China to spend $17b on airports by 2010: report
(Reuters)
Updated: 2006-03-01 14:56

China aims to spend 140 billion yuan ($17.4 billion) to expand its airport infrastructure over the next five years to meet robust air traffic demand, state media said on Wednesday.

Beijing plans to build 44 airports by 2010 and upgrade existing facilities, especially in major cities, the Shanghai Securities News said.

That will bring the number of airports in China to 186 by 2010, when Shanghai hosts the World Expo and two years after the Beijing Olympics.

The blueprint comes amid feverish expansion by Chinese airlines, which have been adding planes to meet passenger and cargo traffic that is expected to grow by 14 percent annually till 2010.

The newspaper said China's carriers are expected to have 1,580 aircraft by 2010, up from 863 now, putting more pressure on existing facilities.

Beijing started opening its aviation infrastructure sector three years ago to foreign and domestic money as it hunted investment and expertise to propel an industry overhaul.

Few foreigners had previously bothered to invest in Chinese airports, which are notorious for their inefficiency.

But German airport operator Fraport A.G. (FRAG.DE) has initially agreed to take a quarter of Ningbo airport in east China and is eyeing bigger stakes in other potential targets, including Xian Xianyang airport in the north.

Airport officials said in June Singapore's Changi airport had signed an initial agreement to spend up to 1.6 billion yuan for as much as 45 percent of eastern Nanjing airport.

And in April Hong Kong's airport, Asia's second-busiest, spent $240 million on a 35 percent stake in Hangzhou airport, also in Zhejiang province and a two-hour drive west of Ningbo.

Those investments followed the 20 percent stake that Denmark's Copenhagen Airports A/S in 2002 took in Meilan International Airport Co. Ltd., which operates the main airport on Hainan, a southern Chinese resort island.

($1=8.0402 yuan)