The Executive Council has green-lit the Airport Authority’s proposal to finance the construction of the Hong Kong International Airport’s third runway, announced Professor Anthony Cheung Bing-leung, Secretary for Transport and Housing Bureau. The Secretary estimated that the runway will cost HK$141.5 billion to build.
The AA’s proposal to finance the project includes a two pronged approach, namely shared responsibility and a user-pays principle. The first part of the approach entails external borrowing through issuing of bonds to the public and directly from banks. The Secretary cited the AA’s “excellent” credit rating (AAA), saying it shows they have the capacity to achieve the feat. The AA will also forfeit annual dividends to the government for ten years.
As part of the user-pays principle, the Airport Authority will begin charging an Airport Construction Fee (AFC), originally touted to be HK$180. Fred Lam Tin-fuk, CEO of the AA, explained that the ExCo has suggested to lower this fee, and that the AA is now working on the plan to propose a new rate. The AA will also increase carrier charges from airlines. Fred Lam explained that the Airport is simply resuming the level of fees pre-2000, citing the fact that current fees are the second lowest out of its 55 main counterparts.
Fred Lam claimed the Airport Authority would be solely responsible for excess costs.
When asked whether the Airport Authority was deliberately avoiding tabling a finance proposal to the Legislative Council’s Finance Committee, Lam said he believed the “shared responsibility” and “user-pays principle” approach was the fairest compared to using public funds to finance the project. “It is not fair for taxpayers to pay for other visitors,” said Lam. He did not directly address whether the plan was designed to bypass LegCo, simply saying, “we are more than happy to accept LegCo’s monitoring.”
If construction successfully begins next year, the Airport Authority estimates its completion to be in 2023.