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The most expensive runway in the world?

2015/3/23 — 11:13

機管局片段截圖

機管局片段截圖

Our 3rd runway is now reported to be a HKD 140B (billion) project.  So, how absurd is this? 

Let’s compare:

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Beijing Capital International Airport - Market Capital HKD 32.5B

Unlike HK International Airport, Beijing Capital International Airport is publicly listed, actually on HK Stock Exchange (0694.hk). With HKD 140B, we can buy out the Beijing airport 4 times.

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London Heathrow Airport - Valued at HKD 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/HKD rate in 2013 at around 13 (currently 11.37), it would only be HKD 60B, i.e. we can buy out the Heathrow Airport 2 times.

Berlin Airport New Runway - HKD 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 HKD 32B, using EUR/HKD exchange at that time (around 10, currently 8.23). Despite of potential construction complications due to our unique terrain and environmental consideration, HKD 140B allow us building 4 new runways for Berlin. The Germans must envy us for such luxury.

HK International Airport (The Rose Garden Project) - HKD 160B

The HK International Airport was a USD 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. Now, 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 HKD 52B.  With the miscellaneous supplemental projects built after the initial cutover of the airport, and depreciation/appreciation applied over the years, 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 (AA) will be guaranteed by the HK government.  If the project doesn’t pay back, HK taxpayers will have to subsidize it later.

Immediately, AA is considering the suspension of the around 5B/year dividend payment to the HK government.  For local residents, prepare to shoulder up more taxes to fill up the 5B hole, and more directly, to pay more airport tax upcoming.

With the congestion of the 2 runways now, I have no strong objection to building a 3rd runway, considering that we will do the environmental part right.  However, I hate to be robbed.  140B is not only unreasonable, but a downright robbery by the vested interest.  Just wonder, is this what the 50M paid to CY Leung for, or is this another “help” to those Chinese construction companies that will be ultimately given a piece of the pie, and come back later to claim their “love” to HK without mentioning how much they’ve earned during the process?  HKers have been overpaying for water.  Now, they want more.

By the way, one of our group members** “foresees” that we will end up requiring to buy airspace from China in order to fully utilize the 3rd runway.  Ah, water and construction are just the beginning.  Prepare to be asked for showing more gratitude to this Motherland.

 

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**FrontlineTechWorkers is formed by a group of IT practitioners with the aim to consolidate voices from IT workers on policy discussion in Hong Kong.
https://www.facebook.com/FrontlineTechWorkersConcernGroup

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