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Following is the opening statement by the Chief Secretary for Administration, Mrs Anson Chan, at the Legislative Council Select Committee on the New Airport this (Monday) morning:

Madam Chairman,

With your permission, I would like to make a brief statement on the role of the Airport Development Steering Committee (ADSCOM) in relation to the Airport Core Programme (ACP) and how Government arrived at the decision to open the airport on 6 July this year.

The Institutional Framework

I have been the Chairman of ADSCOM since November 1993. Members include the Financial Secretary, the Secretary for Economic Services, the Secretary for Works, the Secretary for the Treasury, the Secretary for Transport and the Secretary for Planning, Environment and Lands. As a high-level body responsible for overseeing the progress of the ACP, ADSCOM provides an overall steer on issues of significant policy or resource implications. Its Terms of Reference are to review the general progress of the new airport project and associated works, including the transport infrastructure; and to resolve problems referred to it by Policy Secretaries. ADSCOM meets regularly. From time to time, senior representatives of works agents, which includes Government departments, the Airport Authority (AA) and the Mass Transit Railway Corporation (MTRC) were invited to brief members on progress of the projects under their charge and to discuss major problems and ways of tackling them.

The ACP, which costs a total of $155.3 billion, is the largest and most complex infrastructure programme ever undertaken by the Hong Kong Government. Apart from the airport itself, ACP comprises nine other mega projects, viz. the Airport Railway (AR), Lantau Link, Western Harbour Crossing, North Lantau Expressway, Route 3 (Kwai Chung and Tsing Yi sections), West Kowloon Expressway, West Kowloon Reclamation, Central Reclamation Phase 1 and Tung Chung New Town Phase 1. To oversee such a massive programme, it would not be possible for ADSCOM to be involved in matters of detail or those of an operational nature. Planning, construction and operation of the airport and the airport railway are the responsibilities of the Airport Authority and the Mass Transit Railway Corporation under their respective ordinance. Since it was set up in February 1990, ADSCOM has already met 189 times and considered a total of 499 papers on various ACP related subjects.

The Decision on Airport Opening

I shall briefly recap the events leading up to the decision of the airport opening date.

The target date for the opening of the new airport was originally scheduled for April 1998 in the announcement made by the then Financial Secretary in June 1995 following the Sino-British agreement on the financing arrangements for the new airport and AR. However, it was always clearly understood that as a target date, it would require confirmation by a

formal announcement to be made closer to the time by the Government in conjunction with AA, in the light of the overall airport readiness achieved and the prospects of the AR being ready ahead of time. As for the AR, its planned completion date was 21 June 1998 but there was the expectation that given the past record of MTRC, progress on AR could probably be accelerated to support airport opening in April.

Because of the lead time required for various parties to gear up and in view of AA's contractual obligation to inform their business partners of a formal airport opening date 90 days in advance, it was necessary for a decision on a firm airport opening date to be made at least three months in advance.

From May 1997, ADSCOM had been requesting AA to advise on the overall readiness of the airport to open in April 1998. In May and June 1997, the AA made the assessment that the works should be completed in November 1997 and that other elements, such as the fitouts, the computer systems and the retail and commercial operations, should be in place by January/February 1998.

In October 1997, AA provided a more comprehensive report with a revised work programme and briefed ADSCOM on the works progress, training and trial preparations, and contingency plans. They also reported that Hong Kong Air Cargo Terminals Ltd (HACTL) should be able to achieve 50% of its designed capacity by end April 1998 which, together with the anticipated capacity of the other cargo franchisee, would be sufficient to support airport opening.

On the transport front, ADSCOM had looked into the possibility of advancing the completion of AR. But in October 1997, the MTRC made clear that they had difficulties in advancing the AR completion date to April 1998. I assured the MTRC that in no case would Government compromise the principle of safety and reliability.

In November 1997, AA expressed confidence that an April 1998 opening date could be achieved. In fact the AA was of the view that the airport would be ready for operation on 1 April 1998. However, given the delays in HACTL's works, AA proposed that the end of April would be a suitable date for airport opening.

AA's optimism at that time, however, was not entirely shared by ADSCOM members. From the NAPCO reports, it was noted that the works programmes had slipped, and the programme for systems tests, training and trials was tight. ADSCOM also considered alternative transport arrangements for opening the airport in April since the AR would not be ready by then. The general view was that although technically feasible, such measures would not be as efficient as AR and would not be commensurate with the level of service expected of a modern airport.

At the special meeting of 7 November 1997, ADSCOM remained concerned that AA had continued to qualify their statements on the airport opening date with provisos regarding HACTL and the Flight Information Display System (FIDS). Noting that the AA had previously experienced difficulty in keeping to their own milestones. I wrote to the Chairman of AA on 15 November 1997 asking a series of specific questions in order to determine airport readiness.

In his reply on 10 December 1997, the Chairman of AA responded to each and every question and assured me that after a very thorough review of progress in all areas, the AA was satisfied that the airport could be ready to open for safe, smooth and efficient operation on an appropriate date in the last week of April.

The crucial ADSCOM meeting took place on 2 January 1998, when the implications of an April or June 1998 opening were carefully examined. After a thorough discussion, ADSCOM finally decided that given the doubts on the adequacy of contingency transport arrangements and the state of readiness of airport systems and HACTL, airport opening should be deferred. Our aim was to produce on Day One a world class airport supported by efficient transport facilities.

Having ruled out the April date, ADSCOM chose 1 July 1998 as the ceremonial opening date of the new airport. ADSCOM felt this would allow more time for AR to get ready and would tie in with the first anniversary of the Hong Kong SAR. But we recognised the need for a time gap after the ceremonial opening to prepare for the airport relocation exercise.

At a special meeting on 8 January 1998, ADSCOM decided on Monday 6 July 1998 as the date for the new airport to begin operations. This would allow the relocation operation to take place on a Sunday night when overall traffic was lighter. Air traffic was also lighter on a Monday. I briefed the Chief Executive on ADSCOM's discussions and explained to him the reasons for deferring the opening date from April to July. He endorsed the decision and agreed that ExCo should be informed of ADSCOM's decision and briefed on our PR strategy. That was done on 13 January. ExCo endorsed the recommended opening date and a public announcement was made after the ExCo meeting.

The date for the airport ceremonial opening was subsequently changed to 2 July to avoid clashes with celebration activities that were planned for 1 July.

The decision to open the airport on 6 July 1998 was based on a careful and critical assessment of progress of construction works, the readiness of key elements of airport operation such as computer systems and HACTL, as well as transport arrangements. We were aware of the serious operational problems that had confronted some new airports elsewhere and the consequent adverse publicity. ADSCOM was anxious to avoid these problems. Although at the time of the public announcement, we had been criticised for the delay, we believed that the decision was prudent and the right one.

Since the announcement, ADSCOM had continued to monitor the overall progress of preparation for airport opening. To ensure its smooth and efficient operation, the Airport Authority had organised a total of 5 trials, 2 of which involved both passengers and aircraft. In fact, the final trial that took place on 14 June 1998 involved as many as 12,000 people acting as passengers, 35 airlines, all the ramp handlers, 4 aircraft and the AR. On FIDS, the AA management had assured ADSCOM many times on their ability to deliver. In March, due to the continuous concern of ADSCOM members over the stability of FIDS upon airport opening, AA was asked to put in place, which it did, a standby system and to ensure appropriate training was given to staff in the use of this system. On HACTL, its senior management had expressed no difficulty with HACTL being operationally ready by airport opening. They did not make any reference to any software or mechanical problems and the focus was on building works and the issuance of a Temporary Occupation Permit. HACTL obtained the Permit on 3 July. As for transport arrangements, the AR was commissioned on 21 June as scheduled. In the circumstances, ADSCOM had no reason to believe that the airport could not be formally opened on 6 July.

Concluding Remarks

Madam Chairman, I fully share the community's concern and disappointment that the new airport ran into difficulties on initial opening. Without sounding defensive, I would like to make a few points to put the matter in perspective.

First, we must remember that the ACP is the largest infrastructure development programme ever carried out in Hong Kong. The sheer scale and complexity of the works were unparalleled not just in the local context but also anywhere in the world. Faced with the immense task of transforming the remote little island of Chek Lap Kok into a world class airport supported by an efficient transport network and a new town, the Government mobilised the talents available both locally and internationally and set up a policy body to provide an overall steer on major issues concerning the ACP. At its peak, the entire ACP had 34,348 people working on it, employing 75% of the world's dredging fleet and was moving fill material at the staggering rate of 400,000 cubic metres a day. When ADSCOM was set up in 1990, Chek Lap Kok was a remote island accessible only by the occasional kaito or helicopter. In 8 years, it has become one of the most modern airports in the world within 23 minutes by train and 40 minutes by road from the heart of the city. The size of the airport island, for instance, is about the same as that of the Kowloon peninsula. The passenger terminal building is the largest building in the world. The airport itself is a place where a total of 45,000 people are currently working everyday. The ten major projects which make up the ACP have now provided us with a total of 1,669 hectares of new land for development, 34 kilometres of highway, a third cross-harbour crossing and a new town with an initial capacity of accommodating 20,000 people. Other than the new airport, all the other 9 projects have been commissioned successfully within the original programme and within budget.

Second, the relocation of the airport from Kai Tak to Chek Lap Kok overnight between 5 and 6 July was a mammoth exercise, involving the Government, the Airport Authority and its business partners. The operation involved months of meticulous planning, painstaking organisation and precise execution with the co-operation and support of all those concerned. The whole exercise spanned over a period of 3 months. The most critical phase took place on the eve of airport opening, when a total of over 3,300 movements took place by land, sea and air. The move that took place on 5 July 1998 and the early hours of 6 July 1998 was probably one of the largest civilian operation of its kind. Most remarkable of all is the fact that with the dedication of all those taking part and the understanding and support of the community, the overnight operation was completed smoothly without a single incident so that before daybreak on 6 July 1998, all the aircraft which needed to be repositioned and equipment essential for airport operations had already been successfully relocated to the new airport.

Third, despite the initial setbacks at airport opening, all the parties concerned have worked very hard to get on top of the problems. As a result, service standards have been improving steadily so that by the second week of airport operation, they had already reached an acceptable level. At the end of the second month, the airport was providing service at levels equal to or better than those achieved at Kai Tak which had been widely acclaimed. In fact, the body of favourable comments on the services provided at the new airport has been growing. A recent survey carried out by the Lingnan College has shown that 85.6% of the users interviewed indicated that they were satisfied with the services provided at the airport.

Fourth, although passenger and cargo flow was disrupted, all international standards of aviation security and air traffic safety have been strictly adhered to.

ADSCOM fully recognised the importance of the airport to Hong Kong's economy and reputation as an important centre of international and regional civil aviation, trade and finance. We therefore took a prudent, cautious approach in deciding the opening date of the airport. Having regard to AA's assurance that end April was a realistic opening date, ADSCOM felt that a July opening would give greater comfort to all parties and allow more time for everyone to be better prepared for a successful launch of the airport.

Government's expectation was that the new airport would function reasonably efficiently on Day One. Unfortunately this did not prove to be the case. We will co-operate fully with the Select Committee in its inquiry into what went wrong. The discussions that took place at ADSCOM are fully documented and are now with the Select Committee.

I would end with this remark. Government's aim was always to give the community a first class international airport that was safe, secure and efficient. The airport would open when it was ready and not before. We believed at the time that it was ready for operation on 6 July. If at any time before this date, there had been any indication that the airport could not cope with either the passenger or the cargo flow on the scheduled date, Government would not have hesitated to defer the opening date.

End/Monday, September 21, 1998

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