March, 2015:

Hong Kong’s crowded airspace is like a “saturated water pipe” and would prevent a multi-billion dollar third runway at the city’s international airport from meeting its expansion target, the former Observatory chief said today.

Former Observatory director Lam Chiu-ying cast doubts on the cost-effectiveness and financing plan of the proposed HK$141.5 billion third runway at Chek Lap Kok airport, saying that airspace in the Pearl River Delta was already too busy to accommodate more flights.

Upon its planned completion in 2023, the runway will reportedly allow Chek Lap Kok airport to serve 30 million more passengers a year.

But speaking during an RTHK radio show, Lam gave the example of a newly-built third runway at Guangzhou’s Baiyun International Airport. He said the facility, opened in February, had increased the airport’s traffic by just 10 flights per day because of a lack of airspace in the region.

Hong Kong airport faced the same problem, said Lam, who is now convener of concern group People’s Aviation Watch.

“The flights have to enter an airway that is now like a saturated water pipe,” he said. “Even with an extra runway, you cannot send more flights into the skies”.

His view was echoed by former civil aviation department head Lam Kwon-yu, who said officials had so far failed to give details on whether mainland China would allow Hong Kong to use some of its airspace.

The former aviation chief agreed that without more airspace, a third runway would not meet its expansion target.

He said Hong Kong could reorganise its airport resources to focus on providing more international flights when cross-border links such as the Hong Kong-Zhuhai-Macau bridge and the high speed rail link to the mainland are completed in future.

“Hong Kong should make more use of its advantage, which is our international network,” he said. He added that this could attract mainland travellers to use Hong Kong’s international flights.

Lam Chiu-ying was also opposed to the current financing plan – in which funds are to be drawn internally from the Airport Authority’s surpluses, user charges – said to be HK$180 per departing passenger – and external financing via bank loans and bonds.

The authority will also stop paying annual dividends to the government – its sole shareholder – denying the public purse of about HK$50 billion over the next 10 years, based on last year’s figures.

Lam Chiu-ying said raising funds via loans and bonds would make the airport vulnerable to the external economic environment. He said there was a risk, although it looked small, of the authority being left in the red if the global economy receded significantly.

“In that case the airport may go to the hands of foreign investors,” he said. “The airport holds a strategically significant position from the national defence point of view. It cannot afford to go into foreign hands.”

He said the authority should drop the current financing plan and instead seek public funds from the Legislative Council.

Economists however, said that the authority’s plan to finance the third runway is viable and that an expected rise in US interest rates should have little impact on the plan.

Andy Kwan Cheuk-chiu, director of the ACE Centre for Business and Economic Research, said that the expected increase in United States interest rates will not be large. It means that it will not push up the interest rate of the authority’s external financing via bank loans and bonds by much.

“If the authority wants to lower the controversy generated by the runway’s cost, it can issue more bonds,” he said.

Bank of East Asia chief economist Paul Tang Sai-on said the financing plan is feasible because it is a “multiple-channel approach”.

“A multiple-channel approach is the best option because it reduces the risk,” he said.

He said Hongkongers should not just look at how much the runway will cost, but how much returns the authority will be able to generate.

Chek Lap Kok airport served more than 63 million passengers and processed 4.4 million tonnes of cargo last year.

Source URL (modified on Mar 18th 2015, 6:11pm): http://www.scmp.com/news/hong-kong/article/1740885/hong-kong-airport-third-runway-will-fail-take-due-crowded-airspace

Hongkongers were no closer to understanding how regional airspace issues would be solved, after approval was granted yesterday for the construction of a third runway at Chek Lap Kok airport that would spell busier skies above the city.

The government would say only that the “problems will no longer exist” in five years, as it remained tight-lipped about whether Hong Kong could eventually circumvent a “sky wall” imposed by the mainland between the city and the national airspace.

The sky wall means outbound planes must fly circles to reach at least 4,800 metres, at which they can then enter mainland airspace. This obstacle will still exist with a third runway.

With the extra airstrip, the city can increase its current 68 flights per hour to 102, according to Airport Authorityforecasts, but critics say the target can be met only if the mainland concedes some of its airspace to Hong Kong.

A “directional plan” forged in 2007 was already in place, a government spokesman said ahead of the news that the Executive Council had given the go-ahead to build the third runway, now budgeted at HK$141.5 billion.

The plan set “short and medium objectives” for Hong Kong, Macau and Shenzhen to meet by 2020, he said. The three jurisdictions belong to a working group formed in 2004 to resolve issues of airspace amid growing traffic in the Pearl River Delta region.

The spokesman did not elaborate on what the talks had produced, only stressing that the three parties would work to achieve unified standards, procedures and arrangements to share airspace.

“The problems everyone is concerned about will no longer exist in 2020,” he said.

He tried to allay concerns about the sky wall, saying that global aviation regulations required all aircraft to enter another jurisdiction’s airspace at 4,800 metres anyway. He also downplayed the idea of boosting the two current runways’ capacity by shaving the peaks off several hills, saying that this was not “environmentally viable”.

Melonie Chau Yuet-ngor, of the People’s Aviation Watch concern group, said this was “deliberately misleading” as a 1992 master plan only stated two mountains, not in country parks, needed to be shaved.

Wu Chi-wai, transport policy spokesman for the Democratic Party, questioned the transparency of airspace management. He urged the government to explain why the dual-runway system failed to achieve its design capacity of 88 flights per hour.

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Source URL (modified on Mar 18th 2015, 5:22am): http://www.scmp.com/news/hong-kong/article/1740549/approval-third-runway-chek-lap-kok-airport-does-not-answer-questions

http://rthk.hk/rthk/news/englishnews/news.htm?hightlight&20150317&56&1085113

The government has given its approval for a third runway at Chek Lap Kok.

The decision was welcomed by the Airport Authority, which said expanding the airport was crucial to consolidating Hong Kong as an aviation hub.

The Secretary for Transport, Anthony Cheung, said the estimated cost would be HK$141.5 billion. The project will be financed by the Airport Authority through internal funds, external borrowing, and charging passengers.

Professor Cheung noted that the airport charges at the Hong Kong were among the lowest studied in a consultancy report, so there was room to raise them further.

About 650 hectares of land will be reclaimed from the sea for the runway and a new passenger building. Construction is expected to be completed by 2023.

Hong Kong’s airport expects to reach maximum capacity under its current layout by 2022 at the latest.

The Executive Council on Tuesday gave airport officials the green light to seek funds and build a HK$141.5 billion third airport runway, despite widespread opposition from activists and environmental groups.

Taxpayers are to be spared any expense, with funding to come internally through the Airport Authority’s own “healthy” surpluses, airport charges for visitors and carriers, and external financing through bonds.

The airport will also forfeit annual dividends to the government – the authority’s biggest shareholder.

Secretary for Transport and Housing Anthony Cheung Bing-leung said the airport was fast reaching maximum capacity and the third runway was needed to maintain the city’s long-term economic competitiveness.

Cheung said carrier charges at Chek Lap Kok were among the lowest in the world and there was room to raise them further.

Airport Authority chief Fred Lam Tin-fuk said the funding proposal was the fairest and most appropriate method based on a “user pays” principle.

He did not answer directly whether the financing plan was designed to bypass the Legislative Council finance committee. “We don’t think it is fair to make taxpayers pay for other visitors,” he said.

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Source URL (modified on Mar 17th 2015, 8:01pm): http://www.scmp.com/news/hong-kong/article/1740298/exco-gives-green-light-airport-authority-seek-funding-third-runway