Date
15 December 2017
Following criticism over the previous plan, Airport Authority chief Fred Lam has unveiled a new proposal for a special passenger levy to finance the construction of a third runway at the airport. Photo: HKEJ
Following criticism over the previous plan, Airport Authority chief Fred Lam has unveiled a new proposal for a special passenger levy to finance the construction of a third runway at the airport. Photo: HKEJ

Airport Authority revises passenger fee plan to fund new runway

The Airport Authority (AA) unveiled on Tuesday a revised proposal for special fees on air passengers to finance the construction of a new runway at the Hong Kong International Airport.

Under the plan, departing passengers will need to pay between HK$70 and HK$180 depending on the flight class and the route, instead of a standard HK$180 fee.

The revision comes after the previous proposal met with criticism, with observers deeming the fee as too high and imposing a burden on the ordinary traveler. 

However, in a new twist to the whole issue, the AA now intends to extend the period of the special levy by seven years compared to the original plan, the Hong Kong Economic Journal reported. 

The charges will last through 2031 rather than 2024, with officials saying the extension is needed in view of the reduced levy. 

Passengers who only transit through Hong Kong airport will have to pay just HK$70, while short-haul economic class passengers will be charged HK$90.

The levy on passengers in long-haul first class and business class will be HK$180, with that on long-haul economy class as well as short-haul first class and business class will be HK$160.

The new fees will be put in place in the second quarter of 2016, AA chief executive Fred Lam Tin-fuk was quoted as saying.

The new runway is estimated to cost a total of HK$141.5 billion, with 8 percent of the cost to be funded by the proposed special passenger levy, according to the new plan.

In the original proposal, 29 percent of the expenditure was sought to be covered by the passenger levy.

The reduction in funding support from the passenger levy will be covered by loan financing, with the expected borrowing now seen at HK$69 billion against HK$53 billion previously.

The AA is looking into the feasibility of the issuance of retail bonds and Islamic bonds.

[Chinese version中文版]

– Contact us at [email protected] 

VW/JP/RC

Hong Kong Economic Journal

EJI Weekly Newsletter

Please click here to unsubscribe