The debt burden for the construction of Hong Kong’s airport expansion has reached a staggering HK$123 billion (US$15.7 billion), with no end in sight to the levy on passengers flying out of the city.
The Airport Authority recently announced that the total debt for the airport expansion project, set to be completed this year, has skyrocketed due to the impact of the Covid-19 pandemic.
“Significant increases were seen as a result of the Covid pandemic. Since the three-runway system will be introduced in phases, it is uncertain when we can cease charging the related levies,” said Julian Lee Pui-hang, the authority’s director of finance, during a Legislative Council panel discussion.
During the panel discussion, Perry Yiu Pak-leung, a tourism sector lawmaker, inquired about when the authority plans to discontinue the special charges introduced in 2016 to support the airport expansion.
The current “Airport Construction Fee” charges every passenger, including transit passengers through Chek Lap Kok, between HK$70 and HK$180 per trip, based on distance and seat class.
Lee previously informed lawmakers that travellers are likely to continue paying the tax until at least 2033, although no specific end date was mentioned during the recent meeting.
The airport’s HK$141.5 billion expansion project includes a new 3.8km third runway, a second terminal building, and another concourse.
Hong Kong Airport Expansion Project Overview
The levies were introduced as part of a pre-construction financial arrangement in 2016 to avoid using taxpayer funds, bypassing Legislative Council approval.
Funding for construction primarily comes from levies on passengers and airlines, as well as the authority’s savings, bank loans, and bond issuances.
To raise additional funds, the authority offered HK$5 billion in retail bonds to the public earlier this year for the first time in two decades.
Challenges Ahead for Hong Kong Airport
Despite the new terminal’s expected completion by year-end, it remains uncertain when it will become operational, according to airport officials.
Steven Yiu Siu-chung, the authority’s executive director of airport operations, highlighted that passenger numbers have only recovered to 80% of pre-pandemic levels during the recent holiday season.
“We anticipate a return to pre-pandemic passenger levels by year-end, and our current Terminal 1 still has capacity to accommodate the traffic,” he added.
The authority continues to monitor passenger rates, with no definitive timeline for a full recovery yet in place.
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