Rival scheme, Heathrow Hub, estimate true costs of Heathrow runway could be £61 billion, by 2050 (not £14 bn)
Date added: 19 September, 2019
The rival scheme, to try to build a 3rd Heathrow runway – Heathrow Hub – have put together figures indicating the final cost of Heathrow’s 3rd Runway Plan could be £61 billion by 2050. That is in contrast to the £14 billion claimed by Heathrow itself and even the £32 billion assed by IAG. Heathrow Hub say the cost of the initial phase, included in Heathrow’s current consultation, could be as much as £37.7 billion, when it is supposedly completed in 2026. The figure of £14 billion is based on 2014 prices, 5 year out of date, and assumes a pared down scheme with no new terminal capacity. Heathrow’s current consultation shows a completely different scheme, which would cost far more. There is no clarity on how Heathrow would bridge the M25 (12 lanes wide at that point) and what it would cost. Over 5 years, there are now higher costs from inflation and higher land acquisition and relocation costs. Heathrow Hub say Boris Johnson and Grant Shapps should announce a review of the project. They want the CAA to make Heathrow provide proper figures on costs. The CAA disclosed pre-planning application spending by the Airport has tripled to £2.9bn. The Hub’s scheme would, of course, also cost more than they estimate now …
Heathrow urged to ‘come clean’ on third runway costs
Heathrow Hub, promoter of a cheaper rival extended-runway scheme, says its analysis of Heathrow’s published costs could be as high as £61 billion by 2050.
The cost of the initial phase, included in Heathrow’s current consultation, could be as much as £37.7 billion when it is due to be completed in 2026.
Heathrow and the Department for Transport both use the figure of £14 billion in describing the cost of the third runway plan.
But Heathrow Hub asserts that this uses 2014 prices and assumes a pared down scheme with no new terminal capacity.
The “ballooning” costs include the expense and complexity of building the new runway on a raised viaduct over a diverted M25 motorway by a junction with the M4 as well as inflation and increased land acquisition and relocation costs.
The analysis by Heathrow Hub has been submitted to the Civil Aviation Authority, demanding Heathrow “comes clean” about its costs.
A first phase of the Heathrow Hub extended runway scheme could be operational before the third runway for a cost of £4.7 billion, its backers believe.
A spokesman said: “The idea the third runway will cost only £14 billion is hopelessly out of date and inaccurate. On a like-for-like basis we estimate it is nearly £38 billion.
“Heathrow airport should come clean on the true costs of its complicated, environmentally damaging scheme and not be allowed to hide them any longer.
“The CAA should force it to produce an up-to-date detailed estimate and instead of giving conflicting signals about the third runway while fighting for it in the courts, the prime minister Boris Johnson and secretary of state for transport Grant Shapps should announce a proper review.
“Heathrow airport seems to have joined the list of infrastructure providers who win approval by producing ludicrously low cost estimates which get revised up later. Given Heathrow’s high levels of debt, questions need answering on how the third runway is going to be paid for.”
British Airways owner IAG has already expressed concern over Heathrow’s costs after the CAA disclosed pre-planning application spending by the Airport has tripled to £2.9 billion.
IAG has said the third runway could cause passenger charges, which are already the highest in the world, to double to more than £40 each.
A Heathrow spokesperson said: “Heathrow Hub’s cost calculations do not represent our project and would never be accepted by our airlines or the CAA.
“The total cost for developing Heathrow out to 2050 is exactly the same as what we submitted to the Airports Commission.
“The CAA will review our initial business plan at the end of the year as part of the regulatory process, providing further confidence that Heathrow expansion will be delivered within the affordability envelop set by government.”
Heathrow Airport’s Consultation on its 3rd runway is deluded and reveals an immature scheme which keeps changing
Sep 17, 2019
By Heathrow Hub (the rival attempting to build a 3rd runway, by extending the current northern runway)
Heathrow Airport Ltd (HAL) reveals that its North West Runway (NWR) scheme will extend far beyond the boundary designated by the Airports National Policy Statement (ANPS), increasing costs, impacts on people, property and delivery risk
Boundary expansion will result in what could be the greatest ever single loss of green belt land
Continued absence of an airport safety case, even at this late stage
Worse respite as new communities are brought into the noise footprint
Boris Johnson and Grant Shapps should announce a review
Heathrow Airport Ltd’s (HAL) consultation on its plans for a 3rd runway reveals an immature and deeply flawed scheme that raises more questions than answers, according to Heathrow Hub, the independent promoters of the cheaper rival extended-runway scheme.
Heathrow Hub’s response to HAL’s statutory consultation found that plans for the North West Runway (NWR) extend far beyond the agreed red line boundary in the designated ANPS. HAL’s assumption it can land grab beyond the boundary does not consider the fact it will need separate Development Consent Orders (DCOSs) as well as planning applications and other consents for the extra land, nor does it comply with the ANPS, approved by Parliament, which relied on the initial red line boundary as accurately representing the extent of HAL’s scheme.
Heathrow Hub has repeatedly warned of the threat of major construction beyond the red line boundary, citing the inability of HAL to accommodate displaced commercial property and infrastructure within the boundary. Increased land grab and construction costs will only add to the spiralling costs of the NWR project as well as increased risk to the delivery of the scheme.
Of grave concern for local businesses, residents and the wider community should be the fact that the increased scope of the construction plans leaves those homes and commercial premises outside of the red line boundary at risk of being unable to claim compensation for blight as well as the additional concern over noise and pollution levels. Furthermore, HAL’s consultation discloses what could be the greatest ever single loss of green belt land.
Heathrow Hub continues to note the lack of a safety case for the NWR. It is our assertion that once a safety case is completed it will show reduced capacity of the NWR scheme and will likely have a significant impact on noise and respite, given the questionable deliverability of HAL’s proposed runway alternation. The NWR will bring more communities into the noise footprint, while for existing communities the limited distance between the proposed NWR and the existing northern runway will result in noise contours overlapping to a significant degree, effectively resulting in no respite.
Finally, the cost of the NWR continues to spiral out of control partly as a result of the increased scope of the project including additional infrastructure and land acquisition and the difficulty of moving the M25 to accommodate the new runway. In the absence of any up-to-date cost estimate from HAL, Heathrow Hub estimates the total cost of the project will be £61bn with the first phase costing as much as £37.7bn.
A spokesman for Heathrow Hub commented: “The immaturity of the NWR scheme design, over seven years since work started on this incredibly important national infrastructure project, is incomprehensible.
“Not only does the latest consultation show a plan that is materially different from the ANPS, approved by Parliament, it reveals untenable noise and pollution levels for local communities, an assault on the green belt and spiralling costs that will have to be passed on to consumers.
“We call yet again on the Prime Minister Boris Johnson and the Secretary of State for Transport, Grant Shapps, to announce a proper review of expansion at Heathrow and to consider our cheaper, greener, quieter and simpler scheme.”
Heathrow Hub is currently in the process of appealing a decision by the High Court to refuse to quash the Airports National Policy Statement and the Court of Appeal hearing is scheduled for October.
Press release from Heathrow Hub, Extended Runway scheme
5th September 2019
From Boscobel & Partners – an independent, strategic communications firm based in London.
The final cost of Heathrow Airport’s 3rd Runway Plan could be £61 billion and Boris Johnson and Grant Shapps should announce a review
Heathrow Airport’s cost estimate for its 3rd runway is five years out of date and misleading, relating to an old pared down scheme
TheCAA must make Heathrow Airport Ltd come clean on the true costs
Boris Johnson and Grant Shapps should announce a review of the scheme, instead of giving conflicting signals and fighting for it in the courts
Higher costs will ultimately result in much higher passenger fees
5th September 2019 – The published costs of Heathrow Airport Ltd’s new North West Runway (“the 3rd Runway”) are five years out of date, are misleading and the real number could be as high as £61 billion by 2050, according to a detailed analysis by Heathrow Hub Ltd, the independent promoters of the cheaper rival extended-runway scheme.
The cost of the initial phase, included in Heathrow’s current consultation, could be as much as £37.7 billion when it is supposedly completed in 2026.
Heathrow Airport and the Department for Transport both use the number £14 billion in describing the cost of the 3rd Runway plan, but this uses 2014 prices and assumes a pared down scheme with no new terminal capacity. Heathrow’s current consultation shows a completely different scheme.
As well as these changes, the reasons for the ballooning costs in the Heathrow Airport 3rd Runway scheme include the expense and complexity of building it on a raised viaduct over a diverted M25 right by the M4 junction – Heathrow Airport admitting in 2018, after six years of work, that its original idea of a tunnel was undeliverable – as well as inflation and increased land acquisition and relocation costs.
An analysis by Heathrow Hub has been submitted to the Civil Aviation Authority (CAA), demanding Heathrow Airport comes clean about its costs, which will be passed on to airlines and passengers via higher passenger charges.
A spokesman for the rival Heathrow Hub extended runway scheme, a first phase of which could be operational before the 3rd Runway for a cost of £4.7bn, said: “The idea the 3rd Runway will cost only £14 billion is hopelessly out of date and inaccurate. On a like-for-like basis we estimate it is nearly £38 billion.
“Heathrow Airport should come clean on the true costs of its complicated, environmentally damaging scheme and not be allowed to hide them any longer.
“The CAA should force it to produce an up-to-date detailed estimate and instead of giving conflicting signals about the 3rd Runway while fighting for it in the courts, the Prime Minister Boris Johnson and Secretary of State for Transport Grant Shapps should announce a proper review”.”
“Heathrow Airport seems to have joined the list of infrastructure providers who win approval by producing ludicrously low cost estimates which get revised up later. Given Heathrow’s high levels of debt, questions need answering on how the 3rd Runway is going to be paid for.”
British Airways owner IAG has already expressed concern over Heathrow’s costs after the CAA disclosed pre-planning application spending by the Airport has tripled to £2.9bn. IAG has said the 3rd Runway could cause passenger charges, which are already the highest in the world, to double to more than £40 each.
A summary of our detailed cost analysis for Heathrow Airport Ltd’s (HAL) scheme is below.
Total
Pared down estimate in 2014 prices given by HAL to the Government in 2016
£14.0bn
Cost of adding back satellite terminal, stands and passenger transit/baggage links as shown in HAL’s current Consultation Masterplan
£3.6bn
£17.6bn
Cost of surface access works needed to enable NWR scheme (assuming Airport’s Commission estimate at 2014 prices)
£5.0bn
£22.6bn
Cost of additional items, e.g. earthworks and site remediation for new runway, land acquisition and compensation, relocation of property and infrastructure, car parks etc.
£8.8bn
£31.4bn
Allowance for inflation from 2014 to 2026
£6.3bn
Total cost NWR Phase 1
£37.7bn
Cost to expand to full 142mppa (million passenger pa) capacity as assumed in Airports National Policy Statement – Phases 2-4 from 2026 to 2050 (assuming HAL estimate £18.5bn at 2014 prices)
£18.5bn
Allowance for inflation from 2014 to 2050
£5.0bn
Total cost NWR scheme
£61.2bn
The CAA, which regulates Heathrow and enables it to pass costs onto airlines and passengers via higher passenger charges, is at last becoming concerned about the ballooning costs and has published a new consultation which would give it the power to restrict Heathrow’s dividends to shareholders unless it passes a new “financial resilience” test. A separate consultation proposes incorporating a new condition to “promote efficiency”. However, there is no explanation as to how such a condition could be retrospectively applied to the inherently inefficient NWR scheme, and the CAA has still not compelled Heathrow to publish an up to date cost estimate.
Heathrow Hub is currently in the process of appealing a decision by the High Court to refuse to quash the Airports National Policy Statement and the Court of Appeal hearing is scheduled for October.
Contacts
Boscobel & Partners
Boscobel & Partners is an independent, strategic communications firm based in London.
George Trefgarne
Charlotte Walsh 0203 642 1310
Heathrow Hub
Jock Lowe 07831 599 925
Notes to editors
Heathrow Hub is an independent proposal for additional capacity at Heathrow, by extending the existing northern runway westwards away from London, negating the need to build a third runway. Planes would land at one end and take off at the other. The scheme is cheaper, quicker and simpler. It also destroys fewer houses and was deemed viable by the Airports Commission. For more information and images, please visit: www.heathrowhub.com
Heathrow Hub’s proposal to extend the Northern Runway has been independently costed at £4.7 billion for its first phase.
Willie Walsh (IAG) warns again of excessive, out-of-control, unknown Heathrow 3rd runway costs
August 3, 2019
Willie Walsh, CEO of IAG, has always been against the very high costs of expanding Heathrow. He has again said he does not trust Heathrow to keep costs reasonable, and he is opposed to expansion – for which costs would escalate. He said Heathrow has “understated” the costs of expanding and the project is “out of control”, and there was “absolutely no way” Heathrow could build everything planned on budget. He thinks that while Heathrow continues to quote a figure of £14 billion for the investment required, the “true costs” would be over £32 billion. He believes building the 3rd runway and associated works alone will require £14 billion. And then a further £14.5 billion would be required to add terminal capacity and other infrastructure on the existing site. Walsh thinks just extending Terminal 5 could cost a further £3.5 billion. Heathrow now claim their costs even before building anything, are £3.3 billion for planning and preparation.Far higher than earlier estimates. It is a risk that the runway would be under-utilised, as costs would have to be too high – to pay for the excessive spending – to tempt airlines to use it. That would also make any net economic benefit to the UK very negative.
