Hong Kong International Airport is located in the Island of Chek Lap Kok, which comprises of reclaimed land in the area where the airport is constructed. It has been in operation since 1998, and acts as a passenger hub and trans-shipment centre. In 2012, the airport recorded the highest cargo shipment of 4,062,261 metric tonnes (Lassale, 2013). The air cargo industry has been expanding over the years. This is among the reasons why the airport was constructed in order to take advantage of this situation. The main drivers of change under this context are increased global trading activities in china, changing life styles and efficient marketing strategies. Changing lifestyles emanate in the way that people are adopting air transport in their day to day activities in China.
The purpose and scope of this paper is to analyze the impacts of megaprojects in a country. In particular, there will be an examination of the economic and social importance of Hong Kong International airport as a mega project in China. The analysis will examine both institutional and national contextual factors. Events or situations that necessitated the construction of this megaproject will also have a lime light. This is because they are the actual contributors to its existence. Necessity usually leads to several inventions. The premise in this analysis is that the construction of Hong Kong International Airport has help in improving the economic conditions of the country in a huge way. Lack of its existence would have caused some inconveniences in the light of China’s rapid economic growth rate.
The themes to be investigated are the issues or occurrences that led to the development of the airport. The significant role played by the airport in enhancing a favorable economic and social environment. Future expectations from the project are also relevant in examining the importance of this project for the future generations. Examining whether the project has achieved the objectives that led to its realization is also valid. Generic observation in this case study is that traffic in air transport is increasing significantly. This is due to the current nature of various economies that are postulating globalization. Under contextual specific observation, Hong Kong International Airport is showing significant progress since it has come to the largest cargo airport in the world in terms of cargo traffic. It has helped in boosting the economy of China.
Mega Projects as Drivers of Change
Mega projects in the world have come to act as drivers of change in several aspects. Among the changes that are being served is development in many countries. In 2000, the governments of the world met at United Nations and endorsed Millennium Development goals. These goals entailed various aspects of development that needed to be attained before 2015. Mega projects are working in the right direction in order to actualize the achievement of these goals. In china, several infrastructural mega projects have been undertaken since this period. They have included construction of electricity powered railway lines, durable roads, high capacity airports and BRT systems that are currently gaining popularity among the Chinese population. Construction of BRT systems and high powered extensive railway lines has helped in reducing congestion in the country. China has a large population, and if effective measures are not taken, congestion will derail many viable operations (Dougan, 2008). There has been reduction of pollution in the major cities since the inception of these infrastructural mega projects. This has helped in increasing the life expectancy of many citizens due to the elimination of various toxic materials from the environment. Establishment of high capacity airports has changed the life styles of many individuals in the country. Many people can now afford to travel by air since it has become more affordable due to reduced fares resulting from economies of scale. It has also helped in boosting the prospects of both the export and import sector due to the existence of huge cargo transits.
Impacts of Mega Projects
Since the inception of mega projects in China, they have resulted to various impacts ranging from social, political, economic and institutional effects. On the economic aspect, there is an analysis of how mega projects have improved the trading aspects in the country. Under this category, it is prevalent to examine various projects like the construction of Hong Kong International Airport. The airport has improved the global trading prospects in China. This is because the country is known for its production and export prowess to various parts of the world. The airport has been recognized as the largest in the world in terms of its cargo transit capacity on a yearly basis. This has helped China to increase its exports to other countries without incurring exorbitant costs (Dougan, 2008). In the long-run, the prospect has seemed to boost the country’s balance of payment. It has been very crucial in the actualization of the current economic conditions. Establishment of these projects has also improved the economic prospects by creating employment opportunities. Individuals are being employed during the construction process, while others are deployed once the systems are completed in order to carry on with the expected activities. It has helped in improving the living standards and the general economic conditions (Altshuler & Luberoff, 2009).
On the political aspect, there have been improved relationships between governments that are working in collaboration during establishment of these projects. Some developing countries do not have the necessary manpower to undertake these types of projects on their own. This has created a need for them to outsource from the competent countries. China has played a very significant role in this aspect. The government has been able to establish favorable relationships with other countries hence boosting the prospects of its economic growth (Altshuler & Luberoff, 2009). Another political factor that has emanated from mega projects is that the government has increased tax revenues from the projects that are already in existence. There is creation of sufficient funds to enable development in areas that are lagging behind.
Institutional impacts can be observed through technological advancements in these projects. Once the projects have been developed, it leads to other innovations in order to keep up with the systems and bring about efficiency. Some of these innovations include electronic booking in the transport industry, something which helps in bringing efficiency. There is increased use of high yielding management software and systems such as TQM and ARP. This allows for profit maximization by optimizing network hubs through complex economic concepts (Reiber, 2012).
Social impacts on the other hand include, improved ways of how things are carried out. In the transport industry, there is reduced pollution and congestion. This helps in increasing the life expectancy and enhancing better living standards.
Success Factors of Mega Projects
There are a variety of success factors for mega projects that are being conducted. Among them is the willingness of the government or relevant authority in executing the projects. When the relevant authority is willing to see the project through, there is high possibility that the project will be executed in the best way possible and in a timely manner. If they are not willing, it leads to unnecessary delays that jeopardize the whole process.
Having clear cut objectives is another key ingredient for a mega project to prevail. This includes outlining what the project is required to attain for a given period. This will result in the establishment of a developmental plan that is directed towards attaining completion of the project in the best time possible. The project should also be in line with the needs of the people. If it is not in accordance to their needs, there is a high probability of rejection (Reiber, 2012).
Generic and Context-Specific Observations
From the literature review, there is a generic observation that mega projects are acting as drivers of change in china. This is because they are being used in order to achieve the Millennium Development Goals that were brought forward, in 2000. It is also apparent that willingness of relevant authority has helped in establishment of mega projects. Context-specific observations on the other hand highlight that Hong Kong International Airport has played a major role in enhancing international trade and creation of employment in the country (enguttuvan, 2006).
Case Study Analysis
The construction of HKIA took place between 1990 and 1998. Several stakeholders were involved in its construction. This included the government, Ports Authority of Hong Kong, four major sponsors and 225 contractors. The project cost over $20 billion. It entailed 10 separate projects with over 1,000 critical interfaces (Covil, 1998). The government and the ports authority were involved in the mobilization of the relevant resources for the project. This was a critical stage since it ensured that the project had the ability to commence. During the execution, the contractors worked in partnership since they were involved in a dependent working environment. Having numerous contractors ensured that work was efficiently allocated to individuals that had that specific prowess required in every task execution.
HKIA has turned out to be the main airport in Hong Kong. It has been in operation since 1998, when it replaced the former Kai Tak Airport. It is a major trans-shipment centre, gateway for destinations and passenger hub in China. HKIA is the largest air cargo airport in the world. In 2012, the airport recorded a trans-shipment of 4,062,261 metric tonnes of cargo (Lassale, 2013). The key driving force of developing the airport was to help the country improve its global operations. This objective has come to be a reality based on current operations. It has also boosted the economic activities in the country through employment opportunities that have been created in the airport. Increasing employment opportunity is vital for progress in any economy.
The table shows the % increase in the amount of cargo being transmitted through the airport
|Hong Kong International Airport||2011||2012||2013*|
|Air cargo Throughput (‘000 tones)||3,938||4,025||1,626|
|Year-on-year (YoY) growth (%)||-4.6||+2.2||+2.3|
|No. of passengers handled (million)||53.9||56.5||23.9|
|YoY growth (%)||+5.9||+4.8||+3.9|
Source: USA Airport Outlook 2013
The rational of choosing Hong Kong International Airport for the case study is its strategic location in the country and the potential it has in helping China realize its economic objectives. There are a variety of factors that influence the operations being conducted in Hong Kong International Airport. These factors might be unique or universal in both airports. For HKIA, the geographical position contributes significantly to its operational success. It is located at the Pearl River Delta region. Hong Kong is located strategically to serve the main land China and the rest of Asia. It is in a central position hence enjoys the flexibility of airline networks. The export business in Asia and specifically in China, is improving with every day. Future projections show that this region will increase its export prospects significantly in the near future. Based on HKIA strategic position, it is likely to enjoy more from the increased exports in Asia. Increase in the Asia population also results to increased importation in order to meet the demands of the growing population (McKinnon, 2012). HKIA becomes the most preferred airport by business personnel due to its reputation. Such aspects can explain why the airport has come to be the leading pack in the air cargo industry all over the world. China’s economic growth prospects unveil even a brighter future for this airport in terms of increased cargo transits.
The key themes revolve around why this mega project was undertaken. HKIA was constructed with the aim of attracting more air traffic in China. This included for both passengers and cargo. The airport has been able to meet this objective since there has been growth in air traffic over the years. In 2012, HKIA handled 4.06 million tonnes of cargo, 56.5 million passengers and 325,000 flight movements. There are plans of constructing a new run-way in the airport. Construction of this run-way is expected to increase the traffic levels significantly in the future. It is projected by 2030, the airport will be able to handle 607,000 flight movements, 102.3 million passengers and 8.9 million tonnes of cargo (Lassale, 2013). The project has also been able to meet other objectives like acting as a catalyst in economic development and improving the social welfare of the people involved.
Principle outcomes of the study revolve around examining HKIA as a driver of change. Among the change it has brought about are increased employment opportunities in the region. This range from the individuals that are involved in the management of the airport, those that work as pilots, courier services and other staff involved with various operations in the airport. Establishment of the airport has also changed the levels of the country’s balance of payment. It has been able to increase its exports to other countries with much efficiency and convenience. There is also facilitation of imports on products that are not directly manufactured in the country. HKIA has also increased the amount of revenue collected in Hong Kong through taxation since its inception. Profits generated by the airport seem to be increasing year in year out hence generating favorable revenue for the government through taxation, which is then invested in other areas (MobileReference, 2010).
Table shows how revenue generated from courier services is increasing (Hong Kong International Airport)
|International Courier Services
|YoY % growth||+7.7%||+9.4%||-7.8%||+35.6%||+12.7%|
Source: USA Airport Outlook 2013
Contextual forces involved in the case study can be used in verifying the consistency of the case with the literature review above. From the literature review, it is apparent that mega projects tend to act as drivers of change in various ways. Hong Kong International Airport has been able to meet the requirement since it has influenced the number of people using air transport. There is an expectation that the number will continue to rise as a third run-way is constructed within the airport. It has also helped the country in moving in the direction of attaining its Millennium Development Goals. This is by creating efficiency in the exports and imports sector (McKinnon, 2012).
On the political aspect, HKIA is generating more revenues to the government through taxation of its profits. As the traffic in the airport increases, profits tend to increase thereby increasing government revenues. These funds are being used in other developmental projects in the region.
Technological advancements in the airport have received a high priority too. Currently there is use of ARP systems that help in bringing along efficiency. There is a favorable platform for enhancing efficient booking of flights, book keeping and control of flights in the airport. This is necessary due to the huge number of activities that the airport is involved with.
In conclusion, it is apparent that mega projects are significant drivers of change. HKIA has been able to meet the objectives that were stipulated during its construction period. It has helped in improving the economic conditions of the relevant region by enhancing globalization and creation of employment opportunities. This has acted as a benchmark for improved living standards which is a vital aspect for economic development to prevail (McKinnon, 2012). Another change aspect that it has brought about is attracting more individuals to use air transport. This has helped in reducing congestion and pollution in other transport systems. With the construction of a third run-way, there is a projected increase of traffic in this airport. This will boost in surpassing the positive benchmark that has already been established.
Lassale, J. (2013). Airport and Global Infrastructure. USA Airport Outlook 2013,8(4), 39.
McKinnon, A. (2012). Challenges, Opportunities and Global Competitiveness. The Air Cargo Industry In Hong Kong, 3(7), 28