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Hong Kong's third runway proposal

Hong Kong airspace ‘too crowded’ for third runway expansion, say experts

PUBLISHED : Wednesday, 18 March, 2015, 12:25pm
UPDATED : Tuesday, 28 April, 2015, 10:55am

Hong Kong’s crowded airspace is like a “saturated water pipe” and would prevent a multi-billion dollar third runway at the city’s international airport from meeting its expansion target, the former Observatory chief said today.

Former Observatory director Lam Chiu-ying cast doubts on the cost-effectiveness and financing plan of the proposed HK$141.5 billion third runway at Chek Lap Kok airport, saying that airspace in the Pearl River Delta was already too busy to accommodate more flights.

Upon its planned completion in 2023, the runway will reportedly allow Chek Lap Kok airport to serve 30 million more passengers a year.

But speaking during an RTHK radio show, Lam gave the example of a newly-built third runway at Guangzhou’s Baiyun International Airport. He said the facility, opened in February, had increased the airport’s traffic by just 10 flights per day because of a lack of airspace in the region.

Hong Kong airport faced the same problem, said Lam, who is now convener of concern group People’s Aviation Watch.

“The flights have to enter an airway that is now like a saturated water pipe,” he said. “Even with an extra runway, you cannot send more flights into the skies”.

His view was echoed by former civil aviation department head Lam Kwon-yu, who said officials had so far failed to give details on whether mainland China would allow Hong Kong to use some of its airspace.

The former aviation chief agreed that without more airspace, a third runway would not meet its expansion target.

He said Hong Kong could reorganise its airport resources to focus on providing more international flights when cross-border links such as the Hong Kong-Zhuhai-Macau bridge and the high speed rail link to the mainland are completed in future.

“Hong Kong should make more use of its advantage, which is our international network,” he said. He added that this could attract mainland travellers to use Hong Kong’s international flights.

Lam Chiu-ying was also opposed to the current financing plan – in which funds are to be drawn internally from the Airport Authority’s surpluses, user charges – said to be HK$180 per departing passenger – and external financing via bank loans and bonds.

The authority will also stop paying annual dividends to the government – its sole shareholder – denying the public purse of about HK$50 billion over the next 10 years, based on last year’s figures.

Lam Chiu-ying said raising funds via loans and bonds would make the airport vulnerable to the external economic environment. He said there was a risk, although it looked small, of the authority being left in the red if the global economy receded significantly.

READ MORE: Passengers to pay HK$180 construction fee for new Hong Kong runway under funding plan

“In that case the airport may go to the hands of foreign investors,” he said. “The airport holds a strategically significant position from the national defence point of view. It cannot afford to go into foreign hands.”

He said the authority should drop the current financing plan and instead seek public funds from the Legislative Council.

Economists however, said that the authority’s plan to finance the third runway is viable and that an expected rise in US interest rates should have little impact on the plan.

Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, said that the expected increase in United States interest rates will not be large. It means that it will not push up the interest rate of the authority’s external financing via bank loans and bonds by much.

“If the authority wants to lower the controversy generated by the runway’s cost, it can issue more bonds,” he said.

Bank of East Asia chief economist Paul Tang Sai-on said the financing plan is feasible because it is a “multiple-channel approach”.

“A multiple-channel approach is the best option because it reduces the risk,” he said.

He said Hongkongers should not just look at how much the runway will cost, but how much returns the authority will be able to generate.

Chek Lap Kok airport served more than 63 million passengers and processed 4.4 million tonnes of cargo last year.