Good news is at a premium as the West Midlands faces fallout from the gravest economic crisis in recent times, but confirmation that Birmingham International Airport’s runway extension will finally go ahead is certainly reason to celebrate.
A year ago it seemed doubtful that this highly desirable project would get off the ground in the foreseeable future. The problem facing the airport company was simple enough: while a longer runway makes perfect sense for the regional economy, the finances for the airport’s private shareholders never really stacked up.
The business case for the £120 million runway extension was only ever marginal and collapsed entirely when the extent of the recession, the credit crunch and the unwillingness of banks to lend money at reasonable rates of interest became clear.
What has happened during the past 12 months is a relatively rare example of the seven West Midlands councils working together for the common good. Rarer still, their deliberations remained private and damaging leaks designed to stir up tribal differences were avoided.
To a certain extent, sacrifices have been made on all sides. The councils will forego dividends from the airport company as part of their contribution to closing the funding gap. Birmingham and Solihull councils have gone a step further by agreeing to fund a £32 million diversion of the A45 – a seemingly intractable sticking point a year ago.
The airport company has also shifted its position, first by agreeing a slightly shorter extension at a cost of £65 million for the first phase and secondly by convincing major private shareholders that such large investment at this difficult time is a good idea that will reap rewards in the future.
Taken together, the positive discussions are a fine example of what can be achieved at a city region level and only go to rub salt into the wounds arising from parochial differences that put paid to a Greater Birmingham and Black Country Local Enterprise Partnership.
Based purely on terms of economic regeneration, a £65 million runway extension has to represent exceptional value for money. It means that from 2014 Birmingham will be able to offer non-stop flights to cities in fast-growing India and China as well as the west coast of America. This should place BIA, which operates at less than half capacity at the moment, into a new league while promoting Birmingham as a world destination.
The extension is of even greater significance given the abandonment of Heathrow’s third runway and the possibility of a high speed rail link between Birmingham and London.
This means that BIA can become a highly plausible gateway into the UK, with the capital less than 50 minutes away by train.
A word of caution lingers, however. Airlines will not automatically come to Birmingham simply to take advantage of a longer runway – the new facility must be marketed like never before.
Having said that, now is the time for celebration.
To quote Birmingham City Council leader Mike Whitby, a rare piece of good news amid all the gloom.