Singapore's decision to halt construction of Changi Airport's Terminal 5 for at least two years, and to review its scale and design, makes eminent sense in the light of the coronavirus pandemic. Given the way in which the Covid-19 outbreak has changed the rules of the aviation game for the immediate future, it is essential to ensure that what was a necessity in pre-Covid times does not end up becoming a liability now. A two-year pause will provide time to reassess the viability of Changi T5 as it is envisaged presently. The terminal was designed to be modular so its construction could be scaled up or down as necessary. But given the severity of the economic downturn stemming from the pandemic, to say nothing of the disruption caused by it already, existing planning parameters and timelines need to be revised.
The T5 project, scheduled to be completed in the 2030s, was earmarked to provide future capacity for the airport to ride on the projected growth in air travel. Those projections need to be revisited. True, T5 could have acted as a pump-priming measure during this downturn. However, it would have fallen within the parameters of large infrastructure projects such as Changi East whose cost would have been funded partly through borrowing. T5 is a part of the Changi East development that also includes other aviation-related facilities. The underlying principle is sound. Meeting large and lumpy expenditure, whose benefits will span generations, through some borrowing is a fair and efficient way of allocating resources. Singaporeans today would otherwise have to shoulder a disproportionate part of the burden. But any investment has to be justified on the basis of expected returns. These dire times necessitate a recalculation of expectations. At the very least, the cost of interest on borrowings would have to be factored into any new decision.
The next two years will offer time to recalibrate that calculus of cost. All this does not mean that Singapore is abandoning large infrastructure projects that will be handed down to the next generation. That transmission constitutes one way for today's Singaporeans to bequeath to successor generations a higher starting base, just as their predecessors did to them. The industrial development of Jurong is a case in point.
In that spirit, Singapore will press on with building the connectivity infrastructure necessary to reinforce its position as a hub for business, finance, trade and data flows. Hence, long-term plans remain sound for projects such as Changi T5, the Tuas Mega Port and submarine cable hubs, as well as for regional developments such as the Punggol Digital District, Jurong Lake District, Sungei Kadut Eco-District and the Greater Southern Waterfront. However, timelines for these projects will need to be paced to reflect demand. T5 is part of that pacing.