest Hong Kong from China in the 1840s.

Representatives of HIT, MTL and Jardine declined to comment on reports they reached an agreement to reallocate berths in CT9. The Hong Kong Standard reported MTL agreed to give two existing berths to a Jardine-led group in exchange for development rights to Jardine's two CT9 berths at Tsing Yi Island, northwest of central Hong Kong.

"These talks are confidential. We have no comment at this time,'' said Percy Weatherall, the managing director of Jardine's Bermuda-based Hongkong Land Holdings Ltd.

The talks began in January when Chinese officials agreed to the building of CT9 on condition that the port be reorganised. Beijing wanted the berths of each operator to be close enough together to serve massive modern container ships.

The Hong Kong government hopes the operators will resolve their dispute in time to submit their plan to a Sino-British panel in September.

"We're optimistic we can resolve this matter soon,'' said Clarke at the Port Development Board.

The government has no firm plan on what will happen if the talks remain deadlocked, Clarke said. The government doesn't have a legal obligation to honor the first award if the bidders don't fulfill their promises.