Aviation Strategy

Supplementary Written Evidence from Foster + Partners (AS 39A)

Introduction

1. This supplementary note provides information about the Thames Hub airport

proposal that was requested by the Committee following the oral evidence given to the

Committee by Huw Thomas, Foster+Partners on 28th January 2013. It provides:

· our assessment of the delivery timetable for the airport;

· our comments on the report produced by OXERA for the Committee;

· information about two meetings held between Foster+Partners, Halcrow Group

Limited and NATS; and

· our comments on the Policy Exchange four runway proposal for Heathrow.

Timescales for Thames Hub airport

2. The timescale is determined to a large extent on the work done by the Airports Commission and how far they progress their work on options when they report in Summer

2015. If the Commission does sufficient work to enable an Aviation National Policy Statement (NPS) to be put in place by 2017 (which will need to include a strategic environmental assessment as part of a sustainability appraisal), a Development Consent

Order application could come forward soon after, with pre-application work being able to be

started during the development of the NPS.

3. In this scenario, a potential timescale for the Thames Hub airport is set out below:

· Davies Commission Reporting: Summer 2015

· National Policy Statement designated following consultation and Parliamentary approval: Summer 2017

· DCO application for new airport submitted: Summer 2018 (with pre-application work, including environmental impact assessment and consultation, taking place from Summer 2015 onwards)

· DCO decision: by Spring 2020, if statutory deadlines are adhered to

· Construction commences earliest: Summer 2020

· Airport Opens earliest: Summer 2027

4. If the output of the Commission is less comprehensive then all of the appraisal and

assessment work that is a prerequisite to putting an Aviation NPS in place (including the

necessary consultation) would have to follow, probably adding around 2 years to the

timescales set out above.

Comparisons with a third runway at Heathrow

5. The additional capacity generated by a third runway would be expected to surpass

the relevant threshold in the Planning Act 2008 (an increase in potential capacity of more

than 10 million passengers per year). Thus it too would require authorisation by way of a

Development Consent Order and would be subject to largely the same constraints and

timescales for a new hub airport (e.g. the need to await designation of an NPS).

6. Given this, and the controversial nature generally of a third runway application, the

earliest a consent could be in place for a third runway would be the same i.e. around 2020.

7. The constrained nature of the Heathrow site and the need to keep the existing airport

operational would mean the construction process for a third runway would be complex and

likely to take a minimum of six. The earliest date for completion of a third runway would be

around 2026, only 1year quicker than a new hub airport.

Comments on Oxera’s report for the Committee

8. We have now had the opportunity to review report ‘Would a new hub airport be

commercially viable’ prepared for the Transport Committee by Oxera. Whilst the report

makes a useful contribution to the debate, we have serious concerns with some of the

figures quoted in the report.

9. We believe the question asked about the financial viability of a new hub is key and

one that has been central to the development of our proposals. However we were not

approached during the research or writing of this report and subsequently the report’s

authors were not in a position to clarify what our assumptions have been. Consequently a

number of figures have been used which are clearly attributable to our work but without

proper knowledge of how those figures have been arrived at. This is extremely disappointing

as we would have been more than happy to engage with them to correct any misunderstandings and thus they could have delivered a more robust report to the

Committee. What is reassuring is that on page 19 the report reaches the same conclusion

we have reached which is that a new airport as a stand alone project could be financially

attractive for private investment.

10. Our cost figures of £20 billion in relation to the airport’s construction and £4 billion for

its connection to existing networks, such as High Speed One and Crossrail, have been

developed in conjunction with Halcrow and the International cost advisors Davis Langdon.

They have been reached by benchmarking other airports and rail projects and by using an

elemental analysis of the particular characteristics of the Isle of Grain site. In addition we

have received input from construction managers, contractors and suppliers such as global

dredging companies on both construction time and cost. Halcrow and Davis Langdon would

be happy to give you a detailed explanation of the basis for their work and the risk provisions

they have included.

11. A separate and measured provision for optimism bias should also be considered, and

Davis Langdon’s recent work with HM Treasury on the HS2 allowances will form a good

platform for developing this model. Our cost model also takes into account the economies of

scale associated with programme managing a development of this size in a structured and

integrated manner and also takes advantage of the ‘green field’ nature of our proposals.

There is support for the notion that development in a live airport environment adds

considerable cost without delivering value. Our proposals, which enable the development of

the hub solution without operational restrictions, not only reduces the programme

constraints, but offers better value for money for all parties involved in the

investment/funding process and, importantly, lessens the risk of the development process for

this vital piece of national infrastructure.

12. Within our cost assumptions for the airport are allowances for connections into the

existing network, a network that has already received substantial public sector investment

through the preparation of the Thames Valley development area and as previously

mentioned High Speed One and the future Crossrail. We have been very clear that our

proposals for a new Thames Barrier and a London Orbital Rail are separate projects

independent from the airport and the costs of these should not be attributed to aviation

development.

13. We would agree with a lot of the analysis related to compensation costs but we have

arrived at a lower figure. We would be happy to discuss this further in confidence as we

believe it is a commercially sensitive part of our strategy. We would point out though that in

compensating airlines and current owners to move from Heathrow an asset is left behind

which offers substantial value to help balance the compensation costs. This is not

recognised in the report.

14. Throughout the development of our proposals we have worked on the basis that

aviation connectivity for trade, services and leisure will be a critical part of our future

prosperity and that it should be provided with foresight and in conjunction with other policies.

To this end investment in an airport should be linked to the development of employment

opportunities and the natural and substantial growth of London. There are wider benefits

from aviation to the national economy and these do need considering. We believe this is an

important consideration which the report raises in its opening statement.

15. Finally we would just like to raise the point that no aviation expansion comes without

additional surface access. Inevitably some of this will need to be provided by the public

purse. A wider question is to ask which solution requires the least public investment and

delivers the most gain from it. We have been clear that dedicated airport surface access is

included within our financial proposal, but beyond that there will be many additional

beneficiaries and aviation should not be expected to pay for all of it, although aviation

passengers will make a significant contribution through the fare box.

Meetings with National Air Traffic Services

16. Foster+Partners and Halcrow have met with National Air Traffic Services (NATS)

twice to discuss the Thames Hub.

17. Huw Thomas (Foster+Partners), Andrew Price (Halcrow) and Nick Kaberry (Halcrow)

met three NATS members of staff (Jane Johnston, External Relations Manager, Brendan

Kelley, Operations Manager and David Harvey, Business Development Manager) at NATS

offices in Swanwick on 21st December 2011.

18. A second meeting was between Huw Thomas, Andrew Price and David Harvey was

held at Halcrow’s offices in London on 20th September 2012

19. The view of NATS in these meetings about the Thames Hub was consistent with that

expressed by NATS CEO Richard Deakins, who told BBC Radio 4’s Today programme on

17th August 2012 that:

"There would be some work to do with our Dutch colleagues.......Nothing is

insurmountable, we're very happy to advise."

http://news.bbc.co.uk/today/hi/today/newsid_9745000/9745150.stm

Comments on Policy Exchange four runway proposal for Heathrow

20. The proposal would require the closure of the Wraysbury reservoir and we have

assessed the main impacts on the water supply system, environment and the road network.

Water supply system

21. The reservoir stores 34,000 million litres of water and 400 million litres of water are

pumped daily into the reservoir from River Thames at an inlet at Datchet. The reservoir is

part of the Thames Valley stored water system of a network of 12 reservoirs serving London.

The reservoirs are pumped storage schemes dependent on raw water from the River

Thames.

22. The closure of Wraysbury would have serious implications for household and

businesses in London particularly in a dry year, such as the 2012 drought where water

restrictions were introduced. Without Wraysbury, more severe water use restrictions could

have resulted from the drought with significant costs to businesses in addition to costs to

households.

23. Finding a replacement reservoir with a suitable source of water would take a

minimum of 10 years from concept to completion under current planning regulations.

Presumably the costs of this would also have to be covered by the airport.

Environmental impact

24. Wraysbury Reservoir is a Site of Special Scientific Interest (SSSI) in its own right. It is

also part of the South West London Waterbodies Special Protection Area and a Ramsar site.

As such, the normal environmental regulations apply for a European site. These include the

need to comply with the Habitats Regulations, the need for an Assessment/Appropriate

Assessment and the need to prove imperative reasons of overriding public interest (IROPI)

for closing the reservoir and to ensure provisions for compensation.

It is worth noting that an expanded Heathrow would significantly increase the numbers of

flights over the centre of London, and the number of people in the Capital suffering

unacceptable levels of noise.

Road network

25. The construction of the airport over the M25, in a location where the motorway is

already a Dual 5 lane road (with additional parallel distributor roads on either side) and is

used by 200,000 vehicles per day, would have huge construction and traffic operational

impacts. It would require a new alignment for part of the M25 over a length of around 3km,

either in a tunnel below the new airport, or built at grade to the west of new airport boundary.

Given the doubling in the size of the airport, it is likely that the newly aligned section of the

M25 would also need to include additional lanes.

26. It is worth noting that the cost of the 1.8km, Dual 2 lane A3 Hindhead Tunnel,

completed in 2011, was £371m. A Dual 6 lane (or more) tunnel with a length of 3km in this

location would cost many times more.

27. Alternatively rerouting the M25 around the airport would lengthen the motorway by

between 2 and 3km, resulting in upto an additional 600,000 vehicle km per day, or 219

million vehicle km per year, with consequent journey time and cost implications for drivers

and additional carbon emissions.

Surface Access in relation to expansion of Heathrow

28. Some have suggested that planned surface access improvements to Heathrow will

be sufficient to accommodate large scale expansion of the airport. There are some planned

future improvements to surface access to Heathrow from central London, namely the

introduction of Crossrail in 2018 and the Piccadilly Line upgrade in the next decade.

However, these capacity increases will primarily serve to absorb London’s forecast

background growth in public transport demand and relieve overcrowding – and can at best

only hope to accommodate incremental growth in Heathrow traffic. They would be unable to

provide the spare capacity to support the necessary development of Heathrow into a four

runway hub.

These planned surface access improvements do not address access from north, south and

west of the airport. Airtrack has been put forward and shelved – while the Western rail

access proposals are currently being developed; though both could improve rail connectivity,

neither delivers a notable uplift in capacity.

Without sufficiently new and capacious rail connectivity, an expanded Heathrow would place

yet further demands on a local road network already suffering severe capacity constraints

and consequentially result in worsening of already poor air quality impacts.

Were one to provide sufficient surface access to accommodate a large expansion of

Heathrow, the following might be necessary for consideration:

· New capacity via a high-speed rail line into Central London with appropriate connections to the existing system;

· New or improved rail services to Southwest and West London and to the towns in Surrey, Berkshire and Buckinghamshire;

· For highways, both improvements to capacity and measures to reduce demand involving charging might need to be considered;

· The land-take involved with Heathrow expansion could mean major modifications to the existing roads around Heathrow (M25/M4).