McKinsey: Airport funds risk misallocation

China risks misallocating investment in its US$70 billion plan to expand airport capacity by 2013 by overspending on airport projects in western provinces while neglecting some fast-growing coastal provinces, the Financial Times reported, citing a recent study by McKinsey, a consultancy. The study found that of the 97 greenfield airport projects planned until 2020, only 20-30 are “attractive” investment opportunities in that they will address expected capacity shortfalls. Other projects are seen as driven by government policies to develop in central and western China rather than by demand. McKinsey cited Shandong, a northeastern province close to South Korea, as an area where the planned capacity will fall short of expected demand.