Decision to delay new capital works programme by one year leads to drop in 2013-14 budget
Construction companies working at Heathrow airport are set to lose out on up to £100m worth of work because BAA is to delay the start of its next capital works programme for one year.
The current five-year development cycle that is due to end in 2013 and is worth around £4.5bn was to be replaced on completion by a new phase matching the current average spend of £800m-£850m a year. However, the new programme will now be delayed by a year, with a lower figure of £735m spent in the interim year.
This follows a decision made by the Civil Aviation Authority (CAA) to bring Heathrow’s capital works programme in line with new legislation, the Airport Economic Regulation Act, which has itself been delayed.
One major consultant said: “Any reduction in spend is not helpful. It will be the main contractors that will be hit the hardest as competition increases.”
However, BAA insists that, despite the reduction in spend on capital projects over the year, there will still be significant investment at the airport. A BAA spokesperson said: “£735m is still a sizeable chunk of money to be spent and there will still be a significant amount of work being competitively tendered that year.”
Phil Wilbraham, development director at BAA, said varying levels of work at different stages over the five year period could explain the reduction in spend. He said: “We will be spending £1bn this year and next because there is so much work to be done. In the added year in 2013/14 there will be a lot of finishing off at T2 and the T3 integrated baggage system.”
The £735m that is available for the year will be split into three chunks:
- £435m will be for projects already started in the main five-year period, such as phase 1 of the eastern campus
- £90m will be spent on the Crossrail project
- £210m is for new projects - it will be these new schemes that will be opened up beyond BAA’s frameworks to the wider market.
Who might lose out? Heathrow’s key firms
- Laing O’Rourke with Ferrovial Agroman
- Morgan Est
- Taylor Woodrow
- EC Harris
- Turner & Townsend
- Mott MacDonald
- Jacobs with Cyril Sweett