Heathrow Owners Ready To Fund New Runway
Shareholders in London's Heathrow Airport are ready to invest GBP£16 billion if the government chooses it as the site for airport expansion, one of the investors said in a letter to new Prime Minister Theresa May.
Heathrow, Europe's busiest airport, has been campaigning for years to build an additional runway but a decision has been delayed by successive governments worried about pollution and local opposition. Other airports say they should expand instead.
Appointed last week, Transport Minister Chris Grayling said in a BBC radio interview he wanted to "move rapidly" with making a decision about where to build a new runway, and would be looking at the matter in the coming weeks.
UK-based Universities Superannuation Scheme (USS), which owns a 10 percent stake in Heathrow, said in a letter to May on Tuesday that the airport's shareholders were prepared to put up the money to pay for a new runway - the first time the investors have publicly confirmed their readiness to fund it.
"Alongside our investment partners from Canada, China, Qatar, Singapore, Spain, and the USA, we stand ready to invest GBP£16 billion of private money into expanding Heathrow," USS chief executive Bill Galvin said in the letter.
USS owns Heathrow alongside Spanish infrastructure company Ferrovial, which has 25 percent, Qatar Holding with 20 percent, plus other investors Caisse de dépôt et placement du Québec, the Government of Singapore Investment Corporation, Alinda Capital Partners and China Investment Corporation.
Some media reported the government's decision over whether to expand Heathrow or London Gatwick, Britain's No. 2 airport, could come in September.
Grayling on Sunday declined to comment on which option he preferred. May has in the past raised concerns about expanding Heathrow.
Heathrow puts the cost of building a new runway at GBP£16 billion, slightly lower than the GBP£18 billion estimated by the government-appointed Airports Commission, which recommended expanding Heathrow.
A different Heathrow expansion option to extend an existing runway is forecast to cost GBP£14 billion, while a second runway for Gatwick would cost an estimated GBP£7 billion.
Gatwick's Chairman Roy McNulty wrote to May on July 13 to tell her its shareholders, led by Global Infrastructure Partners and including the Abu Dhabi Investment Authority and the California Public Employees Retirement System amongst others, were committed to financing its expansion project.