Runway traveler fees to stretch until 2033

Passengers will have to keep paying the hefty HK$141 billion construction bill for the third runway project until at least 2033 - three years longer than expected - says the Airport Authority.

That is because the Hong Kong International Airport's operator has lost income due to a significant drop in passenger numbers amid the pandemic, making it difficult to cover construction costs.

At a Legislative Council panel on economic development meeting yesterday, authority management said that due to the traffic slump and drop in revenue, the debt of the third runway project is expected to rise to HK$110 billion from HK$89 billion. But it insisted the increase is still "within the range of estimation."

Each departing or transit passenger currently has to pay HK$70 to HK$180 as an airport construction fee - depending on whether they are transit or origin-destination passengers taking economy, business or first class. The fees are one of three sources of funding for the project under a "joint contribution and user-pay" principle.

The authority's executive director for finance, Julian Lee Pui-hang, said the charges will probably be collected until 2033 or even 2034, when all the debts related to the project are supposed to be cleared, as Covid and border policies have greatly hindered the collection of such fees in the past two years.

But the cost of the project should still fall within the budget, Lee said.

The authority can also dip into its operating surplus and borrow funds through bank loans and bonds.

However, if the epidemic lingers the authority will consider issuance of HK$5 billion retail vouchers for extra funding.

The third runway will commence operation this year as scheduled. But after that the center runway will be closed for two years for reconfiguration so the entire three-runway system can only be completed by 2024.

Airport operations executive director Vivian Cheung Kar-fay said plans are in place to appeal to passengers when Hong Kong reopens its borders.

She said four key elements to sustain Hong Kong's hub status include government policy, the local economy, local-based airlines' status and airport readiness.

"Once passengers come back, we have lots of activities to ensure we can capture the market."

Undersecretary for transport and housing Raymond So Wai-man said authorities are actively exploring effective customs clearance and the feasibility of adopting the co-location arrangement at the airport.

In a document submitted to the panel last week, the authority said flight checks on the third runway were completed last month and drills for plane crashes and rescue exercises are scheduled to be conducted by the end of this month.

It said the remaining construction work, system installation, testing and commissioning for the runway are nearing their final stages.

According to the authority, the scale of the three-runway system project is almost equivalent to building a new airport adjacent to the existing one.

The mega project reclaims approximately 650 hectares of land north of the existing airport island and expands Terminal 2 to provide full-fledged passenger services including arrivals and departures facilities.

It covers a wide range of new structures, including the T2 concourse with an associated apron, a new 2,600-meter automated people mover and a baggage handling system linking Terminal 2 and T2 Concourse.

stacy.shi@singtaonewscorp.com