Passengers to pay HK$180 construction fee for new Hong Kong runway under funding plan
Airport Authority will self-finance HK$141.5b scheme, to be unveiled in 2023
The construction funding of a multibillion-dollar third airport runway is set to bypass legislative scrutiny under a financing plan that includes levying surcharges on passengers and airlines.
Adopting a "user pays" principle, the plan circumvents the need for vetting on the Legislative Council's Finance Committee, raising concerns from lawmakers about the risks of reduced accountability.
But Fred Lam Tin-fuk, chief executive of the Airport Authority, said the financing plan was the "fairest" method.
He said: "Our suggested user-pay principle makes good sense, because subsidising the project through the government means local taxpayers would be footing the bill for overseas passengers."
The Executive Council gave its long-awaited approval to the authority yesterday to build the runway, with construction works possibly starting as early as next year despite unresolved issues about regional airspace and a judicial review over its environmental impact report.
Upon its planned completion in 2023, the runway will allow Chek Lap Kok airport to serve 30 million more passengers a year.
The latest budget is set at HK$141.5 billion - but taxpayers are to be spared any expense as funds are to be drawn internally from the authority's surpluses, user charges and external financing via bank loans and bonds.
But the "self-financing" plan will entail the authority's denial of annual dividends to the government - its sole shareholder - and lead to lost public revenues of about HK$50 billion in the next 10 years based on 2014 figures.
Lam did not say if the plan was designed to get round the Finance Committee. Lawmakers' filibustering in recent years has delayed landfill expansion and incinerator projects.
Under the financing plan, departing travellers must fork out an "airport construction fee" of about HK$180. But Lam said: "With Exco recommendations, we will look into whether it is possible to increase internal funding or borrowing further, and reduce the charge on passengers."
Meanwhile, fees for carriers will "go back to their pre-2000 levels", reversing a 15 per cent cut in landing and parking fees - HK$25,790 and HK$2,490 for a Boeing 747 - in place since 2000.
Cathay Pacific welcomed the news, but hinted the authority was "capable of financing the construction … through its own means without the need to impose additional financial burden on users". Dragonair also said the project could be self-funded.
Pan-democratic lawmakers expressed worries over the apparent attempt to bypass Legco. Democratic Party transport policy spokesman Wu Chi-wai accused the authority of playing "financial tricks".
"One should bear in mind the lesson of the cross-border high-speed railway, which was passed in haste and is now witnessing problems during construction," Wu said, referring to a major legal sticking point over a joint immigration checkpoint.
He also said that, by withholding dividends to the government, the authority was in effect using public money to fund the works. Lawmaker Albert Ho Chun-yan, who sits on the authority's board, said he proposed in a board meeting yesterday that the government seek Legco support by tabling a motion, "otherwise the project should not be started".
Analysts expected the authority to face higher costs as the government had warned repeatedly of increases in interest rates. A source at the authority, however, said it had considered this factor. Lam said the authority would "bear all responsibility" for any cost overruns.
Apart from the new runway, other new facilities include 57 parking aprons, a runway concourse and an expansion to Terminal 2. The project will cover 650 hectares of reclaimed land, including the Chinese white dolphin's marine habitat.
Secretary for Transport and Housing Professor Anthony Cheung Bing-leung said the current dual-runway system was fast reaching capacity and that a third airstrip was needed to help maintain the city's competitiveness. "The third runway system is more than a transport infrastructure project. It is essential to keep our economy going."