The government said on Friday it has terminated plans to redevelop the Air Mail Centre in Chek Lap Kok, citing challenging prospects for Hongkong Post due to a variety of factors.

Four years ago, lawmakers approved more than HK$4.6 billion for the project, which was meant to be completed two years from now.

But in documents submitted to the legislature, officials said the centre was handling 12,000 tonnes of mail in the past financial year, less than a third of that in the 2019-20 fiscal year.

The Commerce and Economic Development Bureau said the blow to the global economy dealt by the Covid pandemic and geopolitical tensions since such developments as the war in Ukraine had made things worse.

"The tariff and trade war initiated by the government of the United States since the outset of 2025, eliminating the duty-free policy for small parcels delivered through [the] postal channel, has further exacerbated geopolitical risks, sending the global economy [into] significant uncertainty," it said in the document.

The bureau had projected that the new facility would have handled up to 146,000 tonnes of mail in 2040, but the projection has now been lowered to just 35,000 tonnes.

It therefore decided to scrap the redevelopment plans after careful and comprehensive considerations, saying it was instead studying more cost-effective alternatives, such as refurbishing the existing facility and keeping nearby temporary structures that are already in use.