Hong Kong’s $11 Billion Third Runway Wins Government Backing

Hong Kong’s government backed plans to build an HK$86.2 billion ($11 billion) third runway at the city’s airport as China’s economic growth spurs demand for passenger and cargo flights.

Airport Authority Hong Kong needs to study the environmental impact and draw up financing plans before the government will give final approval, Eva Cheng, the secretary for transport and housing, told reporters in the city today. Completing the assessment may take two years and the ultimate decision will probably happen in 2015, she said.

Adding the third runway, which will largely be built on reclaimed land, will let the airport handle passenger numbers set to reach 97 million by 2030, according to the city-owned Airport Authority. The airport operator and Cathay Pacific Airways Ltd. (293), the city’s biggest carrier, both favored a third runway over a more-limited and cheaper alternative.

Hong Kong Airport, Asia’s third-busiest in terms of passengers, aims to boost capacity after traveler numbers surged 63 percent in a decade to 53.9 million last year. The facility has also become the world’s busiest for air cargo because of the growth of manufacturing in the Pearl River Delta.

Environmental groups have opposed the third runway because of concerns about the effect of land-reclamation work on marine wildlife, including endangered Pink Dolphins. About 650 hectares of land will be added to the northern edge of the existing airport island under the construction plans.

The alternative plan for expanding the airport, costing HK$23.4 billion, would have limited capacity to 74 million passengers.

The HK$86.2 billion cost for the third-runway is in 2010 dollars and the final number may be HK$136.2 billion at “money- of-the-day prices” by the time it’s built, according to the airport operator’s website.

To contact the reporter on this story: Jasmine Wang in Hong Kong at jwang513@bloomberg.net

To contact the editor responsible for this story: Neil Denslow at ndenslow@bloomberg.net.

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