Hotel tycoon Surinder Arora has stepped up his audacious and surprising £14.4bn bid in an attempt to secure the rights to build the third terminal at London Heathrow Airport.
The expansion of Britain’s largest airport was initially approved by a Parliamentary vote in June, from which it was expected that Heathrow Airport Limited (HAL) would be awarded the contract, after submitting a detailed proposal costing up to £31bn.
However, the Arora Group, headed up by Mr. Arora himself, have put forward plans that “could save up to £16.7bn when compared to the costs of Heathrow Airport Limited’s own plans” on the terminal building alone.
First reported by The Sunday Telegraph, Mr. Arora’s 11th hour efforts are designed to “wrestle control of the expansion from the current airport operator”, thereby preventing HAL from possessing a monopoly over various forms of income such as landing fees.
The Sunday Telegraph reports that it expects the Arora Group to “make a rival planning application to the one tabled by HAL”, after the finer details of the Arora proposal were revealed earlier in the year.
Mr. Arora, the largest single land owner around Heathrow airport, claims that his plans will cost less than half of those of HAL, but that he only wants to build the new terminal building if “he can operate it and be entitled to a share of the landing fees”.
The steps taken come as a great surprise to many, who believed that the high costs of acquiring a development consent order (a key step in the planning process) would have put off any rival bids. The DCO could stretch to costing hundreds of millions of pounds alone.
However, the Civil Aviation Authority recently published documents that suggest that the planning authorities may consider multiple DCO’s, presenting an opportunity to the Arora Group.
HAL has encouraged outside companies and entrepreneurs to be involved in developing ideas and pitches for the new scheme, but has stopped short of allowing a third party to build and operate the new terminal, something Mr. Arora has stated clearly he wishes to do.
In a statement, a HAL spokesman said that the Arora Group’s plans had not been scrutinised sufficiently by the public and were “laced with financing and delivery risk and would catastrophically degrade the passenger experience”. The same spokesman went on to deny that Mr Arora was being frozen out of the planning process.
Mr. Arora said: “Heathrow is the most expensive airport in the world and is run for the benefit of its shareholders. We, along with others, are calling for full transparency of Heathrow Airport Limited’s plans so that a like for like comparison can be made. We are confident ours will result in a better customer experience for less cost.
“We want passengers to be at the heart of our plans and the current monopoly at Heathrow, which over-charges airlines and in turn raises fares for passengers, is not the right model for the future. Heathrow needs competition and innovation”.
No timeline has been set for when the Arora Group proposal will be formally heard.
