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Subsidy to Birmingham airport

Another subsidy to the aviation industry has been reported – this time for Birmingham airport. An article from The Business Desk West Midlands (on 30th August) follows.

The situation is rather complex. Birmingham council has issued invitations to tender for both the runway extension and road diversion, which could cost around £70 million. It appears that  Birmingham and adjacent councils will pay for the road diversion while the airport will pay for the runway extension. But the councils are majority shareholders in the airport. There is also a pledge of £15.7m from the Regional Growth Fund.

But whatever the exact proportion of the bill is attributable to the councils, it is remarkable that with all the cuts being imposed on councils and on central government departments and the resulting cut to public services, money can be found to subsidise airport growth.

AEF believes that both airport extensions and surface transport enhancements provided for airports should be paid for by the airport operator, not the taxpayer.

Press article:

Plans to extend the runway at Birmingham Airport and realign a short section of the A45 dual carriageway adjacent to the airport are set to cost around £70m.

Birmingham City Council, on behalf of Solihull Borough Council, has submitted tenders for the projects estimating the work could cost between £56m and £70m.

It is offering contractors three separate proposals – one for each of the projects or a single mega-contract for both. The combined contract may be more preferable as it would produce greater savings.

The tender document states: “Birmingham City Council intends to improve and re-align 2km of the A45 dual carriageway adjacent to Birmingham Airport. The new road will include an upgraded carriageway and facilities for the future accommodation of public transportation infrastructure.

Birmingham Airport will, following the diversion of the A45, extend its existing runway by approximately 400 metres. An extension to Birmingham Airport’s runway is considered to be a significant element of the airport’s future development.

Currently, the length of the runway restricts the range of destinations, markets and routes which can be served directly from Birmingham Airport.

The proposed runway extension will meet the growing demand for a wider range of destinations and directly served routes to support the regional and local economy.”

The A45 Corridor Improvement project is set to begin next July and the work will include the diversion of the main carriageway, new drainage and a new pumping station, watercourse diversions, new safety barriers and traffic signs, new lighting columns and landscaping. The runway extension works are scheduled to begin in June 2013 – five years late.

The original intention was to have the scheme concluded to coincide with the start of the London Olympics. However, the recession and protracted opposition to the scheme combined to delay the project.

The tender document states the project will include the construction of a new runway and taxiway pavements, the overlay of the existing airfield pavements, the installation of new ground lighting, a new airfield sub-station, a new airfield perimeter road, a pumping station and a pollution control system and various landscaping.

The third contract option would be: “A combination of the works as described within Lots 1 and 2 with management of the interfaces and the co-ordination of activities associated with the delivery of the entire project.”

The tendering process will conclude in February next year when the council will award the contact. The combined works are expected to be completed by the end of 2014.

The decision to commit to the works was taken by the council and its partners earlier this year when the Government pledged £15.7m from its Regional Growth Fund – one of the first RGF settlements to be announced – to complete the funding package.

The runway extension will allow wide-bodied airliners to take off and land, putting direct flights to China and the West Coast of the United States within reach of Birmingham commuters and businesses.

Combined with better rail links – should the HS2 scheme be approved – the airport will also be better positioned to relieve capacity over Heathrow and the south east.

See also earlier story with local comment.