• Tue
  • Dec 23, 2014
  • Updated: 1:20pm
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

BIO

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.

You.

jake.vanderkamp@scmp.com

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virokick
The main beneficiaries of this 3rd runway will be airlines ( Cathay), property developers and tourism: all colluding at the expense of society.
The Net Present Value may even justify the huge initial outlay; but the returns are still questionable- we need to also factor in social cost such as why not channel this resources and land reclaim for housing shortage in HK instead.
Airports mostly created cheap low value added jobs - cargo handlers , airport ground staff, check in staff, ushers, limo drivers etc- rubbish low value added jobs.
We don't want more tourist and we don't need to compete with vicinity airports.
What we need is good quality jobs.
johnyuan
To me the biggest fudge in the pursuit of a third runway is calling it the addition of a third runway. Why a mere runway should be costing HKD 200 billions?
.
By drips of information we know the third runway is much more than just a runway. Besides a 2,400 hectare marine park throw in as an appeasement to environmental groups what whispering about is building a shopping mall probably of gargantuan size and gargantuan cost on new reclaimed land.
.
So the Airport Authority is diversifying its business expanding into non-airport operations to become most likely an amusement park operator of marine features and a landlord of that gargantuan shopping mall.
.
While having a second marine amusement park is questionable for locals alone, the huge cost of the shopping mall could never be justified in a normal business plan. Yet the Airport Authority stands to reap profits after spending not its own but the taxpayers’ money.
.
I think the Airport Authority is pretending that the public are all fool. Indeed we are if the Airport Authority can fudge all the way to get what it really wants – a gargantuan shopping mall on reclaimed land.
.
It sounds so familiar with the Kowloon West Cultural District project.
.
CY Leung should revisit both of these proposed shopping malls that biasely cooked up by Donald Tsang who pushed tourism at all cost. How about few billions spent on really needed service for local public?
.
I bet your conscience would say yes.
johndoe
If the airlines and the "tourism industry" really wanted this, they should be able to pool their hard earned dollars together and save it in an industry fund or trust. Then, they would be scrutinizing the costs themselves as business people rather than asking politicians to pay them money and then scrutinize them, which is a crony capitalist model that has not worked out very well for Hong Kong.
impala
I appreciate Mr van der Kamp's resistance to the footing of the third runway bill by the taxpayer. And he should continue it as long as he can.

Yet, let's face it: it will be futile. Our government is practically ran by the forces that will profit from the pouring of this HKD 200bn worth of concrete. There simply is no political force that can stop it, even if we were to see meaningful electoral reform in 2017 (fat chance).

A real shame, since indeed, it is highly doubtful that the third runway makes economic sense from a public expenditure perspective. If it would be as financially viable as its defenders claim, then the easy solution would be to allow a private consortium to build and then exploit the thing, thus indeed putting a price (per flight movement) on its use.

But dream on. It won't happen. Instead, another white elephant will emerge which we can list alongside the Kai Tak Cruise Terminal, the Stonecutters Bridge, the Macau-Nohai Bridge, the West Kowloon Cultural Basement etc.

Our concrete-eager government will continue to serve the vested-interests/functional constituencies/big business hand that feeds it, while neglecting or outright failing to perform its core duties in the areas of affordable housing, decent public health care, accessible quality education, and proper supervision of industries ranging from transport (ferries), food (rotten nuggets anyone?) and so on.
aab7772003@yahoo.com
Excuse me, but the government has the money to do both with vigor. Hong Kong was doing just that in the 1960s and 1970s. The issue here is the lack of will and the oppressive intervention from the mainland. Many of the same citizens say "I do not want to pay for someone elses´ housing, education and health care with my money because I have made it all by myself and I want someone else to pay for the world class infrastructure projects that make Hong Kong globally competitive."
53cc5f1b-5ea0-4270-9016-74420a320969
If the fat cats want a third runway, why not pay for it themselves and establish their own one-class airline (First Class, of course) with exclusive rights to use the runway, together with private corporate jets. Simple - (i) plump pussies satisfied, and (ii) taxpayers not shafted yet again.
r6b
"The HKIA is here to compete with global gateways WORLDWIDE."
What a load of theatrical drivel.
No - HKIA is not here to compete with Dubai or Heathrow or NYC.
Its purpose is solely to serve the best interests of HK and its citizens.
johnyuan
Indeed airport creates low pay jobs. Even airport security not a duty to be sneered at only pays HKD 15,050 a month. That is after three years on the job as reported yesterday. And also that is the latest adjusted better offer to lure ex-security people to return to work. I wonder if Hong Kong’s security workers are among the lowest in the world and seeing them as security doorman at a housing development by the Airport Authority?
aab7772003@yahoo.com
"You must be the same * that likes to focus on my postings. Hope you once a while can find something useful to you. I am sure others including CY Leung do. "
"I shall not response any further of your impolite but self-defeating 'rebutal'."
Do NOT eat your word by pretending to respond to other users´ posts when in fact responding to mine, out of obsession and desperation. You desperately need something useful to do, besides lying about what a NYC insider you are.

I could be in the legal profession as I could make tons of money from drafting all the legal contracts for all the projects, but I am not. It is amazing that you have not come to suspect that I am some evil imperialist western spy planted here just to advance the sales of Boeing and Airbus LOL! Developing a robust local aviation industy is nothing like land and equity speculation.
My father tells me that 40 or 50 years ago all the lawyers and stockbrokers still wore thick three-piece suits inside their air-condition-FREE offices in Alexanderia House, etc. at the height of summer. You are spreading wild LIES in some pleasant air conditioned environment. Who doesn´t insist on air-conditioning in Hong Kong at this day and age? Even the janitors do.
I see what you write in other posts; you want everyone else, pay, pay and pay to subsidize you. I will make sure your LIES will be exposed the very moment you spit out. People should form their opinions by learning how things actually work.
aab7772003@yahoo.com
It is so pathetic to repeat the imaginary trade off between the welfare of the citizens and the economic development. I am all for a fully democratic welfare state, but the idea that aviation is out there just to deprive the citizens of a better life is utterly absurd.
My previous posts from these links state why the idea of "a private consortium to build and then exploit the thing" would not work.
www.scmp.com/business/article/1557115/let-spoiled-airlines-fund-hong-kongs-third-runway-not-public-purse#comment-105095
www.scmp.com/comment/article/1555587/improving-airports-efficiency-fastest-way-ease-air-traffic-congestion?page=all#comments
www.scmp.com/business/article/1554322/keep-hong-kong-airport-wide-body-jets-and-ditch-need-third-runway?page=all#comments
www.scmp.com/news/hong-kong/article/1553618/airport-bosses-accused-manipulating-flight-figures-justify-third?page=all#comments
www.scmp.com/comment/article/1549621/hong-kong-airport-must-meet-global-demand-or-risk-falling-behind?page=all#comments

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