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Heathrow ‘ordered to limit costs of third runway’

Heathrow has reportedly been ordered by the aviation regulator to rein in costs of its planned third runway.

The airport faces penalties if it fails to build the £14 billion new runway efficiently.

The Civil Aviation Authority inserted a new clause into its licence, amid concerns that costs on the project will spiral out of control, according to the Sunday Times.

It the first time such a condition has been imposed on the airport.

The complex third runway plans have raised fear in airlines, including British Airways owner International Airlines Group, that rising costs will fall on passengers and make flying to and from the airport unaffordable.

The CAA, which polices the fees the airport charges passengers, said the new licence clause was needed to “set clear expectations for Heathrow to conduct its business economically and efficiently”.

The authority said the clause, which comes into effect next month, was necessary because the “commercial pressure that airlines can bring to bear on Heathrow is not sufficient to ensure it always acts efficiently in the interests of consumers”.

Heathrow argued it was disproportionate and could put off investors.

The London hub is Europe’s busiest airport, handling more than 80 million passengers a year.

It said it is “extremely efficient and viewed as a benchmark for major infrastructure projects . . . The current level of scrutiny and transparency around capital investment is already unmatched globally.”

But an attempt to bill users for £3.3 billion of early spending has already faced opposition.

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