Airport Authority to issue bonds to fund new runway

The Airport Authority (AA) says it will issue bonds in the coming year to pay for the third runway project, saying the Covid-19 pandemic has affected its income.

In a document submitted to the Legislative Council, the authority said fast-spreading Covid variants have triggered new travel restrictions around the globe, and it’s generally expected that passenger traffic will only return to pre-pandemic levels in three to four years’ time.

Construction of the runway itself was recently completed and it is expected to open in 2022. However, construction of other facilities including a new terminal and passenger concourse are not expected to be finished until 2024.

“There remain considerable uncertainties over the exact financial contributions to the [three runway system] project from AAHK’s operating surplus and [airport construction fee] collection, which are largely traffic driven,” the paper said.

Officials said the authority is planning to take advantage of the current low-interest environment and issue bonds of up to US$4 billion – including green bonds.

Depending on the market situation, the authority may also issue bonds of around HK$20 billion next year, HK$5 billion of which will be for the general public to subscribe to.

The authority said it expects the construction costs to stay within the HK$141 billion budget.