Bankers being hired for £3m to tell Government if economic case for Heathrow third runway stacks up


Bankers are being recruited by the Government for at least £3 million to advise on the strength of the economic case for a third runway at Heathrow.
Ministers have also admitted that the taxpayer could be left footing a bill for the controversial plan to expand the west London airport and are seeking guidance on “the Government exposure to programme costs and risks”.
The Department for Transport has put out a tender to hire an “experienced banking adviser” on the proposed scheme.

The move has raised eyebrows given that Chancellor John Healey has already given the £49 billion airport development strong backing,
He stressed last month: “We have given the go-ahead to this project quite simply because the economic case stacks up and will help bring growth.”
But the DfT, in its tender explains that “expansion presents significant financing, affordability, delivery and regulatory challenges”.
New Prime Minister Andy Burnham has also raised doubts about the third runway, refusing five times to back it during a recent interview.
Heathrow and Sir Keir Starmer’s government argued that a new runway could boost the economy by tens of billions of pounds.
But critics say their sums are flawed and in fact the economic benefit would be limited, while there would be more pollution, more noise for local communities and it would be a blow to meeting the UK’s legally-binding climate change targets.

It its tender, the DfT is seeking advice on:
* The financeability and financial deliverability of Heathrow expansion
* Affordability, risk allocation and investor confidence
* Measures to improve financeability and reduce delivery risk
* Government exposure to programme costs and risks
* Debt and equity market appetite and financing conditions
* Delivery structures, governance arrangements and commercial models
* Emerging financing, commercial and regulatory issues
The contract for the new banking adviser, who will be required to deliver a strategic financeability assessment every six months, is for three years at a cost of around £3 milion, with an option to extend the work for one more year.
Twickenham MP Munira Wilson said: “It beggars belief that Government is only now investigating whether taxpayers' money is at risk thanks to its support for Heathrow expansion.”
The new runway, which is strongly opposed by London Mayor Lord Sadiq Khan, would increase the west London airport’s capacity to 756,000 flights and 150 million passengers a year.
The development, which is already estimated to cost £49 billion with terminal and other improvements, is believed to have been hit with years of delays.
Airlines say it would be the most expensive new runway project ever and would involve moving the M25.
The Government’s own global warming advisers have warned that there is “no credible pathway” for a Heathrow third runway within the UK’s legally-binding climate targets under current policies for cutting aviation emissions.
A DfT spokesperson said: "We are procuring an expert financial adviser to support the Government in moving forward with a framework for Heathrow expansion that delivers a third runway affordably.”
