The Government have published the cost and commercial viability analysis of the Airports Commission’s short-listed options for additional airport capacity. Please find links to the appropriate and supporting documents below.
Assessment of the capital cost to deliver the short-listed options
Cost and revenue identification: Gatwick Airport second runway – This report sets out the assessment of the capital cost to deliver the Gatwick Airport second runway scheme.
Cost and revenue Identification: Heathrow Airport extended northern runway – This report sets out the assessment of the capital cost to deliver the Extended Northern Runway scheme.
Cost and revenue identification: Heathrow Airport North West runway – This report sets out the assessment of the capital cost to deliver the Heathrow Airport North West Runway scheme.
Supporting documents
Literature review – written by PricewaterhouseCoopers (PwC) as part of the Cost and Commercial Viability work stream – this review considers:
Section 1: The current financing models at Gatwick Airport Limited (GAL) and Heathrow Airport Limited (HAL), a review of other financing models from elsewhere in the UK and internationally and the existing UK regulatory regime.
Section 2: A review of the key risks and challenges to deliver financing to the scale required to build new capacity.
Section 3: A review of possible alternative financing models and some of the potential implications for the regulatory regime.
Financial modeling input costs – this report on financial modelling input costs has been prepared by PwC as part of the Cost and Commercial Viability work stream. These costs are based on the Airports Commission (AC) view of the costs for each scheme, which are in turn based on independent advice, research and analysis. This report presents the AC approach to calculating costs, and the effect of the proposed schemes on the Regulated Asset Base (RAB) of Heathrow Airport and Gatwick Airport. The report is structured as follows:
Introduction: provides an overview of the AC’s approach to calculating costs;
Section 1: Gatwick Airport Limited’s (GAL) scheme proposal for a second runway (LGW 2R);
Section 2: Heathrow Airport Limited’s (HAL) scheme proposal for a North West runway (LHR NWR); and
Section 3: Runway Innovations Ltd and Heathrow Hub Limited’s (HHL) scheme proposal for an extended northern runway (LHR ENR).
Funding and financing – this report considers the Funding and Financing of the proposed schemes as part of the Cost and Commercial Viability work stream. It considers the overall cost of the commercial propositions inclusive of financing and funding for the schemes. This report is broken down by each scheme into the following sections:
Section 1: Introduction and methodology;
Section 2: Gatwick Airport Second Runway (LGW 2R);
Section 3: Heathrow Airport North West Runway (LHR NWR);
Section 4: Heathrow Airport Extended Northern Runway (LHR ENR); and
Section 5: The aeronautical charge context.
These reports support the cost and commercial viability analysis in the consultation on the Airport Commission’s shortlisted options for additional airport capacity. PwC’s ‘Literature review’ of funding and financing arrangements considers:
- risk factors relevant to airport development
- procurement models in use in the UK beyond the airports sector
Three separate reports for each of the short-listed options identify costs and revenues associated with the construction and operation of that proposal.
The ‘Financial modelling input costs’ report sets out a summary of the costs and assumptions used as inputs for PwC’s financial modelling.
A further report analyses the financing and funding of each option and an analysis of the potential spread of aeronautical charges required to finance each.
Further supporting documents
The Government has also published a number of reports by The Commission and consultants which have informed the reports and also documents from scheme promoters detailing proposals. These documents include detailed technical assessments of the 3 short-listed proposals written by the Airports Commission and their consultants. All of these documents are available on the Airports Commission website here.