Update on the development of the three-runway system at Hong Kong International Airport
Financial arrangement
Mr CHAN Chun-ying was of the view that given the current condition of the aviation industry, the cost of bond issuance and borrowing from banks might be much higher than the estimated cost. He asked if AAHK had conducted any assessment on the cost of the various types of debt instrument under the detailed funding plan. He further enquired if the combination of the debt instrument types would be re-arranged to lower the cost of financing.
Mr David WOO of AAHK advised that comparing to the situation in the past few years, interest rates were generally lower due to the current sluggish global economic environment. The lending rate for AAHK did not see material changes due to the relatively strong credit rating of AAHK. AAHK would adhere to the recommendations made by its financial advisor, HSBC, in the detailed funding plan. He added that given the size of the financing involved, any AAHK’s plan to focus on a particular financing instrument would eventually drive up the interest costs for that particular instrument in the market. AAHK would continue to source funding through the established plan via various instruments of different tenures to suit the needs of the 3RS project.
Fill materials and reclamation progress
Mr CHAN Chun-ying noted that the 18 weeks of slippage in reclamation works had been reduced to six weeks, and enquired about the factors contributing to the catching up in the works progress. Mr Kevin POOLE of AAHK confirmed that the progress was caught up out of the combined effort of AAHK and the main reclamation contractor in securing adequate supply from a diversity of fill sources. Efforts had been made to re-phase some of the reclamation works to firstly focus on the critical areas, i.e. areas needed for operation of the third runway in 2022, which would then be followed by the less critical areas. The outbreak of COVID-19 impacted on the reclamation programme in terms of the interrupted fill supply in February and March 2020. AAHK would focus to recover the 6-week slippage in the coming year.