Arora Group, one of the largest landowners in the Heathrow area, has put forward their own proposals for Heathrow expansion, saying they will be up to £6.7bn cheaper than the Airport’s own proposals.
Arora, a private hotel and property company owned by Surinder Arora, commissioned a review of Heathrow’s plans and believes there are cheaper and better solutions to expand Heathrow which would sill provide the capacity improvements needed by the national economy.
Arora’s views have been submitted to the Department of Transport in its recent consultation on the expansion plans, having commissioned a team of infrastructure and aviation experts including Bechtel to provide an initial assessment on potentially-improved delivery options for Heathrow Airport. Arora says it now wants the Government to look carefully at its proposals and “to challenge the current monopoly status at Heathrow, at the same time that airlines are calling Heathrow’s own plan unaffordable”.
They argue that, given Heathrow’s charges to airlines are already the highest in the World, that they will become unaffordable if the cost of expansion is too high. This would, say Arora, mean Heathrow would be less internationally competitive, meaning worse routes and higher prices for customers.
Arora’s initial review proposes a number of potential wide-ranging improvements which could be realised, they say, in a more efficient master plan. Arora will continue to develop the plan but in the meantime is asking the Government to consider a number of areas where it believes several billion-pound savings could be made.
They propose a £1.7bn saving to the terminal design and taxi way system which, say Arora, would be preferred by airlines if it was reworked and also would maintain the same rise in runway and terminal capacity.
Arora believe that Terminal 2 expansion is not necessary for the overall expansion of Heathrow. Removing this would save an additional £1.1bn.
They believe that the £1.0bn passenger transit system for airside passengers is unnecessary and that airlines think it is not needed for their passengers.
These changes, plus improving parking proposals, would reduce the site area required by 20%, say Arora, which significantly reduces site assembly and preparation costs, bringing the total saving to £5.2bn, “without significant amendments to the Government’s North West Runway plans”.
They further suggest that starting the runway 500m further east, so that it begins inside the M25, would avoid the M25 construction element of the project, saving £1.5bn.
An industry insider asked about the plan to start the runway further east said: “The proposal for a short runway further towards London sounds similar to the proposal (from Heathrow Airport) which was rejected by the all political parties in 2010 because of its unacceptable noise and property impacts on local communities.”
Arora says it has commissioned initial modelling from experts on the impact of both the plans with and without moving the proposed runway location.
Arora’s Chairman and Founder, Surinder Arora, said: “We want passengers to be at the heart of our plans and the current monopoly at Heathrow, which over-charges airlines and in turn raises fares for passengers, is not the right model for the future. Heathrow needs competition and innovation which puts passengers and airlines at the heart of the expansion project.
“We have brought together some of the world’s leading experts in infrastructure and aviation to develop the proposals that we have submitted to the Government. In addition, our own advisory board brings in unparalleled experience including former British Airways CEO Sir Rod Eddington.
“We are now calling on the Government to consider more carefully how competition can improve Heathrow’s offer to passengers, and how airlines at the heart of these plans will benefit passengers. We look forward to working with the new Government to discuss these issues and how our proposals can help improve the airport’s expansion.
“One of the options we have proposed to Government includes a possible shift of the runway so that it does not impact on the M25 and M4, as we know the M25 junction being affected threatens the deliverability of the whole project. We appreciate this is a politically sensitive issue but it is merely an option with additional savings of £1.5bn, whereas the rest of our proposals save up to £5.2bn without the need to amend the runway location.”
The proposal to increase competition by splitting the ownership of the terminals at Heathrow is perhaps the most radical. The idea would be that Heathrow Airport Limited, who currently own and operate the whole airport, would not own and operate the new runway and the new Terminal 6 that would be required. This would be owned and operated by some other party.
A spokesperson for Arora said: “Under Arora’s proposals HAL would own the current two runways and T2, T3 and T4 as they do now, but not necessarily the new runway and T6. That would create competition between terminals to offer best value and experience to airlines and customers. This model works globally – eg airports such as JFK and La Guardia have different owners around the airports.”
A Heathrow spokesperson commented: “Heathrow’s expansion proposals are supported by the Government and have widespread cross party political, business and union support. We continue to develop our plans to improve passenger experience, reduce the impact on local communities, and lower the cost so we deliver expansion at close to current charges. We are always happy to have ongoing engagement with all stakeholders to improve our plans. There will be further opportunity to give views during the public consultation later this year, which is part of the Development Consent Order planning process.”