The Hong Kong Airport Authority (AA) won approval from the central government on Wednesday to take a strong foothold on the Chinese mainland by jointly managing Zhuhai Airport with local government for a period of 20 years.

It’s the first time China has permitted overseas personnel to participate in the management of an airport on the Chinese mainland.

The agreement between the State-owned Assets Supervision and Administration Commission of Zhuhai city and the AA to jointly operate Zhuhai Airport was announced by the Hong Kong/Guangdong Cooperation Joint Conference held in the province’s capital of Guangzhou. 

The AA will establish a new joint venture to be known as the Zhuhai-Hong Kong Airport Management Company Ltd. to manage and operate the Zhuhai Airport for 20 years, according to an AA press release.

The joint venture with a registered capital of 360 million yuan (US$45 million) will pay a franchise fee for the exclusive operational rights, said the release. But it did not reveal what the franchise payment was.

According to the agreement the AA holds the joint venture's 55 percent stake which it acquired for 198 million yuan (US$24.75 million) through its wholly owned subsidiary HKIA (China) Ltd.

The joint venture's remaining shares will be held by the State-owned Assets Supervision and Administration Commission of Zhuhai city government through an injection of 162 million yuan (US$20.25 million) from its wholly owned company Zhuhai Headway Transportation Investment Co. Ltd.

The joint venture's two parent companies will discuss the timing and details of share acquisition for the project, said the press release.

The joint venture's management will be based on the existing team and working closely with them will expand Zhuhai Airport's domestic network, strengthen and diversify its air services, improve the airport's accessibility and maximize the synergy between the Zhuhai and Hong Kong airports.

Deng Weilong, Secretary of Zhuhai city committee of the Communist Party of China (CPC), said the deal was of profound significance. He said the cooperation between the two airports, the soon-to-be-built Hong Kong-Zhuhai-Macao Bridge and other infrastructure projects in Zhuhai would accelerate the development of the western Pearl River Delta.

Victor Fung Kwok-king, AA Chairman, said the cooperation between HKIA and Pearl River Delta airports showcased Hong Kong's ability to work with the Chinese mainland to achieve much. 

Zhuhai Airport is located in Zhuhai Special Economic Zone in the western Pearl River Delta where growth potential abounds. Zhuhai's gross domestic product grew at a compound annual average rate of 13.4 percent between 2001 and 2004.  

(Xinhua News Agency August 3, 2006)