Hong Kong | Airport gets green light for USD18b third runway

The Hong Kong government gave final approval yesterday for a third runway at the Asian financial center’s airport, aiming to meet surging growth in passengers and air cargo.
Officials said the project will begin next year and cost HKD141.5 billion (USD18.2 billion).
The Hong Kong government is pledging to fund the expansion through a mix of internal funds, external borrowings and higher user fees.
Airport Authority Hong Kong is proposing to levy a HK$180 additional fee on departing, non-transit passengers until the end of the construction, Chief Executive Officer Fred Lam said at a press briefing in Hong Kong yesterday. It will also retain operational surpluses for a decade and halt annual dividend payments to the government, he said.
“The three-runway system is more than a transport infrastructure project, it is essential to keep our economy going,” Anthony Cheung, Hong Kong’s secretary for transport and housing, said at the same briefing.
About 650 hectares of land will be reclaimed from the sea for the runway and a new passenger building. Construction is expected to be completed by 2023.
Hong Kong International Airport expects to reach maximum capacity under its current layout by 2022 at the latest.
Yesterday’s announcement did not mention any increases in airline charges to fund the project. The International Air Transport Association warned Hong Kong could lose competitiveness if the airport authority seeks to pay for the runway by raising the fees it charges airlines, IATA CEO Tony Tyler said last week.
Strong growth in China has been a key driver of Hong Kong airport traffic. Most of the visitors to the specially administered Chinese region come from mainland China, which is one of the fastest growing air travel markets. For the rest of the world, Hong Kong is also a gateway to China.
Last year, the airport handled 63.4 million passengers and 4.4 million metric tons of cargo, both records.
The airport predicts that the third runway will allow it to handle 102 million passengers and 8.9 million tons of freight a year by 2030.
Across Asia, airport operators are scrambling to build new terminals or expand existing ones to keep up with growth in air travel. AP/Bloomberg