Birmingham Airport’s long-awaited runway extension moved a step closer after a crucial part of a £65 million funding package was confirmed.
But even with a £15.7 million contribution from the Government’s Regional Growth Fund toward the cost of diverting the A45, airport bosses are reluctant to confirm that a decision to give the 400 metre extension the final go-ahead is imminent.
The airport board will discuss the matter next week, but a source refused to confirm that the meeting will decide then to approve the scheme.
However, directors of the airport appear to be edging closer to a decision that could see the longer runway in place by 2014.
A spokeswoman said: “The legal paperwork supporting the tendering process for the runway extension scheme is in the final stages of agreement prior to the tender stage starting.”
The airport was one of five bids by companies and partnerships in the West Midlands to be successful in the first round of the fund.
The schemes promise to directly create 6,193 jobs in the region, with 34,669 more posts likely to be created in associated supply chains.
The others which have won funding in the West Midlands have been put forward by Jaguar Land Rover, Alstom Grid UK, Bosch Thermotechnology and Prince’s Regeneration Trust.
Birmingham City Council has agreed to underwrite up to £17 million toward the £32 million cost of moving and improving the A45 Coventry Road.
But the airport’s private sector shareholders, the Ontario Teachers Pension Plan and Victorian Funds Management, are yet to approve arrangements to raise the remaining £33 million cost of extending the runway.
The longer runway will allow non-stop direct flights from Birmingham to China, India and the west coast of America for the first time – enabling Birmingham to compete directly with the London airports and Manchester Airport.
Coupled with the Government’s decision to scrap the third Heathrow runway, and the likelihood of high speed rail services running from Birmingham Airport by 2026, the longer runway is expected to provide significant economic benefits by making it easier for global business to access the region.
Birmingham Chamber of Commerce, which backed the RGF bid, says that 10,000 new jobs could be created by improving the A45 and M42 corridor.
Chamber chief executive Jerry Blackett said: “This upgrade will be an enabler of the M42 corridor as an engine for growth. It is a vibrant part of the local economy and this upgrade is long overdue.
It will also bring about improvements to Junction 6 of the M42, which is a pinch point, and it will also allow the airport to develop its runway.”
Under the scheme, the A45 will be made a three lane highway, with public transport improvements.
Birmingham Airport chief executive Paul Kehoe said: “The Regional Growth Fund investment in the A45 transport corridor is excellent news for all the businesses operating along the corridor between Birmingham, Solihull and Coventry.
“The economic potential of this corridor is well recognised with the business parks, the NEC, Jaguar Land Rover and the airport all dependent upon the future capacity of the A45 transport corridor.”
Mr Kehoe points to the recent success of Newcastle Airport, where a direct service to the Emirates coincided with a £200 million increase in trade between the North-east of England and Australasia since the new route was launched in 2007.
With a high speed rail service linking Birmingham Airport to Old Oak Common near Heathrow, and access to London’s Cross-Rail line, Mr Kehoe forecasts that the travel time from Birmingham to the capital could be as little as 31 minutes, “placing Birmingham in zone 4 of the underground map”.
Forecasts of huge economic benefits from the runway extension are being challenged by Friends of the Earth.
Birmingham spokesman Joe Peacock said it was wrong that state aid was being used to assist a commercial operation.
Mr Peacock added: “Yet again the airport is relying on huge amounts of corporate welfare to enable it to meet its growth ambitions. The airport claims to be good for the economy but puts its hands into taxpayers’ pockets time and again.
“The aviation sector pays no tax on its fuel and no VAT on the sales of tickets and planes but that is not enough, it needs our help to build the infrastructure from which it plies its trade.
“What is also worrying about these bids is they have been made in secret and are not in the public domain, he added.
“We would like to see exactly what predictions the Chamber and the airport have set in these bids and then in a number of years time we will be able to analyse them to see just exactly if they have delivered or not.”
A total of £450 million has been spent across the country in the first round of the Regional Growth Fund.
The Government says 27,000 jobs will be directly created.
Meanwhile, the rest of the Government’s £1 billion fund will be allocated later following a second round of bids, which have now started.