CAA review finds Heathrow ‘wasted’ money and…

CAA review finds Heathrow ‘wasted’ money and was “inefficient” as costs of 2 tunnel refurb projects costs spiral
2020-09-24 09:12:00
The CAA’s economic performance review concludes that Heathrow has “wasted” money on two ongoing tunnel refurbishment schemes and acted inefficiently.  The cost overrun of both schemes combined is estimated at £212.4M, although the CAA suggests that those costs could be inflated further by the time work is completed.  Costs on the cargo tunnel job between Terminal 4 and the Central Terminal Area have soared by £152M, from its approved £44.9M budget to the current final cost of £197M, the report reveals.  The cost of upgrading the main vehicular tunnel to Terminals 1, 2 & 3 has risen by £60.3M from an approved budget of £86M to £146.3M. On the cargo tunnel, the CAA states that “there is clear evidence that the actions of HAL may have directly contributed to wasted spending or lost benefits”. The delays have lead to a loss of benefits to consumers. Heathrow could have been more efficient in managing its work contractors. The CAA will now assess whether to remove costs associated with the tunnel refurbishments from HAL’s Regulated Asset Base (RAB) – which effectively means HAL would have to pay for cost overruns, rather than charging airlines. .Tweet   Heathrow ‘wasted’ money as tunnel refurb costs spiral 24 SEP, 2020 BY ROB HORGAN (New Civil Engineer) Heathrow Airport Ltd (HAL) has “wasted” money on two ongoing tunnel refurbishment schemes, the aviation regulator – the CAA – has ruled. A Civil Aviation Authority (CAA) economic performance review concludes that HAL acted “inefficiently” on refurbishments of a cargo tunnel and road tunnel servicing its terminals. The cost overrun of both schemes combined is estimated at £212.4M, although the CAA suggests that those costs could be inflated further by the time work is completed. Conclusions made in the CAA’s September 2020, Economic regulation of Heathrow paper  draw on independent analysis by Arcadis and Institute for Fiscal Studies. The paper can be seen at: CAA  Economic regulation of Heathrow: working paper on the efficiency of HAL’s capital expenditure during Q6 CAP 1964 Costs on the cargo tunnel job between Terminal 4 and the Central Terminal Area have soared by £152M, from its approved £44.9M budget to the current final cost of £197M, the report reveals. Meanwhile, the cost of upgrading the main vehicular tunnel to Terminals 1, 2 & 3 has risen by £60.3M from an approved budget of £86M to £146.3M. On the cargo tunnel, the CAA states that “there is clear evidence that the actions of HAL may have directly contributed to wasted spending or lost benefits”. It adds: “The Cargo Tunnel project faced significant co

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