THE EXPECTED completion date of Hong Kong's new Chek Lap Kok Airport has been pushed back to April 1998, following the signing of a long-awaited agreement with China on the overall financing of the project.

The Hong Kong Government has admitted for the first time that the airport's completion will not, as originally planned, coincide with the hand-over of the UK colony to Chinese rule on 1 July, 1997. The Government has revised its timetable because of the prolonged delay in reaching a financing agreement with China.

The deal ends nearly three years of tough and, at times, acrimonious negotiations between the UK and China over the ratio of Government spending to borrowing needed to fund the airport and related infra-structural developments.

Under the new terms, the Hong Kong Government will inject a minimum of HK$60.3 billion ($7.8 billion) into the airport and planned 34km (21 miles)-long airport railway.

The level of borrowing from the international money markets for the two projects will be capped at HK$23 billion. It is estimated that the entire project, including transport infrastructure and land reclamation, will cost HK$158.2 billion by 1998.

The Hong Kong Government, under its original 1992 financing plan, had sought to limit public spending on the airport to HK$16.6 billion, with the balance to be raised through land sales, and a much higher level of borrowing. China, however, fearing being burdened with excessive debts after 1997, demanded a larger injection of Government equity.

In spite of the long-running impasse between China and the UK, the Hong Kong Government has managed to sustain work on the airport through incremental injections of funds.

The agreement has cleared the way for the award of two 20-year cargo-handling franchises at Hong Kong's replacement airport. Hong Kong Air Cargo Terminals (HACTL) will move from Kai Tak - which will be closed - to a new operation at Chek Lap Kok, capable of handling up to 2.6 million tonnes a year.

A new Singapore-led consortium, Asia Airfreight Terminal, has also be given a licence to operate a 0.42 million tonnes-per- annum unit, ending HACTL's existing cargo-handling monopoly. The deal allows for the addition of a third operator in the first five years and a fourth in the following five years, if 75% or more of capacity is used.

Source: Flight International