Govt to co-fund Changi's big expansion project
Singapore's government will co-fund Changi Airport's biggest expansion to date, including the construction of the future Terminal 5, with other stakeholders chipping in.
Senior Minister of State for Transport Josephine Teo said last week that the final cost-sharing has not been decided.
The project – expected to cost tens of billions of dollars – is an investment that is beyond the means of Changi Airport Group (CAG), its chairman, Liew Mun Leong, has said.
Teo said the right thing to do would be to share the investment costs among the government, the CAG and users of the facilities.
"The government will look at this from the perspective of how it benefits Singaporeans and Singapore as a whole," she said. In charging airlines and travellers, the government is mindful that Changi Airport must remain competitive in an increasingly challenging environment.
The project aims to cement Singapore’s position as a key hub for regional and global traffic, amid fierce competition from rival airports in Hong Kong, South Korea and elsewhere. The development of the 1,000-hectare Changi East site – about three-quarters the size of current airport premises – includes the construction of T5, a third runway, new taxiways and plane parking areas, as well as cargo facilities.
Liew has suggested that one option was for the government to foot the entire bill, leaving his team to run the airport. Explaining the rationale for co-funding, Teo, who is also senior minister of state for finance, said fiscal requirements for the government, as a whole, will become more significant.
"We already know that we are going to have to spend more on healthcare. We have a lot of social programmes which we think are important. We want to continue to invest in education for our people and a large part of it is also the SkillsFuture piece."
Still, the government knows how vital the aviation sector is and will factor this in when funding decisions are made, she said.
"If you look just at the number of people working at the airport, it is quite modest – 77,000, 3 per cent of GDP," she said.
"But if you look at it through a broader lens and ask which are all the other sectors that will be quite hurt if your air hub was lousy, then you would add tourism, finance, retail. And if you add all of those sectors, it is another 16 per cent of the economy, another half a million people... Then you say the externalities are very big.
