Do we even need T5 as planned?

by Brad Bowyer

Singapore’s Changi Airport averaged a little over 5.46 million passengers and 32,000 flights per month in 2018.

Before Jewel, it had an annual passenger handling load of 82m which has now been expanded to 85m so it was running at around 65.5m or 77% capacity. Although as most of us can attest it seems pretty empty most of the time when we are there so not sure if that’s entirely accurate.

According to our local air traffic controllers, our current runways are almost at full capacity (90% of est theoretical max 430,000 flights per year), but we will be adding a 3rd runway to the mix by mid-2020 that will increase that by approx. 40% according to simulations.

Why are we building such a big terminal, est 50 million passengers, when even if our expanded runways could reach a theoretical maximum capacity of 600,000 flights that would only handle around 102m passengers with current air fleets? As the A380 is being canned and bigger planes are not on the drawing board, how will the passengers arrive?

Also, why are we doing it now when we still have so much spare capacity and arrivals are only growing around 4.1% per year averaged over the last 5 years which is half of what it was the preceding 15 years. Even if that is maintained and does not drop further, we are nearly 10 years away from peak capacity… Again if that’s accurate and not under quoted.

But most of all why does it cost so much? In fact, we don’t know exactly what it will cost we are just told 10’s of Billions!

Here is a brief history of Changi Airport building costs.

• All 4 Terminals sit on approx. 1,350 Hectares of Land
• T1 opened in 1981 at a cost of just under $1Billion and has undergone several upgrades over the years, 1995 $170m, 1999, $420m and 2013 $500m.
• The new Jewel extension to T1 just opened this year and cost $1.7B
• T2 was opened in 1990 and cost $838m
• T3 was opened in 2008 and cost $1.75B
• T4 opened in 2017 and cost $985m

I believe that means we will have spent around $7.36B building the entire airport excluding the extra runway (which is est 2.3B more for all related contracts) when all that is added up.

(By the way, did you know Temasek bought the airport from the government for $3.28B and below book value in 2009? But that is another story)

The exact size of T5 is not known but we have variously heard its bigger than T1, 2 and 3 combined and 10 times the size of Vivo City and sits on approx. 1000 Hectares of land with a projected passenger capacity of between 50 and 70 million people.

As Vivocity is 140,000m² let’s say T5 will be 1.4million m² that’s 7.2 x the size of T4.

Now T4 costs are quite current so 7.2 x $985m = $7.1B as a fair estimate to build T5 right? almost the cost of the entire existing airport.

Now, of course, they will bling it up a bit as the main terminal but how much can they spend on glitz and glamour? Another $900m or being extravagant another $1.9B which is 25% more?

So, let’s say a glammed up T5 with all ancillaries’ costs $9B which is what the entire current airport cost so what are the other 10s of billions being spent on?

Every tax dollar the government spends should maximise the value for Singaporeans and should be fully accountable so can anyone explain why T5 while being smaller than the entire current airport is budgeted at unknown multiples of what that cost?

Especially when we likely can’t even land the passengers to fill it and don’t appear to need it urgently now anyway.

It’s like piecing together a jigsaw puzzle when the pieces are scattered throughout the forest but when combining the publicly available information the facts, reasoning and numbers just don’t add up? Can anyone in the aviation or construction industry enlighten me?

The Top 5 of the world’s busiest airports are in order: –

1. Hartsfield-Jackson Atlanta International Airport handling 107 million passengers on 895,000 flights from 5 runways,
2. Beijing Capital International Airport with 101 million passenger movements,
3. Dubai International Airport handled 89 million passengers,
4. Los Angeles International Airport with 87.5 million passengers and
5. Tokyo’s Haneda Airport with 87.1 million passengers

Singapore is only 19th on the list and ranks behind regional airports: –

8. Hong Kong International Airport with 74.5 million passengers,
9. Shanghai Pudong International Airport with 74 million passengers
12. New Delhi’s Indira Gandhi International Airport with 69.9 million passengers,
13. Guangzhou Baiyun International Airport with 69.8 million passengers even
18. Jakarta’s Soekarno-Hatta International Airport with 66.9 million passengers

Atlanta continues to dominate the passenger market because of its location as a major connecting hub and port of entry into North America. It’s within a two-hour flight of 80% of the United States population of more than 300 million people.

The Chinese airports are growing massively because China is a booming economy and home to 18% of the world’s population and India is similar.

Indonesia’s economy has been growing at annual rates of over 5% and home to nearly 270 million people with a growing network of regional airports that hub out of Jakarta.

Contrast the above with Singapore with a population of 5.7m, a GDP rate that has been stuck in the 2% to 3% range for years and slowing and its regional air hub status being challenged and eroded by new or expanded international airports in KL, Bangkok, Manila and Jakarta and you have to ask…

Why do we need an airport with a 135m passenger capacity? Especially as I noted when our 3 runways may only be able to move enough flights for 100m anyway?

Wouldn’t it be better to build a T5 along the lines of T3 adding 20-25m capacity and even if we bling it with another Jewel equivalent won’t cost much more than $4 billion. That would bring Changi to 105-110m passenger capacity, equivalent to the world’s busiest airports and its theoretical maximum flight capacity anyway.

Then we can take the rest of the “10’s of Billions” and invest them to boost our economy and tourism industries so 100m plus people actually have a reason to come here and it provides jobs and economic opportunities for Singaporeans at the same time?

I hope someone has done some serious cost-benefit analysis and they can share it with us because from a layman’s point of view this does not seem like financial prudence or is economically justifiable by any stretch of the imagination.

Every dollar spent is a choice but where is the public accountability for these mega projects especially when the choices made don’t seem to be the most informed ones?

Will Changi airport become a giant white elephant while our economy and people continue to languish?

Oh yes, and China is opening the world’s biggest airport this year in October, built from scratch at a cost of approx. US$12B (Sgd $16B), and which has 4 runways and can handle 620,000 flights and 100m passengers. Compare that to T5 and what we get for “10’s of Billions” and think on that for a while!

This was first published on Brad Bowyer’s Facebook page and reproduced with permission.