Monday, 4 December 2017

Changi Airport Terminal 5: Decades of groundwork for T5 to take flight

Singapore has thrived by betting big on future trends that make or break economies, whether in air or sea transport, urban development or water sustainability. It is how the Republic rose to become the world's top transhipment hub, a leading air hub and a model liveable city. In the first of a three-part series on major infrastructure projects, Insight looks at what it takes to get Changi Airport Terminal 5 off the ground.
By Karamjit Kaur, Senior Aviation Correspondent, The Sunday Times, 3 Dec 2017

From the air, it is a striking sight for travellers flying into Singapore: A massive construction zone, as big as Changi Airport itself, with trucks constantly on the move along dirt and paved roads, huge canals being dug and a network of taxiways being laid, as long as the Pan-Island Expressway from Tuas to Tampines.

Next door, it is business as usual with a plane landing or taking off every 11/2 minutes.

By the time construction and other works are completed around 2030, Changi Airport will have almost doubled to cover more than 2,000ha, with enough room to eventually handle up to 150 million passengers a year, compared with 82 million now.

The Changi East project - as the new development is referred to - is Singapore's most ambitious attempt, since Changi Airport opened on July 1, 1981, to cement the Republic's status as a key aviation hub for regional and global traffic.



The stakes are high. The aviation and maritime sectors jointly account for about 10 per cent of Singapore's gross domestic product and provide nearly 250,000 jobs.

A global airline body forecast that Singapore's total air passenger traffic and the number of aviation-related jobs could more than double in 20 years.

This would increase the aviation industry's contribution to Singapore's GDP by the same quantum to an estimated US$65 billion (S$88 billion) in 2035, said the International Air Transport Association.

A VERY LONG GAME

Actual ground works at Changi East started just three years ago, but the T5 story dates back almost three decades.

The move from Paya Lebar to Changi in 1981 was an enormous task: 550 buildings demolished, 4,500 graves exhumed, 200ha of swamp land cleared, one airbase that was built during the Japanese Occupation removed, and 870ha of land reclaimed.

Yet, within a decade of the opening of Terminal 1, planners were at it again, hunting for the next big plot of land for further expansion.

In 1989, even before T2 started operating, the Cabinet approved plans for more land to be reclaimed for airport development. This is the area where T5 is being constructed.

Work started almost immediately, recalled government officials who were part of the team.

Though the Cabinet had given approval for the land reclamation, airport planners still had to justify the need for the land.

One of the earliest plans was to build three passenger terminals - with a total handling capacity of 30 million passengers a year - at the current airport site.

There was foresight then to see the need for a fourth, fifth and even sixth terminal at the Changi East site. But the fourth terminal was not built as initially planned; T4 opened last month where the Budget Terminal used to be located. The spartan facility was pulled down to cater to traveller demands for better facilities and services.

Before the Changi East plot could be developed, questions from the Urban Redevelopment Authority came fast and furious, the officials - who asked not to be identified - told Insight. Why only 30 million passengers with three terminals? Why can't the capacity be stretched? Why not move to Changi East later?

It pushed the airport to think out of the box, to maximise existing resources and leverage technology, to do more with less. Last year, Changi handled a record of about 60 million passengers with three terminals operating.

In the 1990s, a big debate also centred on the distance between the airport's runways. The existing airport had two landing strips but a third would eventually be needed to serve the Changi East area and a growing number of flights. How far it should be from the existing two runways was a critical discussion that would later determine the size of the plot of land earmarked for the Changi East development.

Airport planners were also mindful that a wide enough separation was needed to cater for bigger planes that were sure to come in the future.

They were spot on. In 2007, the Airbus 380 - the world's biggest passenger jet - started flying commercially.

Without adequate separation, Changi was worried there would not be space to build enough aircraft gates and aerobridges.

This would have meant the need to move more travellers by bus between the airport terminal and aircraft, which was not desirable. Indeed, a pet peeve of T4 travellers - even though they do not have to be bussed to and from the terminal - is that there is no skytrain link to the other terminals. This means having to do transfers by bus.

It took 1 1/2 years but in the end, the airport got the runway separation it wanted. With that settled and reclamation works in full swing, it was still another 20 years before the final plan for T5 would be settled. The time was needed for meticulous examination and assessment of different proposals on the future design and layout of T5.

Planners also studied what other airports in the region and elsewhere were doing. The trend was a shift away from separate small and medium-sized terminals to mega terminals. This was eventually the design picked for T5.

In April 2012, a high-level steering committee, chaired by then Minister of State for Finance and Transport Josephine Teo, started work on putting together a final plan for T5.

In 2015, it was announced that T5 would be a mega terminal with two satellite terminals that would eventually be able to handle up to 70 million passengers a year. Such a design would allow operations to be better integrated and more efficient use of resources.


THE NEED TO PLAN

Changi Airport Group (CAG) chairman Liew Mun Leong said: "When we finished T3, many people said there was a lot of empty space, empty check-in counters. They called it a white elephant.

"Today, we are saying there is not enough room."

T3 opened in 2008, the same year a global financial crisis caused demand for air travel to plummet. It took more than a year before recovery started.

Mrs Teo, now a Minister in the Prime Minister's Office, told Insight recently: "Air hub development projects require heavy resource commitments. Because of the long gestation, our plans must also stand the test of time. The inter-agency Changi 2036 Steering Committee spent countless hours analysing data and trends, the costs and benefits.

"But it is ultimately a leap of faith, a statement of our belief that Singapore will still be attractive to travellers and businesses years after we decide to build."

Second Minister for Transport Ng Chee Meng said: "First-mover advantage is vital in the aviation industry. Airport infrastructure takes time to plan and to complete. With sufficient capacity, airlines can grow and the Changi air hub can grow."

Other airports are not standing still. Dubai has plans to increase its annual handling capacity from about 90 million to 250 million passengers, while South Korea's Incheon Airport is ramping up from more than 60 million to over 100 million passengers.

In Hong Kong, a third runway is being developed, while in India and China, new airports are popping up everywhere.

Mr Lee Seow Hiang, CAG's chief executive officer, told Insight: "Every airport in Asia is probably calculating like we are, trying to predict the kind of growth that will exist. In fact, if no other airport is growing in Asia, we will have to check our assumptions to see if the calculations we have made are too far-fetched.

"Nobody can tell the future. There can be unexpected disruptions beyond what any of us can imagine. But the bet on the hub is very often a fundamental bet on the growth of the overall region and our continued relevance in the growing region."

A RISKY ROAD AHEAD

However, projections are not always accurate.

Mr Lee admitted: "We don't have a crystal ball, we are not perfect... Even with the philosophy of building supply ahead of demand, there have been moments in the last 30 years when we experienced a bit of tightness in T1 before T2 opened. The moment we opened T2, we had to upgrade T1 and extend it.

"It is a parlous game to say if it was the right or wrong planning, because it is the wrong frame. It does not capture the inherent complexities of looking into the future... You have to take projections 20, 30 years ahead. But that is something that we have to do."

Based on an annual compounded traffic growth of between 3 per cent and 4 per cent, Changi could be handling about 90 million passengers a year, in 15 years, said Mr Lee.

By 2019, the existing four terminals will be able to handle up to 85 million passengers annually. "We don't think it is an outlandish projection to cater for 50 million a year in T5 (under the first phase of the development)."

If the projections do not come to bear and traffic growth slows, Changi will look at other options once T5 starts operating - it may be a good opportunity, for example, to do whatever upgrades or renovations that may be necessary at the other terminals, given the spare capacity. But if traffic grows too fast, Changi could face a capacity crunch. The airport will then have to leverage heavily on technology, for example, to speed up passenger processing and look at other options to maximise resources.

Mr Lee said: "We expect to experience growth. But exactly how fast? There will be ups and downs. The aviation business is a deeply cyclical one. While it is hard to be precise, what we can do is to maximise everything that we can, in a reasonable timeline, and put the necessary capex (capital expenditure) in place."

MORE THAN JUST TERMINALS AND RUNWAYS

A spanking new passenger terminal is nice to have, but for Changi Airport and the Singapore air hub to fly high, airlines and travellers must want to come here.

"Growth is not a given and we should not take our airport's existence for granted. No one owes us a living," Mr Lee stressed.

Mr Liew said: "Growing an air hub is not just about building terminals and runways. I always say Singapore is good in advance infrastructure planning but we are also very good at systems planning and setting high standards."

He added: "Many airports set service and other standards but don't have the discipline to enforce them. Our competitive edge comes not just from our physical infrastructure and facilities, but also from our software, systems, discipline, staff and our ultimate care for the passenger."

He emphasised that for Changi to succeed, each of the 50,000 people who work there must do his part.

Mr Leong How Yin, 60, Changi Airport's project director for the Changi East development, who also worked on T2 and T3, said: "My age and health may not allow me to see this project through. Still, there is inherent satisfaction, being part of a development of this scale and significance, which is much bigger than I or anyone else on the team."




THREE TUNNELS TO MOVE BAGS AND TRAVELLERS

Three huge tunnels will be dug to move bags and people between the future Terminal 5 and the current airport. Work is set to start in 2019 and should take two to three years, says Changi Airport Group's project director for the Changi East T5 development, Mr Leong How Yin.

Each tunnel will be about 3km long.

The first, 9m wide, will be for bag transfers for travellers with connecting flights.

Then, there will be an underground train system - the equivalent of today's skytrain - for travellers. It will likely be from T5 to T2.

The tunnel will be more than 6m wide in each direction, says Mr Leong.

An MRT tunnel is also planned, he adds, without elaborating.

It is understood that the Thomson-East Coast Line - scheduled to open in stages from 2019 to 2024 - is likely to stop at the future T5 before terminating at the existing Changi Airport MRT station.

Other major infrastructure works at Changi East include constructing four new canals to prevent flooding, and getting a third runway ready for commercial flights.

An existing landing strip at the Changi East site, which was used mainly for military flights, is being lengthened and strengthened to be able to handle bigger commercial aircraft like the Airbus 380.

The works that started about two years ago are expected to be completed in the middle of next year, though Changi Airport is expected to utilise all three runways only in the early 2020s.

In the meantime, a new taxiway, linking one of the two existing runways at Changi Airport to the new runway at T5, is almost ready.

It will be used during Singapore Airshow 2018, which will be held in February at the air show site, near the T5 construction zone.

Aircraft flying in for the air show, held once every two years, used to land at the runway that is now being redeveloped, before being towed to the show site.

But because the runway will not be ready in time for the event, planes will have to land at Changi's existing runways and move to the air show venue from there.





Travellers may have to pay fees to help fund Changi T5
Total cost of Changi East airport development expected to run into tens of billions of dollars
By Karamjit Kaur, Senior Aviation Correspondent, The Sunday Times, 3 Dec 2017

Fees and charges for travellers flying out of Changi Airport and airlines operating there could increase from as early as next year.

This is to help pay for the future Terminal 5 (T5), which is slated for completion around 2030, The Sunday Times understands.

The total cost of the Changi East development being built near the current airport, which includes major infrastructure and ground works, is expected to run into tens of billions of dollars.

The future terminal is expected to eventually handle up to 70 million passengers a year. With T5, Changi Airport will have almost doubled in size to cover more than 2,000ha, with room for up to 150 million passengers a year.

The Changi East project - as the development is referred to - is the most ambitious attempt to cement Singapore's status as a key aviation hub since Changi Airport opened in 1981.

Asked to confirm if users will have to pay for T5 before it opens, a spokesman for the Transport Ministry said: "We have not ruled out implementing a passenger fee."

The total fee for travellers flying from Changi Airport, made up of components such as a security tax, is currently $34. This was last increased in April 2013, from $28. Transit passengers pay $6.

Given the strategic importance of the Changi air hub, the Government will bear "a large proportion" of total costs for the Changi East project, said the spokesman.



Prime Minister Lee Hsien Loong had earlier this month announced that taxes will be increased as government spending on investments and social services grows. But he did not say when taxes will be raised.

The rest of the Changi East bill will be shared by Changi Airport Group (CAG) - a corporate entity which operates the airport - and other aviation stakeholders, the Transport Ministry said.

The Government has sought industry feedback and is studying various joint contribution options, the spokesman added.

Other airports have recently introduced similar user charges. Since last year, Hong Kong International Airport, which is building a third runway, has been collecting between HK$70 and HK$180 (S$12 and S$31) a traveller, depending on the class of travel and flight duration. Seven in 10 passengers can expect to pay HK$90 or less, a spokesman told The Sunday Times, adding that the fee has not affected the airport's competitiveness.

The airports in Dubai, United Arab Emirates and Doha, Qatar, have ongoing expansion projects and last year introduced a departure tax for travellers which is the equivalent of S$13.

CAG chief executive Lee Seow Hiang said: "We're confident of the need for T5, but it's so big, everyone has to chip in. We're also putting our money where our mouth is, which is why a huge part of our profits and future profits will be ploughed back into the Changi East development."

For the financial year ending in March this year, CAG's profit after tax was nearly $660 million .

Asked if the higher charges could affect Changi's competitiveness, Mr Lee said: "It would be silly for us to overdo this... If the airlines cannot succeed with us, what is the point of raising the capacity?"

Singapore Management University Associate Professor Terence Fan, who specialises in transport, said it is fair that potential beneficiaries help pay for the T5 development.

This includes airlines and travellers who may not end up using the facility but will benefit indirectly, if other terminals are less crowded and more comfortable.

Mr Abbas Ismail, course manager for the diploma in aviation management and services at Temasek Polytechnic, said options must be carefully evaluated. "Changi has always taken the approach to be pro-business and competitive by keeping its aeronautical charges (such as aircraft parking and landing fees) low and even providing the necessary incentives to support traffic growth.

"By getting users to start paying for T5 even before the terminal opens, airport planners must think carefully about what signal it will send to the industry," he said.


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