Times reports that Heathrow plans to offer to cut costs and build runway scheme faster
The Times reports that it has learned how Heathrow is planning to cut up to £3 billion (out of about £17.6 billion) from its plans for a 3rd runway, in order to persuade Theresa May and the Cabinet that the runway could be delivered – and delivered a year earlier. Revised plans include potentially scrapping plans to tunnel the M25 under the 3rd runway, not building a transit system to carry passengers around the airport (using buses instead) and smaller terminal buildings. The aim is not only to get the runway working by 2024 but also -with reduced costs – keeping charges for passengers a bit lower. The Airports Commission estimated the cost per passenger would need to rise from £20 now to £29. Airlines like British Airways are not prepared to pay such high costs, and especially not before the runway opens. BA’s Willie Walsh has described Heathrow’s runway plans as “gold-plated”. The Times expects that Heathrow will announce its new “cheaper, faster” plans by the end of September. There is no mention of the “Heathrow Hub” option of extending the northern runway – a slightly cheaper scheme than the airport’s preferred new north west runway. There is no clarity on quite what Heathrow plans for the M25, if they cannot afford to tunnel all 14 lanes (at least £ 5 billion). Lord Deighton said it might be “diverted” or have “some form of bridge.”
.
Tweet
Heathrow offers £3bn cost cut in bid to secure third runway
By Graeme Paton, Transport Correspondent (The Times)
September 10 2016,
…….
In a significant change, the airport is considering scrapping plans to place a 14-lane section of the M25 into a 600-metre tunnel under the new runway.
[Lord Deighton] said the current tunnelling proposal was “quite expensive and takes some time, so we are looking at other ways of getting to that solution”, including diverting it around the airport or possibly even some form of bridge.
……
Full story at the Times (£)
.
See earlier:
(The Heathrow offer to cut its costs does nothing to reduce the other massive costs to the country – even creating some sort of fudge with the M25)
Access to expanded Heathrow could cost £20 billion, TfL warns – maybe £15 billion more from the taxpayer than Commission estimate
Transport for London (TfL) has raised “serious concerns” about congestion and the costs of expansion at Heathrow just weeks before the Airports Commission’s final recommendation is due (end of June?). TFL Response to APPG on Surface Access Feb 2015 In response to questions by Zac Goldsmith, TfL said both Heathrow and Commission had “significantly underestimated” the challenge of improving transport access to the site, with the Airports Commission estimating £5 billion would be enough to make the improvements. TfL believes to provide an optimal level of service, the figure would be nearer to £20 billion, raising questions about who would pay the additional costs. TfL said population growth of 37% by 2050 has also not been taken into account, with regards to the increased pressure on London’s roads and public transport infrastructure, Zac said: “TfL is better placed than any other organisation to understand the effects Heathrow expansion will have on London’s transport network, and it is extraordinary therefore that the Commission never bothered to ask for its assessment. This raises serious questions about the thoroughness and reliability of the Commission’s work. If TfL is right, the taxpayer may end up having to cough up an additional £15 billion to help Heathrow secure its monopoly, in addition to all the associated problems of gridlock, noise and air pollution.”
Full story at
Heathrow boss rules out footing the £5 billion bill for road and rail works – wants taxpayer to pay
The Airports Commission left the matter of who would pay for the approximately £5 billion needed to tunnel a section of the M25, and other surface access improvements, vague. The assumption has been made that the taxpayer would have to fund this, though the Airports Commission suggested that Heathrow would be able to find the funding from its investors for this. Now the CEO of Heathrow has dismissed the suggestion that the airport foots the £5 billion bill for road and rail work if a 3rd runway is built. Huge motorway engineering would be needed, to have the runway going over the motorway. John Holland-Kaye has ruled out paying for the surface access work. Though the government funds road and rail improvements under normal circumstances, tunnelling the M25 and dealing with hugely increased road traffic using an airport 50% larger than at present are not normal circumstances. Especially in times of huge economic savings being necessary in public finances. The Commission’s final report said it considered the runway was commercially viable “without a requirement for direct government support. This remains the case even in a situation where the airport is required to fund 100% of the surface access costs.” This would be by Heathrow “raising both debt and equity finance. This finance is then serviced through subsequent revenues and refinancing by the airport operator.”
Full story at
.
Airports Commission Final Report – 1st July 2015
Willie Walsh threatens to move BA to develop base in Dublin or Madrid to avoid paying for “gold plated” runway plans
Willie Walsh, CEO of British Airways’ parent company, IAG, has said BA might give up on Heathrow and move overseas, if Heathrow got a new “gold plated” runway and doubled its charges to airlines. He said BA could “develop our business” in Dublin or Madrid rather than pay for the expansion of Heathrow. The current landing charge of about £40 for a return trip would increase to at least £80 with the runway. That might deter passengers. “We won’t pay for it and we most certainly won’t pre-fund the construction of any new infrastructure.” Mr Walsh said that the £17.6 billion plan to expand Heathrow represented an attempt by a “monopoly airport” to build “gold-plated facilities and fleece its airlines and their customers”. Only about 1% of the estimated cost is for the runway itself. He indicated that Heathrow remained his preferred option for a runway, but not if it cost of £17.6 billion.” …“Heathrow is not IAG’s only hub. We can develop our business via Madrid, which has spare capacity, and Dublin, where there are plans for a cost-effective and efficient second runway.” Patrick McLoughlin, the transport secretary, was studiously neutral, saying that Gatwick and Heathrow both remained runway options. Mr Walsh also opposes a runway at Gatwick, as “no one would move there while Heathrow remains open.”
Full story at