Photo of Khaw Boon Wan from CNA

To fulfil Prime Minister Lee Hsien Loong’s pet project Terminal 5, Singaporeans will need more money to pay for the project costing “tens of billions” according to the Ministry of Transport. The PAP government will be borrowing billions in a “borrowing arrangement” to fund the Changi East project, but they said they themselves do not know how much it is going to cost.

Nonetheless, more money is need:

“The total costs and funding breakdown have not been finalised, as detailed engineering and design studies as well as discussions on the contributions are ongoing. As part of the project, which is set to cost “tens of billions of dollars”, a new Terminal 5, which is expected to start operations in 2030, as well as a third runway will be constructed… A borrowing arrangement will help spread the cost of Changi East (project) over more years. Details are still being worked out.”

The country’s national reserves will be used as collateral to back these debts:

“The Government is studying the possibility of providing a Government guarantee for the borrowing. This will enhance the confidence of creditors, and lower the overall financing cost of the project.”

Responding to the International Air Transport Association’s (IATA) criticisms, the Transport Ministry claimed that Singapore is just following Hong Kong, Dubai and Qatar’s footsteps, and insisted that Singaporeans will pay the majority of the costs:

“This practice is similar to what airports at Hong Kong, Dubai and Qatar for example have done. The Government will pay the majority of the costs for the Changi East project, while the CAG will commit a substantial portion of its reserves and future surpluses, and take on significant debt. Airport users will contribute a small share. The new levy is imposed to purposefully set aside funds for infrastructural developments.”