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HONG KONG'S replacement airport for overburdened Kai Tak will not go into operation until April 1998, months behind the original schedule, the Government confirmed for the first time yesterday.

  The announcement on the date of the commissioning of Chek Lap Kok airport came shortly after Britain and China ended a four-year-long row by signing remaining deals relating to financial support agreements for the airport and rail link projects.

  'Of course, earlier would have been better. It would have been nice. But we have to be realistic,' Financial Secretary Sir Hamish Macleod said.

  The timetable now calls for the airport to be 'substantially completed' by mid-1997, and ready to be open in April 1998. The Airport Railway is due to go into operation in June 1998.

  Saying the Mass Transit Railway Corporation (MTRC) had a good record of construction ahead of schedule, Sir Hamish said he was confident there would not be any gap between the two. He declined to comment on whether China should be blamed for the delay.

  One of Asia's biggest capital-raising operations is poised to hit global markets as the MTRC and the Provisional Airport Authority (PAA) seek $20 billion to build the railway and Chek Lap Kok.

  Sir Hamish said the project would provide 5,000 new jobs, about 20 per cent more than Kai Tak. The railway would provide another 1,000 jobs.

  MTRC finance director Roger Moss said the corporation would like to raise about $8 billion before 1996. Market sources expect the airport to seek to borrow $11.6 billion, the largest regional syndicated corporate loan.

  The financial support agreements open up a lucrative market for bank lending. The additional equity injections deal reduces the credit risk of the MTRC and PAA, easing their ability to borrow.

  Most foreign banks have already obtained head office approval to lend. Local banks have geared up to secure long-term deposits to match long-term infrastructure lending. One banker said many banks wanted to diversify lending from property-related projects to infrastructure.

  The MTRC and PAA have a long list of fund-raising options, and it is believed the MTRC will be first to hit that market as it has a long track record of borrowing.

  It is understood the Government had held out hopes the new airport could be commissioned before July 1, 1997.

  The Secretary for Economic Services, Gordon Siu Kwing-chu, said they did not have a figure for how much the delay cost. But the overall figure for the project was within last year's estimate of $158.2 billion.

  Under the two support agreements, the Government will inject additional equity into the corporations if required due to force majeure or circumstances outside the control of the Government or the two bodies, or for other justifiable reasons.

  Sir Hamish did not expect additional equity would now be needed, but said the assurance was needed for the two bodies to borrow at competitive terms. China would be briefed on any additional borrowings, but would not have a veto.

  Also signed yesterday was an air cargo service franchise for Hong Kong Air Cargo Terminal Ltd and Asia Airfreight Terminal Co Ltd.

 AIRPORT FACTS  ONE runway to open in April 1998 for round-the-clock operations. Second runway comes on stream two years later. Both 3,800 metres long.

FACILITIES to handle 47 flights an hour, 35 million passengers and three million tonnes of cargo a year.

TERMINAL has 38 aircraft gates to accommodate wide-bodied aircraft, and a parking apron containing up to 24 remote stands.



Airport opening delayed to 1998