Secretary for transport and housing Anthony Cheung said that the current two-runway system will soon be full and so Hong Kong International Airport needs a third runway to maintain its competitiveness as an aviation hub.
The project will require the reclamation of 650 hectares of land and construction is expected to start next year.
Additional taxiways and ramps will also be built as well as new passenger transport and luggage processing facilities. Terminal 2 will also be expanded to accommodate the additional traffic.
The authority will fund the project with internal funds and borrowings, and by charging airlines and users. It will stop sharing its profit with the government for 10 years to help fund the project.
It is also proposed that passengers pay an airport construction fee of HK$180 from next year. However, the government has asked the authority to consider boosting external borrowing to lower the passenger charge.
Cheung said that the government will work with Mainland and Macau aviation authorities to implement an airspace enhancement plan, so the three runway system can meet its target of accommodating 102 flights an hour.