Heathrow urged to ‘come clean’ on third runway costs

The backers of an alternative Heathrow expansion scheme claim the airport has overshot its costings for third runway expansion by billions of pounds and is demanding a government review.

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A spokesman said: “The idea the third runway will cost only £14 billion is hopelessly out of date and inaccurate.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.”



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