Mini-Case No. 1: The Third Runway – To Build or Not To Build?

Similar to all top programmes of public policy in major universities around the globe, cases are often used in MPUP for our workshop of executive training to facilitate the learning of our participants in integrating theory with practice. Below is a sample of a case we have used in our recent executive training for senior officials in a major government department in the HKSAR Government.

A. Background

Hong Kong Airport’s Third Runway is a part of the Hong Kong International Airport (HKIA) Master Plan 2030. It aims to increase the runway capacity of HKIA as they estimated the existing runway will reach its capacity sometime between 2019 and 2022.
In June 2011, the Airport Authority (AA) published the HKIA Master Plan 2030 (MP2030) which outlined HKIA’s future development options. A three-month public consultation exercise was carried out to collect views and feedbacks of the public in which 73% of respondents supported the proposal to expand HKIA into a three-runway system.
On 17 March 2015, the Executive Council affirmed the need to have the three-runway system. The current plan is to commence construction of the third runway in 2016 for commissioning in 2023 to provide capacity sufficient to meet traffic demand at least up to 2030.
Estimated cost:
Date to the April 2015, the latest cost of the third runway is estimated to be around $141.5 billion in money-of-the-day prices .
Financing Arrangement:
For financing arrangements, the Administration has indicated delaying dividend payment by AA to the Government and bonds issued by AA. The latest measure spares taxpayers from any expense as funds are to be drawn internally from the authority's surpluses, user charges and external financing via bank loans and bonds, and a levy of $180 HKD on every departing passenger.

B. The Arguments and Controversies

This infrastructure project has generated diverse opinions and conflicting views in society. There are views that the third runway will bring enormous economic benefits to Hong Kong and concerns that any delay in the completion of the third runway will result in major economic loss and make Hong Kong lose its competitive edge compared with the neighboring counties and cities. The project is also self-financing and can go ahead without the Legislative Council (Legco) approval.
On the other hand, the societal controversies arose from a diverse concern ranging from environment, cost and transparency of budget, importance of airport to the further and sustainable development of the city, to doubts on cost-benefit, worrying that the third runway could go the same way as other big infrastructure schemes, often described as “white elephant projects” which encounter severe delay and over-budget. There are also concerns that the financial arrangement may violate the Basic Law (Article 73) as it takes away the power of public finance from the Legco.
Experts including two of the former Aviation Department heads have spoken out against the project, questioning the availability of “air space”. Many Legco members either have reservations or are against the project at the moment. The public opinions also seem to have shifted since the announcement of the project. According to the latest Baptist University poll commissioned March 2015, 68% of the citizens agreed or strongly agreed that the Airport Authority should focus on improving the operations of its two runways before considering building a third. They also found 57% agreed or strongly agreed that the government should wait for the outcome of a judicial review challenging the project's environmental impact assessment before progressing further. Asked if the government should become the authority's guarantor and allow the project to be financed in a way that bypassed Legislative Council oversight, 68% disagreed or strongly disagreed.

C. The Task: Your Role and Decisions

Group A (Affirmative):
You are the Secretary for Transport and Housing, how would you make the following decisions:
• If you could go back in time, what you could have done better to promote the policy?
• Now, given what have happened, what would you do to push forward this policy?

Group B (Opposition):
You are a citizen against the building of the third airport runway:
• If you would like to form an alliance against the project, who would you approach and why would they join it? Also identify the “enemies” of your alliance.
• What would you and your alliance do to stop the third runway project?

Source of the image: Airport Authority Hong Kong