Heathrow Tempts Runway Opponents With $1,250 Christmas Sweetener

(Bloomberg) -- Heathrow Airport Ltd. will offer hundreds of homeowners a 1,000-pound ($1,250) festive sweetener to participate in environmental studies vital to expediting planning for its controversial 16 billion-pound third runway.

The owners of houses and farmland on which the new landing strip is due to be built will qualify for the payment in return for agreeing to a handful of visits over about two years, Heathrow Chief Executive Officer John Holland-Kaye said in an interview. The surveys are required to establish the site’s wildlife value.

“Over the next 10 days we’ll be knocking on doors,” he said. “People will hopefully say that if you’re going to come to me before Christmas and give me a thousand pounds to do nothing, I’d really like to know about it.”

Heathrow must sign up a proportion of affected households for studies into the runway’s likely impact on populations of creatures including bats, badgers and newts as it sets out on the development-consent process, Holland-Kaye said. Agricultural land and rivers must also be surveyed. While mitigation measures such as the re-creation of habitats are usually acceptable, even major construction projects can suffer severe delays.

The new landing strip will allow Heathrow to handle 135 million passengers annually, up from about 75 million this year. Many local people oppose the plan because of the impact of extra aircraft noise and pollution, while residents of villages set to be swallowed up by the enlarged airport have staged protests backed by environmental groups and celebrity campaigners.

About 750 homes face compulsory purchase and likely demolition, with Heathrow offering owners a 25 percent premium above market value plus expenses, while thousands of others will qualify for compensation payments.

Heathrow is extending efforts to pare costs, Holland-Kaye said, with the option of spanning the nearby M25 motorway using a ramp emerging as preferable to building a tunnel for the road beneath the runway.

The company has also begun work on establishing so-called supply-chain hubs in northern and western England and in Scotland as it seeks participation from around Britain in what it’s pitching as a national project.

Ferrovial SA, which has a 25 percent stake in Heathrow, won’t be excluded from the bidding, Holland-Kaye said, even though British Airways owner IAG SA, the airport’s biggest client, has said the Spanish builder’s involvement would be inappropriate. Leading U.K. firms such as Laing O’Rourke Plc, which can produce fully fabricated buildings off-site, and Balfour Beatty Plc are among prospective beneficiaries, he added.

Holland-Kaye said he’s confident Heathrow can deliver the equity and debt funding required for the expansion and that it will reach agreement on a charging plan with airlines including IAG, which has said it fears imposition of a runway tax. “We know what the average charge could be over a period of time,” the CEO said. “We are now working with airlines to come up with the best pattern. There’s a negotiation to be had.”

The government plans to publish a draft national policy statement on Heathrow early in 2017, which will be subject to public consultation before a final version is put to Parliament next winter. In the event of approval the airport would then submit its planning application to local authorities, with the transport secretary having the final right of adjudication.

--With assistance from Benjamin Katz To contact the reporter on this story: Christopher Jasper in London at cjasper@bloomberg.net. To contact the editors responsible for this story: Chris Reiter at creiter2@bloomberg.net.