ENG-2005 — Page 331

Transport 285

Preparation for Growth

The Mainland's fast-growing aviation market brings growth opportunities as well as new challenges to HKIA. In the face of intensifying competition from other airports in the region, HKIA has been taking proactive measures to maintain its competitive edge.

To cope with the robust growth in demand for air cargo services, Asia Airfreight Terminal has invested $1.75 billion to bring its annual handling capacity from 600 000 tonnes to 1.5 million tonnes by 2006. DHL has accelerated its expansion plan at the airport by investing $858 million in its phase two express cargo terminal facilities, which will enhance the parcel sorting capacity from 20 000 per hour to 35 000 per hour by 2007.

The AsiaWorld-Expo opened in December, providing more than 70 000 square metres of space at the airport for exhibition and other functions. Other value-added facilities are also in the pipeline to meet the diverse needs of HKIA's customers. SkyPlaza, a multi-purpose development comprising a new departure hall, airline check-in counters, ground transportation facilities and retail and office space, is under construction and will open in 2006. Hong Kong Aircraft Engineering Co Ltd has invested $320 million in a second hangar at HKIA. The 13 200 square metre facility will be capable of accommodating two wide-bodied and one smaller aircraft when it is completed in 2006.

In addition, the Airport Authority will spend $4.5 billion on improving passenger and airfield facilities. The Passenger Terminal Building will be reconfigured and the baggage handling system upgraded to cope with the passenger growth. A satellite concourse with 10 parking stands will be constructed to facilitate the increasing traffic demand for smaller passenger aircrafts, while improvements to taxiways will be made to cater for the giant A380 aircraft. Ten additional freighter parking stands will be constructed to capture the rapid growth in cargo traffic. These projects will be implemented in phases and are expected to be completed by 2010.

Privatisation of the Airport Authority

Public consultation on the proposed privatisation ended on May 31, 2005 with a total of 69 written submissions received. Public opinion was divided. The Government's main objective in the proposed privatisation is to help strengthen the Airport Authority's market discipline in running the airport to achieve greater efficiency and more commercial opportunities. The Government will continue discussions with stakeholders and, before it goes on to the next stage of the privatisation exercise, it will ensure that the concerns raised during the public consultation are addressed satisfactorily.

Air Services

Under the specific authorisation of the Central People's Government, the Hong Kong Special Administrative Region (HKSAR) Government continues to negotiate and conclude bilateral air services agreements with aviation partners, providing the legal framework for scheduled air services between Hong Kong and other places. During