It looks as if plans to expand Heathrow Airport in a climate emergency may be a dead duck – especially if their main backer in government – chancellor Rachel Reeves – is ousted.
A Chinese sovereign wealth fund is considering a sale of its stake in Heathrow airport partly over concerns about the rising cost of developing a third runway at the London hub.
The Chinese Investment Corporation, which is backed by Beijing, has put its 10 per cent stake in Heathrow on “active watch” and is mulling a sale, two people with knowledge of its thinking said.
The FT adds that CIC is concerned that commercial aspects of the airport, including the steep costs, undermine the business case for expanding the airport and that airlines have raised similar concerns, warning that the costs could be off-putting to carriers and that the total bill for the project, which includes moving part of the M25, may be far higher than currently forecast.
In response, a Heathrow spokesperson said:
The costs for expanding the airport have been reviewed by the CAA and their independent experts have determined they are credible.
However, writing on LinkedIn, Alex Chapman of the New Economics Foundation noted that the CAA (Civil Aviation Authority) had recently commissioned an independent report that showed the true cost of the scheme is in the range of £33bn-£52bn, excluding public transport improvements.
He wrote:
(more…)that’s a very big caveat. Years ago, TFL estimated the public transport improvements required to support the scheme would run to several billions. Uprate that to today’s money and the scheme costs are *beyond HS2 levels*.
The government has clearly stated that any such costs must come “at no cost to the taxpayer”. So the net private cost of the scheme is even higher than the stated range.
Transport Insights 