Suvarnabhumi Airport Development Case study foreign airport s ORAT

Suvarnabhumi Airport Development Case study foreign airport’s ORAT ( ORAT. Il. I ) June. 4, 2004 KOICA(NESDB)

Review of ORAT ‘s failure case - HK’s airport was open on 6 July 1998 - Some 22 problems began to emerge either on or shortly after opening date * Air cargo handling chaos lasted for more than one month * Cargo handling : back to the old airport , re-use the old system and imposed a nine-day moratorium

Review of HK’s airport ORAT - PROBLEMS encountered on airport opening date 22 problems emerged as follows (1) Air Cargo Facilities (main problem; computer sys. ) (2) Flight Information Display System (FIDS) (3) Access Control System (ACS) (4) Baggage Handling System (BHS) (5) Aircraft Parking Aids (6) Air-bridges (7) Delay in flight departure and arrival (8) Baggage Handling by Ramp Handlers (9) Missing TARMAC Buses (10) Parking of planes

- PROBLEMS encountered on HK’s airport opening date 22 problems emerged as follows(continued) (11) Water Supply (12) Air Conditioning (13) Public telephones (14) Mobile phone networks (15) Mobile Radio (16) Escalators (17) Direction Signs (18) Slippery floor (19) Water, Power and Staff resources at restaurant (20) Automated People Mover (21) Bus Passenger drop off at PTB Level 3 (22) Cleanliness and refuse collection

Review of HK’s airport ORAT - Main PROBLEMS are related to SYSTEMs (1) Air Cargo Facilities (major problem; computer sys. ) (2) Flight Information Display System (FIDS) (3) Access Control System (ACS) (4) Baggage Handling System (BHS) (5) Aircraft Parking Aids (6) Air-bridges F (7) Delay in flight departure and arrival I (8) Baggage Handling by Ramp Handlers (9) Missing TARMAC Buses S (10) Parking of planes H System

- Minor PROBLEMS are mainly FACILITY as follows; (11) Water Supply (12) Air Conditioning (13) Public telephones (14) Mobile phone networks (15) Mobile Radio (16) Escalators (17) Direction Signs (18) Slippery floor (19) Water, Power and Staff resources at restaurant (20) Automated People Mover (21) Bus Passenger drop related. PTB Level 3 - All the facility- off at problems have (22) Cleanliness and refuse collection shortly been successfully dealt with after Airport Opening Date Facility

Review of HK airport ORAT’s main problems - PROBLEMS encountered on airport opening date 22 problems emerged as follows (1) Air Cargo Facilities (2) Flight Information Display System (3) Access Control System (4) Baggage Handling System (5) Aircraft Parking Aids (6) Air-bridges (7) Delay in flight departure and arrival (8) Baggage Handling by Ramp Handlers (9) Missing TARMAC Buses (10) Parking of planes

Review of HK’s major ORAT problems - Resulted in a loss in income of around HK$ 4. 6 billion, equivalent to 0. 35% of GDP for Hong- Kong economy - Currency Exchange Rate in July 1998 1 USD= 7. 661 HK$= 41. 60 Baht HK$ 4. 6 billion ( 600 million USD = 25 billion Baht)

1 -1. Cargo Problems - Hundreds of trucks have been stalled at Hk’s airport cargo terminal because new cargo computer system was deleting shipment record (Computer Bugs) - Goods were being trucked 30 km to Kai-Tak airport to re-use the previous computer system - Aircraft are no longer able to land at the old airport, which switched off its lights -Hong Kong Air Cargo Terminals Ltd (HACTL) announced a four-phase recovery PLAN on July 16 th, 1998

1 -2. Cargo Problems # phase 1 : from July 19 th 1998, recovering 50% of the projected daily tonnage. # Phase 2 : by end of July 1998, recovering 75% of daily tonnage. # phase 3 : from mid-August 1998, recovering 100% of both imports and exports at 2 airports. # phase 4 : by the end of August 1998, 100% cargo operation at the new airport. - Hong Kong government had full confidence on HACTL’s performance because HACTL had a proud record of success for over 20 years. As a result,

1 -3. Cargo Problems government did not closely monitor the lack of progress and the performance of HACTL. - HACTL had no concrete contingency plans for serious breakdown. HK’s Government underestimated repercussions arising from a breakdown of cargo handling service on airport opening date. - The 20 factors had interacted with each other in causing the problems. These are Computer bugs, massive variation of flight schedule, dust contamination, dolly quantity, interface FIDS & FDDS and etc.

2 -1. FIDS Problems - The BREAKDOWN & MALFUNCTIONS “Blank FIDS monitors and inoperable LCD displays” * FIDS( Flight Information Display System) “Missing and incorrect FIDS information” “Gate change announcements not displayed on FIDS monitors” - SYSTEM DEVELOPMENT PROBLEMS The Project Division of HK Airport Authority(Similar to NBIA) is the main point of FIDS contract. Staff of Management Division(like AOT) who were the end user of FIDS, only began their direct involvement in the FIDS project several months before airport opening.

2 -2. FIDS Problems - 14 months were taken for redesign & rewriting the specification to be finalized and agreed upon between Authority and Contractor. Number of Scope changes from 36% to 84% ( Over 900 changes in specification). * Contract Period : June 1995 ~ June 1998(3 years) - COMMISSIONING PROBLEMS The HK Airport Authority(AA) had assured the AA Board and ADSCOM(Airport Development Steering Committee) that FIDS was stable and ready for use on opening date and that the reliability was 98. 7% available. However FIDS had been down for 9% of the time during the continuous test run.

2 -3. FIDS Problems - The compression of the training program for FIDS from 6 weeks to 2 weeks. - State of Readiness of the Main Terminal Building * The physical condition of the MTB was far from being ready: considerable amounts of water and dust were found while air-conditioning & power supply were not available. Resulting in the need for replacement of some 400 monitors , Furthermore, 15~ 20 display monitors damaged by leaking pipes and fire incident.

3. Security Problems - Malfunction of the Access Control System(ACS) resulting in blockages and delays for both departing and arriving aircrafts. * Access control is a legal security requirement and if there is no system available, airport operations would essentially have to cease. - Until late Nov. 1998, the ACS is still not fully functional and some doors are still manned by security staff. - Identification Cards could not issued on time and decision making to use Chinese character took several months.

4. Ramp Handling Problems - Insufficient supply of dollies - Lack of information in relation to aircraft, including flight arrival and departure details and the respective parking bay - Confusion of the relevant cargo terminals to which cargo should be delivered - Misdelivery of baggage to cargo terminals and vice versa - Inability to deliver perishable cargo to relevant cargo terminal expeditiously - Delay in disembarkation of arriving passengers - Mishandling or delay of incoming, transfer and outgoing baggage.

5. Baggage Handling System Problems - The state-of -the -art baggage handling system continued to be the focus of complaints as suitcases were mis-directed in the massive terminal. - Some bags(max. 2, 000 at the first opening day) remained to be cleared. People spent the night on the floor of the customs area, refusing to leave after their baggage was lost inside terminal. - The computer bugs also disrupted baggage collection.

6 -1. Other Problems AIR- BRIDGE PROBLEM Technical problems with 4 air-bridges cause many passenger to be stuck inside planes for several hours and to board the planes by old steps truck

6 -2. Other Problems Substandard public facilities and composite problems - Problems with electricity and water supplies plagued the main terminal building. - Delay in flight departure and arrival * information boards were blank and aircraft gate assignments tangled. * missing the connection flight - Passengers complained a lack of signage - The guidance system(VDGS)which tells a pilot when to stop is faulty. * Cathay Pacific 747 hit airbridge after failing to stop in time.

Internal Problems ORGANIZATIONAL PROBLEM - There were internal organizational problems with in AA. It is almost common knowledge the working relationship between Project Division (PD) and AMD(Airport Management Division) is something more than what can be competition and internal rivalry. CORRUPTION SCANDAL - Several investigations have been underway into chaotic opening by the Legislative Inquiry Council and etc. - ICAC(Independent Commission Against Corruption) has charged many people * relation with bribes, falsifying documents and etc.

Review of HK’s airport opening date MAKING OF AIRPORT OPENING DATE DECISION - Original plan: June 1997 OPENING (approx. 7 - year project) * Airport Authority (AA)founded on April 1990 planned - Revision 1 : April 1998 OPENING ( 8 - year project) * Hong Kong Government announced on June 1995 - Final Decision: July 1998 OPENING ( 8 - year project) * ADSCOM(Airport Development Steering Committee) announced it on Jan. 1998, 6 months before Airport opening. It will be irreversible, once announced

Review of HK’s major organizations - ADSCOM (Airport Development Steering Committee) - Composed of eight senior Government officials who were mostly Bureau Secretaries - For significant policy issues, final and collective decisions are taken by ADSCOM (include airport opening date decision) - To review the general progress and budge. * Similar to Suvarnabhumi Airport Development Committee - AA (Airport Authority) - Responsible for providing, developing, operating and maintaining HK’s new airport. - AA Board shall consist of 8~15 members. * Similar to NBIA & AOT

Review of HK’s major organizations - CAD (Civil Aviation Department) - The provision of air traffic control, flight information, air alerting service and air/sea search and rescue for all aircrafts operating within the airspace. - The issue of Aerodrome License to the AA. * Similar to Aero. THAI (Aeronautical Radio of Thailand) - NAPCO (New Airport Project Co-ordination Office) - To co-ordinate the 10 core ACP projects - ACC (Airport Consultative Committee) - a consultative body to the Government with no executive function - Others - Some Government Bureau and Departments(Customs. . )

Relationship among organizations - No good relationship & no credibility - ADSCOM did raise concerns on ORAT and opening date, and wrote to the AA Board to express progress delay and system integration. - AA Board replied and concluded that the Airport could be ready to open for safe, smooth and efficient operation on the last week of April 1998. - NAPCO assessed that the continued systems delays and operational problems represented real risk to smooth airport operation. - ADSCOM continued to make their decision without waiting for the final recommendation from the AA, to open 6 July 1998, being a Monday when air traffic be lighter.

Relationship among organizations - No good relationship & no credibility (continued) - AA Board kept assuring the ADSCOM that they were making good progress and should be ready for Opening Date. And two papers were submitted by the AA Management to provide ADSCOM for confirmation. - NAPCO report to ADSCOM that there were ample indications that the new airport was not ready for opening - ADSCOM had repeatedly expressed dissatisfaction over AA’s delays and slippage - It was the question that the AA deliberately lied to ADSCOM. - The snowball effects on the above matters created serious confusion and chaos on the airport operation

Review of ORAT ‘s successful case Incheon International Airport’s successful factors MANPOWER ENTIIES GOV’T Airline GSE IIAC volunteer etc. Total Manpower 1, 238 1, 825 828 4, 509 24, 268 2, 354 35, 022 IIAC: Incheon International for almost 1. IIAC carried out ORATAirport Corp. 9 Months EQUIPMENT & MATERIAL 2. IIAC has good relationship with other entities and 구분 구분 구분 Part Airplane GSE Baggage Note internal organizations as well( not munch conflict Equip & Matl Project division 200 Operational division). 9 48, 191 between and 3. IIAC prepared contingency plan and reviewed lessons learned from other airport ‘s trial operation

Review of SA’s ORAT 1. MOT should review total progress(NBIA Project & Aero. THAI, etc)and finally confirm Airport Opening Date 2. MOT should get NBIA fully involved in ORAT activities and harmonize it with AOT 3. The merger team (AOT & NBIA) should work with other entities. ENTITY GOV’T Airline GSE Manpower 1, 200 1, 800 Merger volunteer 4, 500 24, 400 etc. Total 2, 300 35, 000

Conclusion and Recommendation - All inter-organizational activities should be conducted with maximum transparency, openness and credibility to avoid misleading and inadequate communication. - Even if the AIRPORT OPENING DATE (AOD) had been announced, it should inevitably be subjected to one time postponement in the light of actual progress. - Intensive checks for major systems ; Critical system for Safety , Security & Efficiency should be checked first of all, by related Thai government and foreign experts.

Conclusion and Recommendation - SAFETY , SECURITY & EFFICIENCY Safety ( Air Traffic Control Tower and Radar system etc. ) System should be completed on time to obtain the Aerodrome License and maximum safety. Security ( Airport Access Control System & Baggage Screening System) System is a legal requirement and if there is no system available, airport operations would have to cease. Efficiency ( Flight Information Display System, Baggage Handling System) Systems is essence for operational service

Conclusion and Recommendation - Most of the problems, with the exception of that in regard to the SYSTEMS, can be successfully dealt within 2 months after Airport Opening Date * 88% of airport users were satisfied with the services and facilities at HKIA according to an opinion survey in Sep. 1998. - All contingency plans should be regularly reviewed, updated and promulgated. - Close monitoring should be given to private investor’s Projects and over-confidence for their performances.