Airport operator BAA’s cost forecasts for a second runway and new facilities at London Stansted have come under fire from airlines, which have described the plans as misleading and called for BAA’s spending plans to be “reined in”.
The expansion, known as Stansted Generation 2, will cost £2.7 billion ($4.8 billion) – £1 billion less than the original government estimate. “This confirms our view that Stansted G2 is a very deliverable project, given BAA’s track record on big construction projects like London Heathrow Terminal 5,” says BAA chief executive Mike Clasper.
“Now we’re ready to consult with local communities, airlines and other stakeholders to test our thinking and improve our plans, prior to their submission for formal planning approval in 2007,” he says.
However, the Stansted Airlines Consultative Committee describes the estimate as misleading, claiming that an £800 million investment in road and rail projects and £550 million in additional development costs have been excluded from the final figure. The committee, which includes the likes of easyJet and Ryanair, says that if these costs are added, the final bill will be about £4 billion. “BAA expects passengers to foot a £4 billion bill for its self-serving scheme before the proposed facilities can ever be used,” says the committee.
EasyJet chief executive Andrew Harrison complains that there are “no assurances on the famously unpredictable cost of surface access or cross-subsidy from other London airports”. He adds: “BAA seems to have forgotten that Stansted was an unloved white elephant until the charges were dropped to attract the likes of easyJet.”
Harrison criticises the UK’s regulatory pricing formula, which allows BAA a 7.75% return on capital projects. “Put simply, it is incentivised to over-build its terminal and runway infrastructure,” he says, and calls for the UK’s Civil Aviation Authority to “control BAA’s excesses by reining in their spending plans and avoiding any cross-subsidy from other London airports”. ■
Source: Airline Business
