Heathrow expansion process – Spelthorne Council’s concerns

07 February 2019

Cllr John Boughtflower, Chair of Spelthorne's Heathrow Expansion Working Group, said: "Today we are registering some major concerns with the expansion process that threatens the scheme’s credibility and timely deliverability. These concerns have been flagged over a prolonged period with HAL and we remain surprised that such shortcomings should exist at all in such an important scheme.

With only a handful of months before the formal statutory stage commences, we are taking this opportunity to urge colleagues at HAL to immediately remedy these significant shortfalls. Failure to do so will risk the underlying support our communities and businesses have in the airport’s expansion."

Cllr Ian Harvey, Leader of the Council, said: "This multi-billion pound construction project has the prospect of delivering significant economic benefit to both national and local economies. The scale of opportunity requires the commitment of all parties to genuinely work together to deliver these extraordinary opportunities whilst safeguarding the interests of the airport’s neighbours for generations to come.

We remain committed to engaging with HAL at strategic and operational levels to get this process right and that is why we have taken this unprecedented step to highlight publicly the major shortcomings that potentially jeopardise the very credentials of a successful expansion process. We trust HAL will take affirmative steps to address the highlighted concerns.”

 Spelthorne’s five expansion process concerns

1)     Be honest with communities

 Recent HAL ‘targeted community engagement’ events have barely referenced construction, and where they did, it purely related to the 3rd runway and not the airport’s physical expansion. The portrayal of schematic ‘cartoon’ drawings and cross-sections misrepresented the massing and scale of what parking might be built. Along with various other ‘engagement’ shortcomings, Spelthorne (yet again) finds itself in the position of having to urge HAL, on behalf of our communities, to be more transparent with them about the potential impacts that could change the area close to their homes beyond recognition. Without open and meaningful consultation, our communities continue to be kept in the dark.

2)     Get serious about sustainability

Spelthorne desires a successful and sustainable expansion for local and national economic interests. The Council fully understands that Heathrow's expansion is a hugely complex project that is challenging to grapple with and demands an extraordinary level of scrutiny and assessment to safeguard local community and business interests. Spelthorne has worked hard over the last year to foster a number of development proposals that would secure the delivery of a successful expansion without ratcheting costs and major displacement. Spelthorne asks HAL to become much more receptive to proposals - including our Southern Light Rail scheme - that would make expansion more cost-effective, sustainable and critically less impactful upon the Borough whilst meeting National Policy Statement objectives set by the Government for expansion.

3)     Plenty of pain - where's the gain?

 Despite highlighting a number of actions that need early implementation to safeguard community interests, HAL has constantly resisted and refused to be party to the commissioning or timely consideration of these measures. Spelthorne urges HAL to recognise that the best time to have started planning for community safeguarding measures was a year ago when Spelthorne first raised them. The second best time is now!

4)     No public subsidy

As Cllr John Boughtflower, Cabinet lead for Heathrow has said, "this is no ordinary development; it is an extraordinary scheme of national importance" and that is why he has chaired the Council’s dedicated Heathrow expansion team for over a year, working on robustly scrutinising emerging expansion proposals. However, contrary to assertions made by the Prime Minister, the Secretary of State for Transport and HAL’s own Chief Executive, expansion is far from being advanced at "no cost to the British taxpayer". Our scrutiny costs are not insignificant. Spelthorne Borough Council does not want taxpayers to subsidise HAL’s expansion process. Spelthorne will continue to seek HAL’s financial commitment to meeting this locally crucial work without recourse to local taxpayers or impinging community services.

5)     Enough expansion ‘smoke and mirrors’

Recently, HAL has suggested that it can shave £2.5 billion and deliver 'expansion' for £14.7 billion, though there is no clarity whatsoever as to what will this sum actually delivers beyond the 3rd runway. With the cost of the 3rd runway estimated at circa £300 million, that leaves an outlay of £14.4 billion that is unknown. Spelthorne asks that HAL publicly declare the ‘true’ cost and scale of expansion alongside the phasing of terminal campus construction, transport and parking provision and passenger throughput per year. In the absence of this clarity, all stakeholders - from communities to airlines - will continue to be hampered in properly assessing the long-term impact, affordability and value-for-money of the proposed scheme.

HAL’s post-Brexit expansion plans

Heathrow Airport Ltd (HAL) is a £2.9 billion turnover business. In 2018 it paid £500 million in dividends to its predominantly overseas shareholders. Its largest shareholder, Spanish-owned infrastructure specialist Ferrovial, moved its international headquarters from the UK to Amsterdam following the Brexit referendum. Because HAL operates an aviation-hub monopoly, the Civil Aviation Authority (CAA) regulates its asset base.

Heathrow remains the busiest UK airport. From currently serving 80 million passengers with 480,000 flights per year, Heathrow expansion plans are to serve 130 million passengers with 700,000 flights per year. Expansion is wholly reliant on securing planning permission in the form of a Development Consent Order. As probably the largest privately financed infrastructure project anywhere in the world at present, HAL has a £260 million budget approved by the CAA to spend on securing its expansion development consent.

HAL’s expansion infrastructure and cost

Infrastructure to support expansion is reliant on a 3rd runway as well as a new terminal (T6), together with expanded and refurbished existing terminal capacity encompassing T2, extended along its length and connected with three further new pier buildings. The expansion construction timeline extends to 2038 and beyond.

HAL’s expansion was originally stated to cost £31 billion: made up of a £17.6 billion 'scheme capex' and a £13.4 billion 'core capex'. The two are interdependent, as HAL would not build new terminals without a new 3rd runway and vice-versa. Additionally, HAL also planned a separate £16.5 billion sum for 'asset replacement' to maintain their asset base. In total a planned £47.5 billion spend by 2048.

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