Deliverability is essentially about understanding the key risks that may prevent the NWR scheme operating at the assumed capacity and on the timescale specified in the NPS. This captures planning, financing, construction, public and political deliverability and legal risks. This annex examines some of the main delivery risks posed to the NWR. These are essential considerations because if the NWR cannot be delivered to its assumed capacity, because of, say, airfield design pinch points or planning issues, there will be knock on effects on the business case of the scheme.
The proposed NWR scheme, considered by the Airports Commission and the DfT in their appraisals, includes building a third parallel runway and associated terminal facilities within the site constraints in the figure below. A technical assessment prepared for the Airports Commission considered the scheme “capable of being delivered as a full safety and security compliant airport” which would “provide capacity for substantially greater number of flights, passengers and cargo.” This finding was based on a technical assessment of the ground infrastructure associated with the airport operations. The Airports Commission also noted the well-understood nature of the scheme and did not believe there to be any particular problems associated with the procurement of specialist resource to undertake detailed design and construction.
Figure 35: Heathrow Airport NWR Master Plan
While the Airports Commission considered the operations of the actual ground facilities as a relatively low-risk proposition, it believed that the largest risks to a 2026 delivery date came from the tunnelling required for the reconfiguration of the M25, as well as the relocation of the Lakeside Energy from Waste plant.
In terms of these ground infrastructure challenges for the ENR scheme, it was also considered “capable of being delivered as a full safety and security compliant airport,” which would “provide capacity for substantially greater number of flights, passengers and cargo.” However, the Jacobs appraisal stated that:
[ … ] the concept is unconventional, has never been used elsewhere in international, EU or national regulatory instruments, standards or recommendations for safe design or operation … New regulations, recommendations and accepted industry practices, will be needed to address the physical and operational parameters of this runway concept. This may introduce a time delay to operational opening and there is a risk that unforeseen regulatory issues may arise.
The ground infrastructure challenges for the Gatwick scheme are simpler, with fewer risks to manage. The simple airport infrastructure, lack of associated planning and construction challenges, and the use of land already safeguarded all contribute to a simpler ground scheme.
The proposal for the M25 is for it to be placed in sections of tunnel under the new runway. Emma Gilthorpe elaborated on HAL’s latest proposals:
[ … ] we are considering and consulting on two options for constructing the new runway over the top of the M25. The ‘tunnelled’ option referred to involves realigning the M25 circa 150m to the west of the existing carriageway and 4m lower than its current level, in order to minimise the height of the new runway above it. The ‘bridge’ option involves building across the current M25 carriageway, meaning that the runway ground level would necessarily be some 4m higher than with the tunnelled option.
Willie Walsh believed that HAL had “still not figured out how they are going to deal with the M25.” Dale Keller also believed there was a “huge risk and uncertainty over the road realignment, betterment and M25 coverage, which we do not know.”
The Airports Commission estimated the M25 cost at £576 million (2014 prices). HAL said indicative costs for both their options are circa £600m. Highways England estimated this scheme to cost between £471 and £1,101 million (2014 prices), with potential for increased scope and constraints leading to cost increases that exceed the funds set aside for optimism bias. In terms of costs, John Holland-Kaye commented:
I should not say that all costings are pinned down, but they are at the right level of maturity at this stage of the process. There is a lot more work that we need to do. The first thing to do will be to finalise what the plan is. We will only be able to do that once we have completed the first consultation and come down to an individual scheme. Then we will be able to do a far more detailed costing.
The M25 realignment is due to commence in 2020/21. This timeline was described by Highways England as “extremely challenging” because of the risk involved in the diversion of overhead power lines prior to the granting of the DCO and demolition of existing lines.
John Holland-Kaye in his evidence said that “what we are proposing to do with the M25 is not anything that has not been done a thousand times before and has not been done at many other airports before.” It is not considered by Highways England to be novel or particularly high risk in relation to required outputs. However, the interfaces between the existing roadworks, such as the A4 and M25, presents delivery risk and will “require very careful planning”, including the creation of scheme specific delivery teams and early involvement of construction partners. The Secretary of State expressed his ambition to “to make sure that the M25 carries on functioning normally; it cannot grind to a halt.”
One of the other major risks with the M25, as identified by Highways England, is that it “will potentially place resource challenges on the industry as it runs concurrently with the more than half of construction phases in the RIS programme alone.” This is in addition to the finding by Highways England that the wider Heathrow road network proposals will “place significant pressure on Tier 1 contractors’ resources if timescales for infrastructure projects in the UK and particularly the South of England stay the same.”
In summary, Highways England concluded that “the M25 diversion proposal is certainly deliverable in the timescales assumed but with a higher degree of risk than might otherwise be assigned.” It added that “the M25 works are firmly on the critical path, and as such their successful completion directly impacts on the delivery and hence benefit realisation of the entire proposal.”
The strategic road network surface access proposals for the ENR scheme are generally consistent with those for the North-West Runway option, with the main exception differences in the scope of the proposed works to the M25. Heathrow Hub believe this was a critical point of difference:
The extended runway in the ENR scheme would be constructed much further south from the M4 junction than NWR, allowing the new portion of motorway to be built offline without complex tie-ins and allowing lanes to be easily switched with minimal disruption.
With respect to the road proposals of the Gatwick scheme, Highways England concluded that:
The Gatwick proposal, whilst being a significant construction scheme does not represent a significant risk to the existing network during construction or have unusual risk of not being delivered in the suggested timeframe. The Gatwick proposal is the lesser in terms of overall delivery risk, impact on existing network during construction and has no apparent direct impact on RIS commitments.
The NWR would require the removal and replacement of the Lakeside Energy from Waste plant which is a High Temperature Incinerator at Colnbrook near Slough. The Airports Commission concluded that:
The plant, while not of national importance, nevertheless plays a significant role in regional and local waste management and has a valuable capability to process clinical waste and other contaminated material. Its replacement is not considered an optional component of the scheme. The planning and construction of an Energy from Waste Plant is a substantial exercise in its own right, whose timescales are not substantially shorter than the delivery of new runway infrastructure. The process of planning a provision of an alternative facility would, therefore, need to begin soon after a decision to proceed with airport expansion.
The revised NPS recognises the “the effects of removing the Lakeside energy from waste plant” but only requires the scheme proponent to “make reasonable endeavours to ensure that sufficient provision is made to address the reduction in waste treatment capacity caused by the loss of the Lakeside Energy from Waste plant.”
Lakeside Energy from Waste Ltd believe the “the draft NPS does not go far enough” and “fails to provide any explicit support for the relocation of the Lakeside EfW or the associated complex”. It subsequently recommends that the plant “be offered the same level of importance as the Immigration Removal Centres given the essential role it plays in the smooth running of the regional waste management system and the reliance upon it of thirteen local authorities. Lakeside EfT Ltd also remarked that “if the plant and the waste complex as a whole were not replaced, given the lack of acceptable alternatives, the direct consequences would be disruptive and financially harmful to the local authorities that rely upon the services provided.”
The ENR scheme retains the Lakeside Energy from Waste Plant.
Substantive airspace change has been incredibly difficult to achieve in the UK and because of this, the airspace structure in the UK remains largely as it was since 1974. Given the fine margin in benefits and costs, the NWR scheme may only be economically viable if operating at or close to its maximum stated capacity of 740,000 ATMs–which is dependent on airspace changes taking place. John Holland-Kay acknowledged the risk that airspace change presents to the Heathrow scheme:
[ … ] airspace change will need to happen, so there will be urgency to do it. We will need certainty on that. If we do not have the space in the sky to service the additional flights, we are not going to have a business case to make this work. We cannot start building. Our investors could not take on that risk. We need to sort all this out.
Andrew Haines of the CAA also believed that airspace changes were a “pretty fundamental” component to the NWR’s deliverability and said that “If we do not change the airspace, there is no economic case to build the runway. You might be able to use it for a few hours a day, but the economic case is destroyed.”
The Heathrow NWR airspace proposal, including any associated flight-path changes, is only provisional and there are no formal guarantees yet that it can be delivered safely and without having a knock-on effect on other airports in the London system. The NPS concedes that there is “ … greater uncertainty [for the NWR scheme] as to what measures may be required to ensure that the airport can operate safely.” The work done to this point has only involved “very high level” preliminary assessments, including an airspace efficiency report by NATS; a Fast Time Airspace Simulation by NATS; an airspace resilience paper by NATS; preliminary safety review by the CAA; and a ground risk analysis by Health and Safety Laboratory. The high-level findings from these assessments are presented below.
NATS, as part of their airspace efficiency report, found that “all three concepts of operation for the revised airport operations can be supported by the London TMA operation at the levels of traffic asserted, subject to the necessary safety case being approved by the CAA.” It added that “it is possible that the additional level of movements at a particular airport may not result in the same increase within the overall network due to potential inter-airport airspace interactions.” With respect to the NWR scheme, it stated that “the proximity and relative runway orientations of Heathrow airport and RAF Northolt could have a detrimental mutual impact their respective operations.” NATS acknowledged that “all three proposals would require the development of new operating procedures (including Missed Approach Procedures) and potentially require additional airspace to be provided to ensure safe and efficient operations.” NATS, as part of the Fast Time Airspace Simulation, also concluded that “none of the proposals could be delivered into [LAMP Phase 1] airspace,” and post Lamp Phase 2 “London TMA would need to be substantially redesigned to enable an additional runway as well as the forecast growth at the other London airfields to be efficiently supported.”
The CAA, in their preliminary safety review, outlined a list of issues that need resolving to guarantee that an expanded NWR can operate safely:
Andrew Haines in oral evidence said that the CAA “found that there was no obvious impediment to [Heathrow] being developed but there were issues that would need to be dealt with.” It should be noted that some of these issues are common to all the expansion options, particularly the last point about the London Airspace Management Programme (see Table 10).
Table 10: Summary of key safety issues for the expansion options
Because of the conflicting interests of airports and the highly contentious issue of managing community noise concerns, substantive airspace change has not taken place for decades. The implementation of the London Airspace Management Programme (LAMP) reflects the difficulties associated with agreeing substantive airspace changes. The first phase of LAMP Phase1a was implemented in February 2016, with changes to the airspace used by London City and Stansted airports, including the introduction of performance based navigation at London City and a new standard instrument departure to allow aircraft to climb faster at Stansted. The CAA noted that:
[ … ] the original proposal for LAMP 1a was significantly more ambitious, with proposed changes also made to the departure routes at Gatwick Airport. However, Gatwick withdrew its support for the proposed changes due, as we understand, to the extent of community concerns.
The next phase, LAMP2, will require detailed change plans to be prepared, and will include more fundamental changes to the routes for Stansted, as well as for Heathrow, Gatwick and Luton airports. Given the airspace interdependencies between London’s airports (figure below), the CAA believes that the changes required under LAMP2 and a third runway requires “substantial” coordination and cooperation between individual airports which “will act to protect their own interests and will be limited in the extent to which they can cooperate in order to comply with UK competition law requirements.” Tim Hawkins, who represents Manchester Airports Group (the owner of Stansted Airport), commented:
A word of caution would be that we have to do it in a way that balances the interests of different London airports. It cannot be an issue where the Government bend over backwards to deliver one objective and compromise the interests of a whole load of other airports… We are making sure, as you would expect, that we represent our own interests in this. We are not opposed to the development of a new runway at Heathrow. We need to make sure that, as it is delivered, it is delivered in a way that does not compromise our interests.
Figure 36: London Airspace and Routes
The CAA recently concluded that “there needs to be a stronger system of determining how airspace is designed, how these designs are implemented and how they are enforced.” Specifically, the CAA commented that:
At present, there is no comprehensive mechanism in the airspace management architecture to compel all the necessary parties to bring forward airspace changes. Progress is dependent on the choices of competing commercial airport entities and NATS. Further, there is no mechanism for resolving trade-offs between competing commercial airport entities, but there ought to be.
Because of this, the CAA believes that Government leadership is necessary to set the case for reform and modernisation and to develop and implement the necessary policy about how trade-offs between different parties should be resolved. It added that “a clear ends, ways and means masterplan” was required from Government to set out how UK airspace as a whole should be reformed based on analysis and evidence of future growth aspirations. John Holland-Kaye acknowledged that “it is something that, if I may say, consecutive Governments have put off because it is a big thing to happen.” He added that:
The pressure needs to remain to make sure that the Government deliver on this and that it does not get kicked down the road. Whichever airport is expanded, this will need to happen. It will be needed without expansion just to cope with growth in demand. This is an opportunity to bring it forward.
The Secretary of State was “very confident” that all the airspace changes can be delivered but in terms of a future role for Government in delivering that change, he believed that “it is really going to be for the CAA and NATS to deliver it, and I am confident that they will.”
The Planning Act 2008, as amended by the Localism Act 2011, sets out the process by which Nationally Significant Infrastructure Projects can achieve permission through a Development Consent Order (DCO) issued by the relevant Secretary of State.
The Airports Commission acknowledge that there is no clear precedent for securing approval for this type of airport development and that “securing planning permission may be a lengthy process.” It also said that “it is difficult to state definitively how long the planning process will take, including the risk of delay through any legal challenge.” The Airports Commission believed that because airport capacity is a contentious issue and the privatised UK aviation market is a competitive one, challenge or judicial review of Government decisions is likely and would not necessarily be unique to the Heathrow NWR proposal.
The Secretary of State acknowledged that someone may come forward to challenge the NPS. He commented that the Government “has worked exhaustively to try to cover all bases to make sure that we have provided all the evidence, that we have considered all the different factors in this and consulted where we need to consult.” He said he felt “confident as we go into this process that we do so on a strong base.” Emma Gilthorpe also commented that “the process itself is there to ensure that the evidence backs up the application we are making … That is a key mechanism for reducing the legal risk.”
Once an NPS has been designated, there is a six-week window when legal challenges to it can be made. As this is provided for in the Planning Act 2008, such a challenge is known as a ‘statutory challenge’, in contrast to ordinary judicial review, which is a common law (i.e. non-statutory) remedy. An NPS cannot be challenged on its merits by this method (i.e. on its contents), it can only be challenged on the grounds that “the procedure leading to its designation had some legal flaw and so potential deficiencies in public consultation are likely to be subject to considerable focus.” According to Bircham Dyson Bell:
Once the six-week window has expired and any statutory challenges have been dealt with, the only way for an NPS to be changed is for the relevant Secretary of State to review it under s.6 of the PA 2008. It may be possible to persuade the Secretary of State to review an NPS in the light of changed circumstances, and it would be possible to seek a judicial review of the Secretary of State deciding not to review an NPS (or failing to decide to review it).
The Planning Act 2008 provides for the NPS to be reviewed “whenever the Secretary of State thinks it appropriate to do so”, and all or part of an NPS may be reviewed. In reaching this decision, the Secretary of State must consider whether there have been significant changes in circumstances that were not anticipated in the NPS and would have resulted in changes to policies in the NPS. To date, no NPS has been subject to review.
Once designated the NPS will give direction to the Planning Inspectorate, which will consider specific applications submitted by the scheme promoter. It is then for the Secretary of State, taking account of the Planning Inspectorate’s recommendation, to decide whether to allow that scheme by granting a DCO. Once a decision has been issued by the Secretary of State, there is a 6-week period in which the it may be challenged through judicial review. Although DCOs are in force during such judicial review challenges, the promoters are unlikely to start implementing projects in case they get overturned. This has a delay on the implementation of projects. Legal challenges have already been shown to take considerable amount of time for other national significant infrastructure projects: the Rookery South challenge was heard nearly a year after the event being challenged took place, the Hinkley Point C challenge nearly 10 months later; and the Preesall challenge exactly 8 months later.
In terms of transport projects, for the Heysham to M6 link road, campaigners applied for a judicial review to challenge the decision by the Secretary of State to grant approval for the project. While the review was rejected, it took several months between the approval date and the final judgment to be resolved in November 2013. This had the impact of increasing the costs of the scheme and had an impact on the construction start date. This was a relatively small and less controversial scheme compared with what is being proposed with the NWR scheme, and the campaigners were applying for judicial review on less controversial grounds.
It is impossible to know the exact grounds upon which a judicial review may be launched. Judicial review could be used on a range of issues; though one of the major risks is related to Heathrow’s future air quality compliance. The Airports Commission considered legal air quality compliance as the “most complicated risk,” and because of this the “delivery of the runway in line with the Commission’s assessment of need could be compromised”. The robustness of the case for and evidence for the NWR scheme will clearly play a factor in minimising its risks at judicial review. The Secretary of State acknowledged this when questioned on the potential legal risks faced for this scheme:
One thing we had to take into account was that there is constantly a legal risk as we go through, and you would want and expect us to take a slightly cautious approach in our assumptions. I do not want anybody to be able to say that we have been wildly optimistic or that we have got something wrong. We will do our best, and are indeed doing our best, to make sure that the arguments we finally bring before Parliament are as resilient and robust as possible, but we will also be completely transparent with this Committee and Parliament about the evidence on which we base it all. Yes, of course I want to make sure that we are as well protected as possible against legal challenge.
The Airports Commission acknowledged that, for an investment of this size, phasing the capital spend and the release of capacity may be used to mitigate delivery risk. While HAL’s exact phasing plans are not yet confirmed, it originally proposed “phased introduction of terminal capacity, with new terminal facilities and the redevelopment of existing terminals being introduced as required by growth in demand,” which the Airports Commission believed to be a credible proposition. This specifically involved the proposed phasing of development in six steps comprising the following stages:
John Holland-Kaye also acknowledged that because it had to privately raise all the money through its shareholders and open markets to fund the investment, capacity had to be phased, and it could not “put in all the money up front against uncertain growth”. He elaborated further on their phasing plans for the NWR:
We are planning to add new capacity at the airport in blocks of 5 million to 10 million passengers by building on the terminals we have today. That allows us to phase the cost of Heathrow expansion, but it also means that we are phasing our ability to take in new airlines to serve new markets. We will have to finalise the exact speed at which we do that as we develop our plans with the airlines. The new capacity needs to move in sync with demand.
Willie Walsh also believed there was potential for phasing the development and therefore the cost of expansion, as passenger demand increases:
I do not think you could have a situation whereby if you go from 480,000 movements to 740,000 it will be done overnight. It will be phased over a number of years. If done sensibly, it can ensure that the costs do not escalate from a passenger charge point of view.
Heathrow Hub’s phasing plan, per the Airports Commission documents, is broadly the same as that outlined above for the NWR. Jock Lowe believed their scheme is “viable even at a third of the capacity growth” and in a follow-up submission said its “Phase 1, costed at £3.8bn, is by far the cheapest, lowest risk option for expansion, and requires no increase in airport charges.” Heathrow Hub believe this would deliver an additional c.70,000 ATM’s, providing early capacity for up to 95mppa. Heathrow Hub assert that “there are no comparable published figures for NWR, and no information on how it might be phased.” It added that, “even if phasing were possible, the costs of site clearance and enabling works alone, before any construction even takes place, would exceed the entire cost of Phase 1 of ENR.” Mr Lowe explained the necessity of phasing in managing scheme risks:
If any of these forecasts are wrong, on passenger numbers and the preferences for where they go, if the emission targets are not met, and particularly if the noise targets are not met—because you will make them legal limits—you have spent all the money. It is all up front with the northwest runway scheme. You do not need to take the risks to still get the same benefits, but in a controlled fashion and not in a one-off fashion.
The assumed phasing of development at Gatwick consists of four phases:
Nick Dunn believed that their scheme was the “low-cost, low-risk solution” because they could phase should “should traffic come at us quicker or slower than anticipated”. He elaborated:
One reason we have phased the project is that, if demand does not present itself in the way we expect, we can manage some of the key risks and maintain our financing. That might mean that if traffic is less strong than we anticipate, because there might be an economic downturn at the point in time it started, it might not change our long-term view but in the short term we can flex our scheme. Equivalently, if demand presents itself far more rapidly, we can accelerate those schemes and meet it.
425 Airports Commission, , July 2015
426 Airports Commission, , July 2015
427 Jacobs, , 4 November 2014
428 Airports Commission, , July 2015, p 131
429 Jacobs, , 4 November 2014
430 Airports Commission, , July 2015, p 125
431 Jacobs, , 4 November 2014
432 Jacobs, , 4 November 2014
433 Jacobs, , 4 November 2014
434 Airports Commission, , July 2015, p 137
435 Heathrow Airport Ltd ()
438 Heathrow Airport Ltd ()
439 Heathrow Airport Ltd () p 23
441 Highways England, , 25 October 2016, p 31
443 Highways England, , 25 October 2016, p 31
445 Highways England, , 25 October 2016, p 30
446 Highways England, , 25 October 2016, p 6
447 Highways England, , 25 October 2016, p 31
448 Heathrow Hub Ltd ()
449 Highways England, , 25 October 2016
450 Airports Commission, , November 2014, p 21
451 Department for Transport, , October 2017, p 67
452 Department for Transport, , October 2017, p 67
453 Lakeside EfW Ltd Grundon Waste Management and Viridor ()
454 Lakeside EfW Ltd Grundon Waste Management and Viridor ()
455 Heathrow Hub ()
459 Department for Transport, , October 2017, p 52
461 NATS, , p 4
462 NATS, , p 4
463 NATS, , April 2015
464 CAA, , CAP 1215, 2014
466 CAA, , CAP 1215, 2014
467 Inquiry into Airspace Modernisation, Civil Aviation Authority ()
468 Inquiry into Airspace Modernisation, Civil Aviation Authority ()
469 Inquiry into Airspace Modernisation, Civil Aviation Authority ()
471 NATS, , 7 July 2015
472 Inquiry into Airspace Modernisation, Civil Aviation Authority ()
473 Inquiry into Airspace Modernisation, Civil Aviation Authority ()
474 NATS, , 7 July 2015
479 Airports Commission, , November 2014, p 9
480 Airports Commission, , November 2014, p 10
481 Airports Commission, , July 2015, p 326
484 Bircham Dyson Bell, , January 2014
485 Bircham Dyson Bell, , January 2014
486 Bircham Dyson Bell, , January 2014
487 The Planning Inspectorate, , December 2016
488 Eversheds Sutherland, , February 2014
489 Eversheds Sutherland, , February 2014
490 Eversheds Sutherland, , February 2014
491 The campaign group sought to argue five grounds overall, including that Lancashire County Council had failed to properly consult the public on the proposed road, that the Secretary of State had failed to properly take account of the potential impact of the project on the local otter population and had improperly taken into account National Policy Statements on other NSIP types.
492 Airports Commission, , July 2015, p 134
494 Airports Commission, , July 2015, p 114
495 Airports Commission, , July 2015, p 123
496 Jacobs, , November 2014
500 Jacobs, , November 2014
502 Heathrow Hub ()
503 Heathrow Hub ()
504 Heathrow Hub ()
506 Jacobs, , November 2014
Published: 23 March 2018