New runway? We'll worry about the money later
Jake van der Kamp
The public has been given three months to decide if they want a third runway by 2030. Funding details will not be available until after that.
SCMP, June 4
I ask you to imagine yourself buying a new car on this basis. You walk into the showroom (in this case you are pushed into it) and, after making you his friend, the salesman goes into his pitch:
'Now look, Sir, the important thing here is what kind of car you really want. Let's not talk about how you pay for it just yet. We'll come to that later. We deal with the important things first. What do you really want?'
'Well,' you say, 'if we're not going to talk about paying for it then what are we doing standing by this boxy little 1.4 litre put-put? What I want is the one you've got out front there by your show window.'
'Goooood choice,' says the salesman. 'Now that's our Z 972 Belchflame and it's a wonderful machine. Shall I put you down for it?'
'I like it,' you say. 'But hold on a minute. I'll have to figure out first how to pay for it. How much does it cost?'
'Oh that's a detail for later consideration,' says the salesman. 'We're dealing with the important thing first, with the question of what you really need. Now, what kind of options would you like with your Belchflame? I'm afraid the sunroof is optional and the standard model is only a 4 litre. You'll want something bigger, won't you, and turbocharged too.'
'Yes, but I have to know whether I can pay for it,' you insist.
'Oh, well now, Sir, if we really do want to deal with minor matters so soon in the selection process, the Belchflame is a bargain at HK$4 million.'
'A what!' you exclaim. 'Show me that 1.4 litre one again.'
'I'm afraid I can't do that, Sir,' says the salesman. 'We have just passed our product consultation period. I've given you plenty of time to object to this proposal and you have not formally done so. Others involved in this question, me for instance, say it's good for you and have voted for it. I'm afraid the matter's settled, Sir. You have bought the Belchflame.'
'But how can I buy it before I'm even given a chance to decide whether I have value for money in this car?' you protest.
'That's your problem, Sir,' says the salesman. 'For our part, we have adopted our sales and purchase procedures directly from the Hong Kong government. The public is given a period to decide if they want a car. Funding details will not be available until after that.'
Yes, it's just that silly. We are being told by our bureaucrats not to bother our poor little muddled heads with the question of whether the proposed third runway represents value for money. First we must commit ourselves to whether we want a runway or not. Then we'll be told how we pay for it. If we object at that point we'll be told it's too late. We are already committed.
Neat sales trick, huh?
My own guess is that it is being done this way because the bureaucrats have already done a deal with the airline/hotel/tourism lobby to drop the bill on the taxpaying public rather than on airport users.
Here is how it will work. The government will contribute the lion's share of the capital as a direct equity injection on the basis of the airport's existing target return on equity of 5 per cent. This will be done on a single till basis - rents from shops in the terminal will be lumped in with airport landing fees.
This combination, at present, returns more than 5 per cent (all from the shops) at the existing airport complex and the lobby will argue that it will continue to be so with the third runway, conveniently forgetting that we are now talking half the space at twice the cost.
When the inevitable shortfall then materialises, the argument will be that 5 per cent was only a target and you can't always count on hitting the target bang-on.
If anyone then proposes higher direct user fees to make up the shortfall, the lobby will insist that the financing method was cast in stone and no changes can be made.
You and I will then find that certain fingers have been dipped into the public purse once again without any prospect of the money ever coming back. And the rich will get richer and the poor will get poorer. Wait for it.