Singapore defends move to raise charges at Changi

Singapore’s transport ministry has defended Changi Airport Group’s (CAG) move to raise aeronautical charges for its expansion, explaining that the Changi East project is “akin to constructing a second airport”.

“The project’s scale and complexity is unprecedented. Our airport expansion thus far has largely consisted of the construction of new terminals. But the Changi East project goes far beyond the terminal building itself,” says the city-state’s second minister for transport Ng Chee Meng.

He adds that extensive land preparation and drainage works at Changi East have been underway since 2014, as has works for a three-runway system since 2016. There will also be a network of tunnels and systems, including baggage handling and an automated people mover.

CAG is evaluating proposals from three consortiums bidding to be the master building consultant for Terminal 5.

The new terminal will have an initial capacity to handle 50 million passengers per annum, with a provision to increase to 70 million. This means that it will be larger than terminals 1 to 3 combined.

On why the airport is raising charges now when the new terminal will only be operational around 2030, Ng says that the Changi East project goes beyond the terminal.

“Airport users will start to benefit from Changi East progressively. For example, Runway 3 will be ready for civil aviation by 2020, and the three-runway system by be operationalised in early 2020s, even as T5 will only be completed around 2030,” he says.

“Having users start paying earlier will also avoid large spikes in the amount they have to pay later on.”

The transport ministry has so far only said that Changi East is expected to cost “tens of billions of dollars”. The government will fund the majority of the costs and has committed more than S$ 9 billion, while CAG has also committed S$ 3.6 million, and will commit reserves and future surpluses, as well as take on substantial borrowing for the project.

Last week, CAG announced that it will raise the Passenger Service and Security Fee as well as Landing, parking and aerobridge fees from 1 July. A new airport development levy will also come into effect.

IATA has since said that that the pre-funding model is “unfair” to current passengers and airlines since they might never use the new facilities. It also called for greater transparency on the projected cost of Changi East and Terminal 5.