London Airports Compete for Chance To Build New Runway
At least some of the $3 billion in planned investment is underway at Gatwick Airport, 45 kilometers south of London, including a $150-million north terminal upgrade and baggage improvements in the south terminal. Improving Gatwick for the growing number of passengers—over 34 million last year—keeps development director Willie McGilleveray busy enough for now. But he'll be even busier if private owner Gatwick Airport Ltd. (GAL) wins a battle with former stablemate Heathrow airport for government approval to build the biggest piece of its plan: a $11.7-billion project to build a second runway, new terminal and related infrastructure.
GAL plans phased openings starting in 2020—with capacity to handle an expected 45 million annual passengers—ending 25 years later with more than double that capacity. But Heathrow airport officials also have two potential designs that are competing with each other and with Gatwick to be chosen by the government as the preferred site for a new runway to serve the London area and southeast England.
To help make its selection, the government in 2012 set up the Airports Commission with a May deadline to make its final recommendation after the next general election.
Led by former banker and financial-sector regulator Howard Davies, the commission’s four members include civil engineer John Armitt, who chaired the company that delivered all the facilities and infrastructure for London’s 2012 Olympic and Paralympic Games.
In November 2014, the commission published its evaluations of Gatwick and Heathrow as potential sites for the new runway, inviting comment from stakeholders by Feb. 3. “We have not yet taken a view on which proposal strikes the most effective balance between the assessment criteria,” stated Davies at the time. A final report will be published this summer, he added.
The commission last year had short-listed the Gatwick proposal and the two rival Heathrow schemes. A flamboyant new airport proposal by architect Sir Norman Foster, backed by London mayor Boris Johnson, already had been ruled out, largely on cost grounds. The proposed four-runway airport would have been sited some 60 km east of London on an expanded island on the Thames Estuary. The commission estimates its cost at up to $135 billion.
The commission estimates the remaining three schemes’ cost as being well above the estimates supplied by the proponents, but the costs are still dramatically lower than the estuary option. The commission estimates the Gatwick plan at $13.5 billion and puts the cost of a scheme by Heathrow’s owner at $28 billion. An independent scheme at the same airport, offered by Heathrow Hub Ltd., came in at over $20 billion.
Heathrow’s owner proposes building a third runway northwest of the existing northern runway. Heathrow Hub’s idea involves lengthening the northern runway to function as two 3,000-m-long runways separated by 650 m.
Heathrow Hub is led by former airline pilot William Lowe. and its directors include economist Mark Bostock, a former principal of the design firm Arup Group Ltd., London.
Gatwick airport was acquired in 2009 by the New York City-based infrastructure fund manager Global Infrastructure Partners. Former owner BAA PLC. was forced by the U.K. competition authority to sell Gatwick, leaving London’s Heathrow airport as its main asset.
While the airport faces local objection to the bigger runway plan, opposition is less fierce than at Heathrow, believes McGilleveray. Unlike the Heathrow options, Gatwick is not burdened with having to put a long section of the London orbital motorway—the M25, one of the country’s busiest routes—in a tunnel.
