THE AIRPORT CORE PROGRAMME
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Following the agreement between the British and Chinese sides of the Airport Committee in May, work on tendering processes for the northern runway and associated facilities has started. The AA aims to have these operational in late 1998. The northern runway will increase the overall runway capacity to 50 aircraft movements per hour initially, compared with 37/38 movements with single-runway operation.
Finance
In January, the AA signed a credit agreement for an HK$8.2 billion syndicated loan facility with 48 local and international banks to meet part of the cost of the first phase of the new airport. Separate borrowings will be arranged to meet the costs to be incurred by the AA in respect of the northern runway project.
Commercial Franchises and Real Estate Development
All franchise agreements for air cargo, aviation fuel supply services and aircraft catering were executed in the first half of 1996. In May, agreement was reached with the Chinese side on the award of franchises for two more airport support services, comprising three franchises for aircraft maintenance and another three for aircraft ramp handling. All these franchises were awarded later in the year.
Three significant agreements on real estate development sub-leases were concluded during the year for an air freight forwarding centre, an airline headquarters building and a hotel with up to 1 200 rooms and the provision of a 1 750-space multi-storey car park.
Retailing-Hong Kong Sky Mall
The AA in July unveiled its 'Hong Kong Sky Mall' retail concept that will provide the new airport with one of Hong Kong's largest shopping malls. There will be about 120 outlets covering a total gross floor area of 30 000 square metres within five major retail zones in the terminal.
Planning for Airport Opening
The AA in 1996 continued to develop plans and policies required to ensure both a smooth transition of operations from Kai Tak to the new airport and a successful opening. Apart from maintaining progress on construction works, an important task is the drawing up of an Airport Operational Readiness (AOR) programme by the AA together with more than 60 business partners of the AA and some 30 government departments.
In February, the Finance Committee of the Legislative Council approved funds in the amount of $19.2 million for payment of ex-gratia allowances to some 150 Airport Management Division staff of Civil Aviation Department (CAD) upon Kai Tak's closure in 1998. This paved the way for the AA to make offers of employment to these CAD staff.
Government Facilities
Work on the government facilities at the new airport including the air traffic control complex and tower, the Government Flying Service Building, an Airmail Centre, a police station and a fire station, was progressing well. Additional government facilities were being designed to support the operation of the northern runway.