The sooner Hong Kong starts building a third runway at its airport, the more likely costs can be contained
The financial arrangement for a third runway at the airport has always been a matter of concern. Instead of an across-the-board construction fee of HK$180 for every passenger, the revised levies vary according to the duration of flights and cabin class. The adjustments are necessary steps to ease opposition to the project. The changes mean 70 per cent of travellers are to pay HK$90 or less. Only business and first class passengers flying long haul will pay HK$180.
Whether the project is ready to go ahead is still unclear. Although the financing model enables the Airport Authority to get around the legislature for funding approval, there are still uncertainties. If the experiences of building the cross-border high-speed railway and the Hong Kong-Zhuhai-Macau bridge are any reference, delays and cost overruns remain crux issues. Possible legal challenges against the runway's impact on the environment mean the project may be held up.
That makes cost control all the more important. Under the revised financing model, the construction fee has to be imposed for longer, until 2031 instead of 2023 as previously planned. The proportion of commercial borrowing will also be raised from HK$53 billion to HK$69 billion. The Airport Authority has to come up with vigorous measures to keep costs within budget. The last thing the public wants is another mega public works project running behind schedule and with ballooning costs.
For those who believe the third runway is unnecessary, the revised levies are still unacceptable. Others argue that the new facilities are to be used by future passengers and the charge should therefore be imposed after the project is completed. There are also those who think that passengers should not help finance what may turn into a white elephant.
But the truth is that our two runways will reach the practical capacity of 68 flights an hour in the next two years, leaving little room for increased traffic. The airport is expected to handle more than 100 million passengers a year by 2030, according to official estimates. The case for a third runway is obvious.
Our competitiveness hinges on the ability to expand flight capacity. With a construction bill of HK$141.5 billion, the public works project is set to become the city's most expensive ever. As the price has already soared by more than HK$5 billion while we have been discussing the project, it is time we get a move on. The longer it takes to build, the more costly it will become.