No increase in airport construction fees for third runway, Hong Kong transport minister vows
Charges for travellers will continue till project is completed in 2024, Anthony Cheung Bing-leung tells lawmakers
The fees, ranging from HK$70 to HK$180 for travellers, will be charged until 2024, when the project is scheduled to be completed, providing HK$26 billion of the funds needed.
“During the period, no further adjustments will be imposed,” Cheung told lawmakers during a Legislative Council meeting on Wednesday.
The transport chief made the pledge as legislator Abraham Shek Lai-him, from the real estate sector, asked if the Airport Authority could increase the fees as well as the landing charges imposed on airlines as it pleased in the future to fund the project.
“This will greatly affect Hong Kong’s economic development,” Shek said.
The authority has chosen to self-fund the entire project via three means without government subsidies, namely having the government forego its dividends until 2024 (totalling about HK$47 billion), charging the airport construction fee and other levies on airlines, and borrowing from the market to the tune of about HK$69 billion.
Cheung promised that any future adjustments to the landing charges would be in line with inflation.
“Since the landing charges had been frozen for many years, there were drastic adjustments this year. Future adjustments will be subject to a consensus with the industry and an approval from the Executive Council,” he said.
Construction of the multibillion-dollar project was kick-started in August with the reclamation of approximately 650 hectares of land.
In response to lawmaker Eddie Chu Hoi-dick, who asked if the government would be forced into subsidising the runway project if it incurred tremendous cost overruns, Cheung assured legislators that the government had no plans to undertake any responsibility for overruns.
“If the worst-case scenario, namely an overrun in project cost by 50 per cent, happened, the Airport Authority would incur a debt of HK$141 billion. However, according to the financial assessment, even if this happened, the authority would still be able to acquire additional borrowing to cope with this situation,” Cheung explained, adding that the government had already reminded the authority to exercise prudent cost control measures to manage the project.
The authority has appointed HSBC as its financial consultant to study the detailed funding plan for the project.
