March, 2015:

Details of deal with mainland authorities to allow for proposed third runway at ChekLap Lok contains ‘sensitive’ information

The government has refused to disclose details of an agreement with mainland authorities on airspace in the Pearl River Delta, as the controversy into granting a third runway at Chek Lap Kok continues to escalate.

Transport Secretary Anthony Cheung Bing-leung said the information was being kept confidential because of its “sensitive” details.

“The plan itself set forth various objectives, targets and measures to be implemented until the year 2020,” Cheung said. “The document contains a lot of commercial and strategic sensitivities, so we don’t think it is right for us to just publish the plan.”

Critics of the planned construction of a third runway at Chek Lap Kok have said airspace in the region is already too congested to accommodate additional flights.

They have urged the government to reveal more about the so-called ‘2007 plan’, which was agreed by aviation officials in Hong Kong, the mainland and Macau after more than a decade of talks aimed at resolving airspace problems.

Former Observatory chief Lam Chiu-ying said no one was asking to see the whole agreement.

“What we want to see is the agreed plan showing the airspace allocation to the various parties and the new pattern of flight routes,” said Lam.

He said the specifics should be public information as major airspace changes had to be submitted to the UN’s aviation regulator, as well as pilots and air traffic controllers.

Albert Lam Kwong-yu, the predecessor to incumbent Norman Lo Shung-man as the Civil Aviation Department chief, hinted that he supported Cheung’s decision.

“I am not the best judge to say whether this information is appropriate to disclose or not. Only the one who says so is the best judge,” Lam said.

Another ex-head of the aviation regulator, Peter Lok Kung-nam maintained his opposition to the third runway.

This comes after Cheung said Lok had performed a U-turn and backed the airport expansion. “Of course I support a third runway … I don’t think it should be at Chek Lap Kok,” Lok said, saying that Cheung had put “words in my mouth”.

The airport expansion has been dogged by a series of issues, from soaring construction costs – previously set at HK$80 billion and now rising to HK$141.5 billion in four years.

The plan has also been overshadowed by questions over how the city can fully utilise a new runway with a lack of agreement with Beijing over the use of mainland airspace.

Meanwhile, at a seminar organised by pressure group Airport People’s Watch, Guangzhou Civil Aviation College associate professor Qi Qi called for further integration and coordination of aviation around the Pearl River Delta. “If we need to expand [the airspace], a revolutionary innovation is needed for the air traffic management technology,” said Qi.

But the burgeoning expansion of Guangzhou, which will eventually have five runways – is faltering and Qi revealed Guangzhou’s newly operational third runway is used for 10 flights a day, due to severe congestion.

Hong Kong’s Air Line Pilots Association, backed by 2,500 members across the city’s four major airlines, says its support for the third runway is contingent on airspace issues being resolved.

Source URL: http://www.scmp.com/news/hong-kong/article/1744090/airspace-deal-mainland-over-third-runway-chek-lap-lok-will-not-be

http://hongwrong.com/third-runway/

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.

Parking space and floor area are almost halved in latest design, but bosses insists expansion can still serve 30 million more travellers a year

More questions are being raised over the Airport Authority’s HK$141.5 billion third runway – this time over the design, in which the number of aircraft parking slots and the floor area of a new concourse are slashed by almost half.

The revisions raise doubts about whether the expanded Chek Lap Kok airport can still serve 30 million more passengers a year, a projection made based on the old design.

According to the authority’s announcement on Tuesday, the concourse will now be “Y-shaped”, covering about 283,000 square metres and providing 57 plane parking spaces.

That contrasted with the original design, with two connected “Y”s yielding a floor area of 470,000 square metres and 106 parking spaces.

The authority did not point out during the announcement that the design had changed, although it did present pictures of the latest plans.

“We can still meet the target under this design,” a spokesman for the authority said yesterday.

The space where the other half of the concourse was to have been built would be “reserved for future purposes”, he added.

The Executive Council has approved the third runway and construction may start as early as next year despite unresolved issues about sharing airspace with the mainland and a looming judicial review over the project’s environmental impact.

Apart from these questions, the authority is set to skirt Legislative Council scrutiny by “self-financing” the work, so lawmakers do not have to approve its multibillion-dollar budget.

Gary Fan Kwok-wai, who sits on Legco’s transport panel, cast doubts on the projected airport capacity, now that the design was different. “The Airport Authority could be trying to make the costs appear lower first, to reduce the level of controversy,” he said. “The authority needs to offer a clear explanation.”

Green Sense president Roy Tam Hoi-pong said that if the airport’s extra handling capacity turned out to be lower than 30 million travellers, the authority might need – given its plan to offset the costs partly by charging carriers and passengers – more than HK$141.5 billion to complete the works.

Each outbound traveller is to fork out an “airport construction fee” of about HK$180, while landing fees for airlines will return to their pre-2000 levels, reversing a 15 per cent cut in place since 2000. Financing will also come from the authority’s surpluses and external financing via bank loans and bonds.

Separately, a concern group found in a study that many travellers at Chek Lap Kok were only in transit, so they would not go into the city and help the economy.

Michael Mo, president of the Airport Development Concern Network, cited the International Air Transport Association as saying in a 2011 report that 45.85 per cent of passengers at Chek Lap Kok were in transit.

That figure was expected to rise slightly to 46.05 per cent by 2023 and 46.76 per cent in 2030 under a three-runway system.

Mo said transit passengers would not boost the economy.

Tam shared his concerns, saying: “Society needs to think about whether it is worth spending more than HK$140 billion for so many transit passengers.”

The authority said transit travellers made up about a third of total travellers at present, and that there should not be big changes in this ratio in the future.

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Source URL (modified on Mar 20th 2015, 12:31am): http://www.scmp.com/news/hong-kong/article/1742168/third-hong-kong-airport-runway-come-smaller-facilities

Authorities have cleared the air about whether Hong Kong International Airport will have a third runway, the Executive Council having given it the green light and details of how it will be financed released. The HK$141.5 billion project is a necessity for development, ensuring that predicted increased numbers of travellers and volume of cargo will be able to effortlessly move in and out of our city. While a court challenge by environmentalists could cause a delay and funding from loans and bonds has to be secured, work can now begin in earnest on turning plans into reality. One major matter remains unresolved, though: the use of mainland airspace.

More than a decade of talks by a working group of aviation officials from Hong Kong, Guangdong, Shenzhen and Macau have failed to resolve airspace problems. Congestion is a long-standing issue in southern China’s skies, in part due to demand, but also because of People’s Liberation Army control and restrictions. Even if there are no military exercises along a flight path, planes from Hong Kong entering mainland airspace have to first circle to 4,300 metres. The consequences, beyond increased flight times, delays and bigger fuel costs for airlines, is an inability to maximise runway usage.

That raises doubts about whether the new runway can be fully utilised; Guangzhou’s recently opened third one has added just 10 flights a day. The planned airstrip will lift the limit at Chek Lap Kok from 68 flights an hour to an anticipated 102, but that will depend on resolution of outstanding problems. Authorities are confident issues will be resolved within five years, although they have not given reasons for their optimism.

If construction work on the runway and associated facilities begins next year, the runway will be ready for use in 2023. Hong Kong cannot afford significant delays; the airport’s two runways are already handling 66 flights an hour during peak periods, leaving little space for extra capacity. Airport Authority projections foresee that by 2030, our city will be receiving almost 30 per cent more passengers a year to 90 million and at least a doubling of cargo to nine million tonnes. Opportunities and revenue will be lost if time is needlessly wasted.

Working closely with aviation authorities in the Pearl River Delta region has to be a priority. Talks on joint airspace planning, use of common standards and design of flight procedures have to stay on track. Without agreements, Hong Kong’s third runway risks becoming a white elephant project.

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Source URL (modified on Mar 20th 2015, 1:05am): http://www.scmp.com/comment/insight-opinion/article/1742278/resolving-airspace-issues-key-success-hong-kongs-third

http://www.thestandard.com.hk/news_detail.asp?we_cat=4&art_id=155401&sid=44109897&con_type=1&d_str=20150320&fc=8

Is it worth building a HK$141.5 billion runway when about 47 percent of passengers will not “stay and shop” in the SAR?

That is the worry expressed by the Airport Development Concern Network and environmental group Green Sense in questioning the costs and benefits of the Airport Authority’s third runway project, which was given the go- ahead this week.

Network spokesman Michael Mo Kwan-tai said 46.7 percent of some 73 million non-Hong Kong passengers or some 34.1 million will only be transiting in 2030.

He based this on the Hong Kong Airport Authority’s 2030 primary traffic forecast report published by the International Air Transport Association in 2011.

This year, the report estimates, non-Hong Kong transiting passengers will be about 19.5 million, or 45.8 percent of 42.5 million travelers.

Green Sense chief executive Roy Tam Hoi-pong said transiting passengers will not stay and shop.

“The authority is always saying that [the airport] will be saturated, but the reason is not because of locals, but because demand by mainlanders traveling overseas has risen,” Tam said.

“The authority increased the flights for them, but it was a `saturation’ trap.”

He called on Secretary for Transport and Housing Anthony Cheung Bing-leung to disclose details of a 2007 deal Hong Kong signed with Beijing and Macau for coordinating the air space.

Mo also said transit passengers will only be paying the HK$180 airport construction fee and not the HK$120 departure tax.

Hongkongers have to pay both the fees from next year every time they use the airport.

Neo Democrat lawmaker Gary Fan Kwok-wai of the said he will propose a special subcommittee be set up in the House Committee today so that authority officials can explain the project.

An airport spokeswoman said the three-runway system could bring an extra HK$450 billion in economic gains stemming from cost-effectiveness. KENNETH LAU

Anthony Cheung outlines the detailed consideration of the financial, environmental and logistical aspects behind the Airport Authority’s plan for a third runway, which is essential for Hong Kong’s competitiveness

Over the past decade, passenger numbers and cargo tonnage at Hong Kong International Airport have risen by 8 per cent and 5 per cent respectively on average per year. The number of flight movements has gone up 65 per cent, to 391,000 last year.

Each day, about 1,100 planes fly to and from some 180 destinations worldwide, including mainland cities, making Hong Kong a global aviation hub and contributing immensely to our trade, logistics and tourism industries.

However, the current two-runway system can only allow for a practical maximum capacity of 68 flights per hour. If the present air traffic growth trend continues, the airport will reach saturation in the coming two years.

If it is not to give up its hard-earned hub status, amid fierce competition from other international airports in the region, notably Singapore, Seoul and Shanghai, as well as Guangzhou and Shenzhen in the Pearl River Delta area, which are all expanding, there is no alternative but to build a third runway without delay.

The question is therefore not “whether” or “when”, but “how” to take the project forward.

Under the Airport Authority’s plan, a three-runway system can handle around 100 million passengers and cargo throughput of some 9 million tonnes by 2030.

The authority has already completed a rigorous statutory environmental impact assessment covering 12 aspects, including aircraft noise, air quality, marine ecology and impact on human health. A total of 250 mitigation and enhancement measures, including setting up the city’s largest-ever, 2,400-hectare marine park, were committed in the report to address public opinion and the views of the Advisory Council on the Environment.

The director of environmental protection granted the environmental permit for the project last November, with conditions. The Airport Authority has taken these conditions fully on board and aims to achieve “development alongside environmental conservation” under its vision to be one of the world’s greenest airports.

The authority has put up a self-financing plan based on the “joint contribution” principle for this mega infrastructure, estimated to cost HK$141.5 billion in money-of-the-day prices. It comprises raising market borrowings, given the authority’s triple-A credit rating; restoring present airport charges for airlines to pre-2000 levels, with subsequent adjustments in line with inflation; and introducing an airport construction fee per departing passenger, excepting those in transit. The authority also plans to retain all profits earned without dividend payment for 10 years.

The government supports this joint-contribution approach. Through borrowings, the market will exercise financial prudence in scrutinising the business viability of the project. Charging an airport construction fee to help finance expansion is not uncommon overseas.

However, the government is of the view that the Airport Authority should maximise borrowings and lower the construction fee so as to reduce the burden on passengers. It should also design airline charges so as to facilitate and encourage the most efficient use of the airport, and encourage the use of more wide-body planes.

Airspace and its management naturally determine how much air traffic an airport can accommodate within international safety limits. The airspace over Hong Kong and the surrounding delta area has seen tremendous growth since the 2000s.

In 2004, recognising the need to optimise the use and management of delta airspace, a tripartite working group was formed among the Civil Aviation Administration of China, Hong Kong’s Civil Aviation Department and the Civil Aviation Authority of Macau to enhance cooperation, coordination and standardisation of procedures and measurements.

The result was the delta airspace management plan in 2007 aimed at implementing various improvement measures in phases before 2020. The airport authority’s target runway capacity of 102 flights per hour (or 620,000 flights per year) under the three-runway system was premised on such a plan, which also envisaged five runways for Guangzhou and three for Shenzhen.

The Civil Aviation Department has been engaging mainland authorities to take forward the 2007 plan, and some measures have been rolled out in recent years.

The central authorities, including the Civil Aviation Administration, are supportive of the three-runway system so as to maintain Hong Kong’s global aviation hub position. We will continue to work closely with the administration on technical solutions to optimise the use of delta airspace and meet the operational needs of all sides.

The Airport Authority will take into consideration the government’s feedback and review its proposals, making adjustments to ensure the financing arrangements are fair and reasonable, and that the capital investment is well justified. It will also develop appropriate planning contingencies and cost-control measures.

Some critics of the third runway have suggested that the airport could expand the existing 68 flights per hour limit to 86 flights even with two runways, citing a 1992 report prepared for the then Provisional Airport Authority. Such a suggestion is based on a wrong understanding.

That report actually pointed to a maximum capacity of between 52 and 86 flights per hour for dual runways, depending on various conditions and constraints. Due to the surrounding terrain, notably Lantau’s high mountains, it would be impractical and unsafe under international standards to achieve the higher targets.

The Civil Aviation Department’s commissioned consultancy in 1994 confirmed a two-runway maximum capacity of 63 movements per hour. Subsequently, the UK-based NATS reviewed this capacity in 2008 and concluded that, using the latest air traffic control technology, it could be raised to 68 flights per hour, subject to various enhancement measures.

We know for sure that maintaining the status quo would mean no growth for Hong Kong aviation, losing our business and hub advantage to neighbouring international airports, and reducing our economic competitiveness. Just enhancing terminal and cargo facilities with only two runways will not remove the ultimate runway capacity bottleneck.

Professor Anthony Cheung Bing-leung is secretary for transport and housing
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Source URL (modified on Mar 19th 2015, 5:51pm): http://www.scmp.com/comment/insight-opinion/article/1742054/risks-carefully-weighed-airport-expansion-plan-thats-vital

http://www.thestandard.com.hk/news_detail.asp?we_cat=11&art_id=155344&sid=44102107&con_type=1&d_str=20150319&fc=4

Former director of civil aviation Albert Lam Kwong-yu has challenged the government to show him the whole air traffic management agreement with the mainland and Macau governments, adding he does not trust the current director.

Secretary for Transport and Housing Anthony Cheung Bing-leung said on Tuesday the airspace problem that could have an impact on the new third runway to be built at a cost of HK$141.5 billion by 2023 if it can start construction next year could be solved by coordination among the three governments.

Cheung was asked on a radio program about comments made by Lam and a former civil aviation director, Peter Lok Kung-nam, that without additional airspace a third runway would not meet its expansion target.

Cheung said the two former directors had left their posts many years ago and did not understand the current situation.

He was confident the local and mainland authorities could resolve the issue involving the airspace in the Pearl River Delta so that the Chek Lap Kok airport can achieve its target of 102 flights per hour, compared with the current 68, when the runway is built.

But Lam said he could not trust civil aviation director Norman Lo Shung-man.

“Show me what you have done in the agreement,” Lam told iCable last night.

Shenzhen will have three runways while Guangzhou will have five, said Cheung.

Lok told TVB last night there would be less room for Shenzhen to share its airspace in the future.

“It [Shenzhen] has three runways, and Hong Kong will also have three runways; both are rivals and you cannot assume that Hong Kong can get the airspace and commence the work now. The risk is too high.”

Lok suggested that real-time testing be done using a computer for a year to collect more data before starting the project.

Former Hong Kong Observatory director Lam Chiu-ying also cast doubt on the cost-effectiveness and financing plan for the third runway as the airspace in the Pearl River Delta is already too busy to accommodate more flights.

The Civil Aviation Department will soon conduct research on optimizing efficiency, a source close to the government said. A scientific study will also begin in which different scenarios will be evaluated.