Birmingham International Airport’s long-awaited runway extension looks certain to get the final go-ahead within weeks.
BIA board members are set to approve a funding package for the ambitious scheme which will allow Birmingham to compete with Manchester, Heathrow and Gatwick by offering non-stop flights to cities in China and India and to the west coast of America for the first time.
The extension, a slightly scaled down version of an original proposal, is likely to cost about £65 million instead of £120 million.
Airport bosses, who only nine months ago said they couldn’t afford to build the runway and stated there was only a marginal business case for doing so, have cut costs by agreeing a slightly shorter extension and hatching a deal over diverting the A45 Coventry Road.
Birmingham and Solihull councils will share the £32 million cost of moving the A45, rather than tunnelling the road under the runway.
At 350 metres the extension is about 60 metres shorter than originally planned.
But BIA believes the alternative proposal will still deliver 95 per cent of the original capacity, triggering millions of pounds in economic benefit for the West Midlands from faster flights to the rest of the world. The final part of the new runway will be added at a later stage when funding allows.
The decision follows months of discreet negotiations between the seven West Midlands councils, which own just under half of BIA shares, the airport’s management company and private sector shareholders the Ontario Teachers’ Pension Fund and Victoria Funds Management.
Part of the strategy to close the funding gap involves the seven councils accepting lower annual dividend payments from the airport in future. Officially, BIA remains optimistically cautious that approval will be given at the October 28 board meeting.
A spokesman said: “We are very close, but it would be premature to comment.”
However, sources close to negotiations said they expected the tendering process for the extension to begin in November – an outcome which in itself will give a welcome boost to the Midland construction industry. The completed runway is likely to be operational by 2014.
The airport spokesman paid tribute to Birmingham Council leader Mike Whitby, a key figure in the talks who knocked heads together behind the scenes.
“He has certainly played a major role, inspiring everyone and keeping them going. His passion has been unabated.
“From the point of view of the West Midlands operating on the world stage it is essential that we get the runway extension in place.”
Coun Whitby (Con Harborne), a member of the BIA board, described the extension as “a splendid piece of good news amid the present gloomy economic situation”.
He added: “The runway will get Birmingham to the economic hot spots of the world. And I envisage the extension being built very shortly. Approval is imminent.”
He said talks between the councils and BIA had been tough, but ultimately fruitful.
Coun Whitby said: “I think we have done enough work together to ensure the runway goes ahead.
‘‘We have reassured everyone involved that there is a way forward. Adequate funding is there.”
The council leader said his ambition was to see the giant A380 Airbus fly from Birmingham regularly. The new plane, capable of carrying between 550 and 850 passengers, would revolutionise Birmingham as a destination airport, he added.
BIA and council leaders are also gambling on BIA picking up business following the cancellation of Heathrow’s third runway.
The likelihood of a high speed rail link between Birmingham and London will enable BIA, which is only operating at less than half of its capacity, to drum up new business by luring passengers from overcrowded Heathrow, according to Mr Kehoe.
The airport already has planning permission for the runway extension which lasts until 2016, although an application to move the A45 still has to be made and approved.
The proposal has come up against strong opposition from Friends of the Earth, which described the longer runway as a waste of money.
In November last year, BIA chief executive Paul Kehoe said he couldn’t see how the extension could be funded.
A promised £25 million grant from Advantage West Midlands failed to materialise and Mr Kehoe conceded there was no clear business advantage to the airport in pushing ahead with the runway.
* A £12.8 million hotel is to be built at Birmingham Airport after plans were given the green light.
The 200-bedroom Travelodge will be the second largest hotel within the perimeter of the airport and is due for completion in summer 2011.
The deal was brokered by design and construction specialist Anglo Holt and the this latest development brings the total number of Travelodges completed or under construction by the West Bromwich-based firm to 49.