Singapore Budget 2018: Implementing airport levy now avoids large spikes later on: Ng Chee Meng

IMPLEMENTING the airport development levy earlier to help fund the Changi East development avoids large spikes in the sum that users will have to be pay later on, said Second Minister for Transport Ng Chee Meng in Parliament on Wednesday.

It was announced last week that from July 1, passengers departing out of Changi Airport will fork out a new airport development levy (ADL) of S$10.80 per passenger, while transit/transfer passengers will pay S$3 per leg when they pass through the airport.

Meanwhile, the airport's passenger service and security fee (PSSF) will go up by S$2.50 to S$30.40 from July, and airlines will face a 1 per cent bump in landing, parking and aerobridge (LPA) fees. PSSF and LPA fees will continue to go up by a further S$2.50 and 1 per cent respectively each year until 2024.

"Airport users will start to benefit from Changi East progressively," said Mr Ng during the Committee of Supply debate. "Having users start paying earlier also avoids large spikes in the amount they have to pay later on."

Aside from Terminal 5, the Changi East development will also facilitate the transition to a three-runway system from two currently, as well as a network of tunnels and systems. The third runway will be operational by the early 2020s, while Terminal 5 is due to come onstream in 2030, adding capacity of 50 million passengers per year. Changi Airport currently has a capacity of 82 million passengers across its existing terminals.

Mr Ng also touched on the decision to opt for a flat ADL instead of a tiered one.

"Passengers make use of the same facilities at the airport, regardless of where they are flying to," he said. "It is only fair that the charges that they pay are the same. This is the same principle that has been used for other passenger charges such as the aviation levy and the passenger service and security fees."

The entire Changi East development will cost "tens of billions of dollars", with the government funding the majority of costs, while airport operator Changi Airport Group (CAG) will also contribute funds, he said. The balance will come from passengers and the airport community.

In response to a question from Member of Parliament (MP) Zaqy Mohamad on the cost of expanding Changi Airport vis-a-vis Seoul's Incheon Airport, Mr Ng pointed out that Incheon Airport only added capacity of 18 million passengers per year, akin to Changi's Terminal 4. Changi East and Terminal 5, on the other hand, is like "building a brand new airport". This comes as traffic at Changi Airport continues to grow. For 2018, Changi Airport is projected to grow between 3.5 per cent and 5.5 per cent. In the coming years, traffic growth is expected to be at 3 per cent to 4 per cent annually.

He added: "The government will ensure prudent spending on Changi East. The project will deliver good value for money. We have thoroughly analysed the traffic projections for Changi. We are also carefully scrutinising the cost of Changi East. We will strive for the most cost-effective way to develop Changi East, and ensure that Changi continues to be world class."

CAG is in the process of evaluating proposals from three consortiums bidding to be the master building consultant for T5. Mr Ng said that all three have submitted designs that will set T5 apart from other airports around the world.

For more Budget 2018 stories visit bt.sg/budget18