Government to back ‘gold-plated’ Heathrow expansion
The government is poised to plough ahead with a controversial £49bn plan to build a third runway over the M25 proposed by the owner of Heathrow airport, despite warnings from airline bosses that it will make the hub more expensive and the construction process considerably more complicated.
Transport secretary Heidi Alexander will confirm the decision to proceed with the proposal from Heathrow Airport Limited (HAL) over an alternative plan submitted by hotel tycoon Surinder Arora later today, according to the Financial Times.
CityAM understands the update, which is also expected to reveal an overhaul of the Civil Aviation Authority rulebook for the expansion, will stop short of fully confirming HAL as the operator, and instead endorse the thrust of its more ambitious proposal over Arora’s Heathrow West bid.
The Department for Transport chose HAL and Heathrow West as its two preferred bidders last month, before asking both organisations for further information on their respective plans.
Its decision to side with the design proposed by the incumbent operator comes despite several airlines – including BA-owner IAG and Virgin Atlantic – warning its proposal will drive up costs for carriers and passengers.
IAG has previously warned that the fee paid per passenger to the airport could double were the government to chose the £50bn option tabled by HAL. And Sean Doyle, the chief executive of the group’s flagship carrier British Airways, said last month that the expansion should be carried out in a way that avoids rerouting the M25, in the manner that Arora’s proposed.
“If you can avoid moving the M25, you should avoid moving the M25,” he told the Airlines 2025 conference. “I can’t argue against the logic of that. I think we should look at ways of potentially building a shorter runway.”
IATA – the industry body for airlines – has previously said that under the current regulatory framework, Heathrow’s proposal would be “unaffordable in both the short and the long term”, accusing it of having an “addiction to gold-plated construction costs”.
The decision leaves Arora’s vision for the megaproject, which avoided rerouting the ringroad motorway by opting for a 2,800m runway over the HAL’s 3,200m strip, in tatters. But he and other rivals can still table revised bids to run the project in line with the government’s preferred plan.
The DfT, Arora Group and HAL declined to comment.