Heathrow economic analysis ‘seriously flawed’

15.2.2008   (Financial Times0

Opponents of plans to build a third runway at Heathrow airport have claimed that
the government had based its support for the project on &lquot;seriously flawed&rquot; economic analysis.   A report published by CE Delft, the Dutch consultants, cast doubts
on the government estimates that expansion would bring economic benefits totalling
£5bn ($9.8bn).

The report, commissioned by Hacan, the leading lobbying group opposed to further growth of the airport, attacked much of the economic analysis previously conducted by Oxford Economic Forecasting in  2 reports commissioned by the aviation industry.

The OEF reports have been widely used by the government to demonstrate the wider
economic benefits derived from the growth of aviation.

The CE Delft study said that OEF had significantly overestimated the suppressed
business demand that would be released by expansion at Heathrow.  It also found
that if it did not expand, people would spend their money elsewhere, with the
result that other sectors of the economy would grow.

Steve Norris, the former Conservative transport minister and candidate for mayor
of London, said on Thursday the government was pushing ahead with plans for a
third runway &lquot;without really understanding what that means for the economy …
We are often told that a third runway is essential for the capital’s economy.
But this report shows those benefits have been overstated by the government and
the aviation lobby.

&lquot;How can we compare the cost of valid alternatives, such as high-speed rail,
if we are overestimating the value of more runways?&rquot;

The battle over the future growth of Heathrow is intensifying, as the government
is due to complete a three-month public consultation into plans for the greater
use of the two runways, and for the building of a third runway and sixth terminal.

Lord Soley, director of the Future Heathrow campaign, said it was &lquot;ridiculous
to pretend Heathrow isn’t important to business.   Businesses themselves say Heathrow’s
expansion is vital to their future, and every other piece of research supports
the view that international air links are crucial to the UK economy&rquot;.

Heathrow economic analysis ‘seriously flawed’