Peter Woo of FrontlineTechWorkers
Hong Kong’s third runway is now reported to be a HK$140B (billion) project. How absurd is this? Let’s compare:
Beijing Capital International Airport – Market Capital HK$32.5B
Unlike Hong Kong International Airport, Beijing Capital International Airport is publicly listed, actually on Hong Kong Stock Exchange (0694.hk). With HK$140B, we can buy out Beijing’s airport 4 times.
London Heathrow Airport – Valued at HK$60B
There was a 8.65% stake sale of the Heathrow Airport Holdings for GBP392M (million)
in 2013. That would imply a full stake valuation of the airport to be around GBP4.5B (392M / .0865). Even by taking the peak of GDP/HK$ rate in 2013 at around HK$13 (currently HK$11.37), it would only be HK$60B, i.e. we can buy out the Heathrow Airport twice.
Berlin Airport New Runway – HK$32B
Just a few months ago, the scandal-dogged Berlin Airport asked for EUR 3.2B to build a new runway. That would translate to HK$32B, using EUR/HK$ exchange at that time (around HK$10, currently HK$8.23). Despite of potential construction complications due to our unique terrain and environmental consideration, HK$140B allow us building 4 new runways for Berlin. The Germans must envy us for such luxury.
Hong Kong International Airport (The Rose Garden Project) – HK$160B
The Hong Kong International Airport was a US$20B project at that time but note that it was a project comprised 10 core projects including the airport itself (with 2 runways), Tsing Ma Bridge, Western Harbour Crossing, North Lantau Expressway, Route 3 – Kwai Chung and Tsing Yi Sections, West Kowloon Highway, Land Reclamation in West Kowloon, Central Reclamation Phase I, and Phase I of North Lantau New Town. It was practically rebuilding part of HK. Can you imagine an additional runway costs almost the same? Even with inflation adjusted dollar, it doesn’t make sense.
For reference, our current airport has a fixed asset size of around HK$52B. With the miscellaneous supplemental projects built after the initial cutover of the airport, and depreciation/appreciation applied over the years, HK$52B may not exactly represent the proportion of the airport within the Rose Garden total. However, it gives you a sense of how much an airport (including 2 runways) should cost.
It’s going to be privately funded – does it concern me?
Yes, for one thing, whatever debt raised by the Airport Authority will be guaranteed by the Hong Kong government. If the project doesn’t pay back, Hong Kong taxpayers will have to subsidize it later.
Immediately, the Airport Authority is considering the suspension of the around HK$5B/year dividend payment to the Hong Kong government. Local residents ought prepare to shoulder up more taxes to fill in the HK$5B hole, and more directly, to pay more airport tax upcoming.
With the congestion of the two runways now, we have little objection to building a third runway, if the environment is taken into account. However, we should not be robbed. HK$140B is not only unreasonable, but downright robbery by vested interests. Just wonder, is this what the HK$50M paid to CY Leung is for? Or is this another “gift” to Chinese construction companies that will be ultimately given a piece of the pie, and come back later to claim their “love” for Hong Kong without mentioning how much they’ve earned during the process? HongKongers have already been overpaying for water. Now, they want more.
One of our group members foresees that we will end up being made to buy airspace from China in order to fully utilise the third runway. Water and construction are just the beginning. Prepare to be asked for showing more gratitude to the motherland.
FrontlineTechWorkers is formed by a group of IT practitioners with the aim to consolidate voices from IT workers on policy discussion in Hong Kong.