HONG KONG Air Cargo Terminals Ltd (HACTL) will spend $7.8 billion to build the world's largest and most advanced air cargo complex at Chek Lap Kok. Managing director Anthony Charter said a third of the funds would be raised from shareholders and the remainder would be provided by banks. Twelve banks, including Bank of China, Hongkong Bank and Hang Seng Bank, have arranged a $6.2 billion loan for the project. On completion in August 1998, SuperTerminal 1 would have a designed capacity of 2.6 million tonnes a year. 'It will enable us to meet the needs of businesses in Hong Kong and southern China well into the next decade,' Mr Charter said. The complex would include a six-storey main building with a floor area of 2.95 million square feet, plus a two-storey express centre providing a further 495,000 sq ft. The express centre is designed to handle up to 200,000 tonnes of cargo a year. The main building contract, worth $3.3 billion, was awarded to a joint venture of Gammon Construction and Paul Y Construction. Work started last month. The cargo handling system contracts were given to Mannesmann Demag Fordertechnik of Germany and Murata Machinery (HK), and foundation work to Franki Contractors. They are worth $2 billion. 'This complex reflects HACTL'S commitment to Hong Kong and its great confidence in the continuing rapid growth of the Hong Kong and Pearl River Delta economies,' Mr Charter said. 'The design combines HACTL's 25-year experience of planning and operating one of the world's most efficient air cargo facilities with the expertise of leading building consultants Ove Arup and Foster Asia.' HACTL, the sole provider of cargo handling services at Kai Tak, is one of the two companies awarded franchises by the Airport Authority to provide services at Chek Lap Kok. The other, Asia Airfreight Terminals, will build a smaller complex to handle about 400,000 tonnes a year. HACTL, which expects to handle about 1.4 million tonnes this year, was not worried about competition from new airports in southern China and Macau. Under its contractual agreement with the Airport Authority, HACTL must complete 75 per cent of the terminal by August 18, 1998, 36 months from the date of the award of key contracts. Mr Charter said he believed the work period could be shortened by six to eight weeks to the end of June 1998. 'Once work is well under way, we will be in a better position to know if we can complete 75 per cent of the terminal even ahead of this schedule,' he said. HACTL has not paid any land premium, but will pay a land rent or 10 per cent of earnings, whichever is higher. HACTL expected to handle 80 per cent of the throughput at Chek Lap Kok and to reach 62 per cent of capacity within the first full year of operations. 'If growth continued at our expected rate of 8.5 per cent a year at Chek Lap Kok, we will have to expand capacity by 2005,' Mr Charter said. The company would not be able to salvage much from its present two terminals at Kai Tak, where it had invested about $2 billion. 'We will have to write off existing facilities before handing the land over to the Government,' Mr Charter said.