He said airport users need to contribute for Changi East development, which is expected to cost tens of billions of dollars.
Implementing higher aeronautics fee and the new Airport Development Levy (ADL) early will avoid the need for passengers and airlines to pay bigger tax in the future for Changi East development, said Transport Minister Ng Chee Meng at the Ministry of Transport’s Committee of Supply Debate 2018.
“Some have questioned why we are increasing the charges now when T5 will only be completed around 2030. As I have explained, Changi East is not just about Terminal 5. It is a massive project with many phases,” Ng explained. “For example, Runway 3 will be ready for civil aviation by 2020, and the three-runway system will be operationalised in the early 2020s, even as T5 will only be completed around 2030. Having users start paying earlier will also avoid large spikes in the amount they have to pay later on.”
Ng noted that the Changi East development is expected to cost tens of billions of dollars.
“The Government will invest substantially in Changi East, and foot the majority of the costs. To date, the Government has committed more than S$9 billion into the project. The airport operator, Changi Airport Group (CAG), has also committed S$3.6 billion to date, and will commit its reserves and future surpluses, as well as take on substantial borrowing to fund the project,” he added. “Airlines and passengers will also need to contribute towards enhancing this airport infrastructure.”
The International Air Transport Association (IATA) earlier questioned the need to impose higher aeronautics fees for passengers and airlines, and the new Airport Development Levy (ADL) to help fund the Changi East development project.
“Why not just have CAG and the government bear the entire cost through what they are already doing instead of having to pre-finance it by passengers and airlines who might not use it when it is ready?” said IATA.
In line with this, IATA urges greater transparency as to what will be the estimated cost of the Changi East development project and how it will be divided among the government, CAG, and the airport users.
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