$65b on Airport projects for 2 years
At least 60 airport projects have begun to get a total of 450 billion yuan ($65.88 billion) several days ago. According to a CAAC press release, at least 40 of the projects will start next year and cost 200 billion yuan.
The money will be used to expand existing airports in Shanghai Pudong, Guangzhou, Chengdu and Nanjing and build new ones in many inland cities, including Yan’an city in Shaanxi province and Daocheng in Sichuan province.
A CAAC spokeswoman said that in order to stimulate domestic demand and boost the economy, an additional 3 billion yuan has been granted for airport projects by the central government in the fourth quarter of this year. What is more, the CAAC has determined to expand existing airports and build new ones in western China with the additional money.
Airports in Kunming, Chongqing and Nanning will be expanded, too. New airports will be built in Hechi in the Guangxi Zhuang autonomous region and Tengchong in Yunnan province. These projects would cost 30 billion yuan totally.
The expenditure on ongoing airport projects across the country, however, adds up to 100 billion yuan, the CAAC said.
97 airports have been programmed to be built from 2006 to 2020, while the total number of airports in China will be 244. Once these are finished, 82% of the country’s people will be able to reach an airport in 90 minutes. Till two years ago, only 52% could reach the goal.
Experts say the huge expenditure on airport projects will boost the construction, steel and cement industries in the short term.
6 billion yuan from local governments and other sources could be brought about by 1-billion-yuan investment on airport constructions, according to Li Xiaojin, professor in Civil Aviation University.
But for domestic airlines, whose passenger flow drops consecutively in July, August and September, such investments are “not enough to pull them out of their plight”, said Li Lei, an analyst with CITIC China Securities Co. These airlines want aviation oil price to be lowered and passenger flow to increase. But large-scale airport constructions can do good to the aviation industry, Li said.
According to CAAC earlier this month, it had spent 11.7 billion yuan of the air port construction fee to subsidize airport construction projects and to operate of small airports in western China and maintain airlines regional flights.
Priority would be given to the small-and-medium-sized airports in central and western China, which handle fewer than 5 million passengers a year, said Zhou Laizhen, director of CAAC’s financial department last week. Zhou also added that civil aviation enterprises are capital-intensive. And because of the global financial crisis, many of them are under huge pressure. That’s why they expect subsidies so much.
A total of 122 small-and-medium-sized airports’ number went up after they got subsidies in 2006, and about 70% of which were in central and western China.
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