TNAG-0324-FCO40-360-Development-of-Kai-Tak-Airport-at-Hong-Kong-1972 — Page 40

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CONFIDENTIAL

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XCC(70)41

(Those airlines without their own facility in the terminal would (i) use the facility of one of the three (or four) major carriers, (ii) engage an agent or (iii) possibly work direct to the consolidator).

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The proposal set out in the preceding paragraph, which has

since been termed Alternate X, could be expected:

(a)

to involve the highest overall cost and Government commitment. The approximate costs are as follows:

Government, for Hardstanding,

Taxiways, Roads and Fabric of all Buildings -

$18 million

Operator of Consolidated Area, for

Equipment in his area

-

$13 million

Sections

Airlines, for Equipment in their

Agents and Consolidators, for

Equipment in their Areas -

$15 million

$27 million

Total

$73 million

(b)

(c)

because of the larger building needed, to provide fewer aircraft parking bays than Alternate A unless more land was made available;

to be of doubtful efficiency since it would involve double or even triple handling of air cargo. Since there would be no guarantee that airlines would use it, there would be considerable risk involved for any operator of the consolidated area who would have to meet heavy outlays on equipment which might or might not be used. Therefore the possi- bility of finding an adequately backed and fully competent operator, who would be willing to invest the required amount of capital in the development of the consolidation area, would be small.

The consultants, after examining Alternate X maintained their advice that Alternate A as originally recommended was best suited to the needs of Hong Kong.

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The position, therefore, is that the consultants recommend Alternate A and the airlines (as represented by the joint committee - paragraph 9) Alternate X. The Director of Civil Aviation strongly re- commends Alternate A on the grounds that some form of participation by Government in the organisation and co-ordination of the services and facilities for handling air cargo is inevitable in view of the rapid and sustained growth rate and the vast throughput of air cargo forecast for future years and having regard to the importance of efficiency in relation

CONFIDENTIAL