June 9th, 2011:

There are important cost-benefit, environmental and social issues to be addressed, and I am confident a constructive community debate will identify and resolve them. All of Hong Kong will need to pull together on this one.

Cathay Pacific’s position is clear – we believe a third runway is essential to the long-term growth and development of the Hong Kong economy. We also believe the need for it is urgent, and becoming increasingly so.

Why do we believe we need a third runway at the Hong Kong International Airport? It’s important to frame the debate through the prism of Hong Kong’s place in world. That means a focus on three key contexts:

• The airport has been a fabulous success story and will reach capacity saturation 15 to 20 years before the original forecast date of 2040. We should invest on the back of that success.
• Aviation is the foundation on which the four pillars of Hong Kong’s economy – finance, trade and logistics, tourism and professional services – are built. These are international, not domestic, industries that rely heavily on our connectivity to the rest of the world.
• It has taken more than a decade to achieve the critical mass needed for Chek Lap Kok to become Asia’s premier aviation hub. We have many regional competitors ready to take that mantle if we let it slip.

That’s the big picture. And as a key driver of our economy, aviation is at the core of that big picture. The industry supports more than 260,000 jobs, or over 7 per cent of the total working population and accounts for 8.2 per cent of our gross domestic product, according to a Chinese University of Hong Kong study.

These facts speak for themselves.

The four pillars of our economy will be at risk if we don’t have the future runway capacity at Chek Lap Kok to leverage our superb location at the heart of Asia and our unrivalled access to the mainland market.

The Airport Authority’s master plan to 2030 spells out with great clarity the challenges facing the airport if long-term growth is constrained. It rightly says Hong Kong would begin to lose its status and competitiveness as an international business centre and aviation hub.

Are there alternatives to a third runway? One option is to nip and tuck around the edges with the existing two runways. Frankly, this option only buys us a couple more years of growth and then we run into constraints again. The great artery that is our aviation hub would then still clog up and no amount of bypass surgery will fix it. And that would mean a slow choking of the lifeblood of our economy, with the resulting loss of growth, opportunities and jobs.

It has been suggested that we collaborate with one or more of the other four airports in the Pearl River Delta to obviate the need for a third runway. One idea is to split “duties” between two airports – Hong Kong handling long haul, Shenzhen handling domestic flights with a rail link connecting the two airports. A great idea on paper that just won’t work.

As David Dodwell pointed out on this page last week, experience around the world shows that passengers simply do not like inter-airport transfer. And why should they when they can be served by a single, magnificent airport like the one we have in Hong Kong?

Attempts to link airports elsewhere in the world – even two airports within the same metropolitan area – have not been successful.

In London, Heathrow and Gatwick do not operate as one airport and transfer traffic between the two is almost non-existent. In the United States, New York, Chicago and San Francisco have been unable to generate transfer traffic between the major airports in each city. And closer to home in Japan, Haneda and Narita airports do not support each other. There is not a single example anywhere in the world where a two airport “link-up” has worked.

In any event, Shenzhen airport’s second runway is due to open later this year but, even with this additional runway, it will face capacity constraints around the same time that our own airport reaches a bottleneck. So it’s not a starter, either.

As a major international financial centre, trade and logistics hub and prime travel destination, Hong Kong needs to have its own airport with long-term capacity to keep us ahead of the game. And while our aviation hub might be winning the race now, our competitors will gallop past us if we don’t keep up the pace. We need to invest on the back of the spectacular success of our aviation hub by growing it, not stifling it. That way enables us to seize the opportunities so uniquely provided to us by our special relationship with China and our strategic location at the heart of Asia. If we don’t grasp this great opportunity, the only people celebrating will be our rivals in Singapore, Seoul, Taipei and Bangkok.

John Slosar is chief executive of Cathay Pacific Airways (SEHK: 0293)

The authority knows it has a tough plan to sell: a price tag of HK$136 billion, the biggest reclamation of land since the handover, an irreversible damage to an important dolphin habitat, and a yet-to-be quantified impact to climate change and air quality. Despite the adverse impact, the best chance for the government to convince the community of its plan is to adopt an honest approach in public engagement.

Economists and commentators were quick to question the authority’s estimate of economic return – HK$912 billion over 50 years. But the biggest surprise of the plan was not what it contains, but what it omits despite years of preparation.

In 2007, when Chief Executive Donald Tsang Yam-kuen was pursuing his second term, he promised a grand plan to link up the Hong Kong and Shenzhen airports with a high-speed rail line. At that time, this was touted as an ingenious way to integrate the two airports and to enhance Hong Kong’s competitive position as an air traffic hub. Nothing much has been heard since.

Government officials were silent on this project in the launch last week. Has this been considered as an alternative or supplement to the third runway? If and when the third runway is built, are we going to spend another HK$100 billion or more on this rail link? If plans for the rail link have been dumped, don’t Hongkongers have the right to know even though that means the chief executive may lose face over yet another broken promise?

The people cannot be expected to decide on the basis of incomplete options, which should include not just the rail link, but other possibilities such as a shorter third runway to cater primarily for mainland-bound flights.

Another major omission is the lack of proposed measures to mitigate the negative environmental impact. Officials vow to “balance” economic development with environmental protection. One would therefore expect estimates of economic gains on one hand, and plans for marine conservation, pollution reduction and carbon offset on the other. Instead, the public was told that none of the latter would surface until an environmental impact assessment is conducted after the project gets the nod.

Given the deficiency of the current system for environmental impact study, this is a recipe for confrontation. What we need now is a platform for negotiation among stakeholders. The pros and cons of various options should be put on the table. The costs and benefits of mitigation plans should be examined and openly debated. Only then can a sensible balance be struck. Any attempt to delay such discussion or hide away relevant plans will only increase the mistrust of those most affected by the project.

The Airport Authority may rightly feel that it cannot jump-start the statutory environmental impact assessment process now. But it should still conduct strategic impact studies to provide sufficiently concrete plans for public scrutiny. The time and effort it spends in this exercise will be earned back during the formal process of an environmental assessment, if and when that is required. Meanwhile, the authority should release the full range of consultancy reports it commissioned over the years, and invite the Legislative Council to appoint an independent checker to verify its economic claims.

Some officials privately claim their worst fear is a judicial review that will delay the project, given the recent verdict on the bridge to Macau and Zhuhai. However misguided this claim may be, officials should nevertheless learn to engage the public early, lay out honest alternatives, and explore the best available technologies to protect the environment, in accordance with international best practice. Hong Kong has the resources to do it right.

The project comes at a difficult time for Hong Kong. Despite economic growth, Hong Kong is going through a “social recession”, as defined by Tim Jackson of the British government’s Sustainable Development Commission: rising income inequality, soaring property prices, declining social mobility and an acute sentiment of injustice in both the middle class and the grass roots. Pumping HK$136 billion into a single infrastructure project in a social recession is not likely to boost Hong Kong’s happiness index.

Yet the city has excelled in providing airport and airline services. Maintaining this competitive edge is not just about economic growth, but also about a vital means to strengthen our cultural nexus to the world. The question is how.

Albert Lai Kwong-tak is chairman of the Professional Commons and vice-chairman of the Civic Party