Jake's View
PUBLISHED : Tuesday, 12 August, 2014, 12:25am
UPDATED : Tuesday, 12 August, 2014, 12:25am

Let the Hong Kong taxpayer off the hook for a new runway, please

Government claims a third runway is needed because of convenience – in that case, put a price on it and let travellers vote with their feet


Jake van der Kamp is a native of the Netherlands, a Canadian citizen, and a longtime Hong Kong resident. He started as a South China Morning Post business reporter in 1978, soon made a career change to investment analyst and returned to the newspaper in 1998 as a financial columnist.

Three-runway System Urgently Needed

Sponsored feature,
SCMP, August 8

They Certainly Favour Capital-letters And Dashes In-government. They also like fudging the issues and being selective with the facts when dunning the taxpayer to drum up taxpayer support for spending huge sums of the taxpayers' money.

I think these so-called sponsored features would do well to feature a disclaimer at the bottom - "Paid for by you to make you think our way." Yes indeed, we are still a long way from democracy.

But I was speaking of fudging the issues. Here is an example: "Besides, it would be inconvenient and time-consuming if travellers had to use [Pearl River Delta] airports instead of our own airport in Hong Kong."

I agree. It would indeed be inconvenient. But if you were paid compensation for it, how much would make you happy to put up with this inconvenience? Would HK$100 do the trick, HK$1,000, HK$10,000?

Somewhere in there you would put up your hand and say, "Yes, I take it." What you have then done is put a price on this inconvenience. You can do it the other way round, too. You can ask yourself how much more you would be willing to pay for the convenience of catching a flight from Chek Lap Kok instead of a delta airport.

And here is the big question. If you are the one who benefits from the convenience, shouldn't you be the one who pays the price? Why should the Hong Kong taxpayer pay it for you?

The issue here is not primarily the Chinese white dolphins (CWDs, as these sponsored features term them). The airport people would love to focus all the opposition on the dolphins. They know they can push the white dolphin aside in the end. It's just a red herring (Ow, bad one, Jake).

But what they cannot push aside is that gargantuan sum of HK$200 billion, which it is now estimated that a third runway will cost. The bill is sitting in the taxpayers' lap at the moment and that is where they want to keep it by avoiding any discussion of it.

Their line is that we must first decide whether we need a third runway and then we can talk about how we fund it. Hah!

Now, you may protest that an airport brings us vast social benefits in such things as tourism and the vanity of being able to call ourselves a transport hub and we cannot possibly set a price on this. Some things are more important than money, you know.

Very well but then tell me why these deals are always structured so that we pay the money and the other side contributes the social feelings of appreciation. Why don't we do it the other way round for once? We'll put in the thrills of joy and let the social beneficiaries pay us hard cash for them.

Just once? Please? If some things are more important than money then surely this is not true for the Hong Kong taxpayer alone.

But we can set a price on the convenience to the air traveller of having a third runway. It's part of any professional financier's bag of tricks.

It comes down to calculations of the net present value of a stream of projected future earnings across a range of arguable discount rates. Get the resulting figure up to a believable HK$200 billion and the third runway can be a goer.

My guess is that it can be made to work at an extra ticket cost of somewhere just under HK$1,000. My guess is also that if confronted with this, many travellers would say, "Thanks. Where do I catch the coach to the border?" And then we would not need to build a third runway.

But then tourists might not want to come here and our economy would lose out, you say.

Really? If the air traveller thinks that flying from or to here is not worth the extra money, why should the Hong Kong taxpayer think it is?

We can and we ought to make the user pay for this project. But the airport people won't do it. They have another victim in mind.




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