Economic case for Heathrow expansion 'flawed'

25th July 2008

... Comments

An article in the RTT needs little to be added to: Economic case for Heathrow expansion 'flawed' (From Richmond and Twickenham Times) The Friends of the Earht have commissionned a report to the Stockholm Environment Institute was commissioned: see their press release here. The report was written by Elizabeth A. Stanton and Frank Ackerman from the Stockholm Environment Institute - US Centre. A link to the full report is here:www.foe.co.uk/resource/reports/consumer_surplus.pdf From the RTT site:

The report found three major flaws in the assessment of these benefits and called for an independent review:

The passenger demand projections are uncertain - for example they rely on fares falling because the cost of oil per barrel is predicted to fall from an assumed $65 in 2006 to $53 in 2030. Oil is currently around $130 a barrel and experts predict will not fall below this before the end of 2016.

Foreign passengers changing planes in the UK are counted as a benefit to the UK economy - but this is against HM Treasury guidance on project appraisal. In 2005 nearly 30 per cent of Heathrow passengers were travellers simply changing planes.

It assumes doing nothing is the only alternative to airport expansion ignoring alternatives with less environmental impact like switching short haul passengers to rail travel, investing in video conferencing or limiting transfer passengers.

This comes as little surprise, after the government commissioned a study on the future of transportation by no one else than the former BA boss: The Eddington Transport Study. Strangely, although it's successful everywhere else in Europe, he did recommend against high speed link (see my previous post: Finally, high speed train gets national coverage).

Just to repeat myself: looking at Heathrow in isolation is at best misleading since there are 4 other international aiports in London (plus spare capacity in Portsmouth, Midlands, ect, all easily reachable by high-speed train if there was any) and it is dishonest because it doesn't look into alternative transport modes. But then, the DfT, BA and BAA are forming a ménage a trois to protect the commercial interests of BA and BAA...

About the Author