Hong Kong halts HK$4.6 billion air mail centre plan amid geopolitical tensions

Hong Kong has halted a HK$4.6 billion (US$592 million) redevelopment plan for an air mail centre designed to turn the city into a postal and logistics hub, after authorities cited a 67 per cent reduction in postage volume over five years due to geopolitical tensions.

The project cancellation is the second this month by the government after it earlier shelved a HK$700 million exhibition hall in Wan Chai to showcase major development projects, including the Northern Metropolis, amid a burgeoning deficit.

In a paper to the Legislative Council on Friday, the Commerce and Economic Development Bureau said it was no longer cost-effective to redevelop the centre at the airport as the latest projected air mail volume at the site would drop by almost 70 per cent from its original forecast.

The elimination of the duty-free policy for small parcels delivered through the postal channel had further exacerbated geopolitical risks and added uncertainty to the global economy, it said.

“The unprecedented challenges facing the global economic environment have also dealt a blow to the business prospects of Hongkong Post,” the bureau said.

It added the escalating geopolitics, including the Russia-Ukraine war, had severely impacted the city’s e-commerce, resulting in a drop of 67 per cent in mail volume handled by the centre, from 36,900 tonnes in 2019-20 to 12,000 tonnes in 2024-25.