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Old 12th Dec 2011, 20:53   #241 (permalink)
 
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Silver,

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Should every UK project give a direct monetry return? Is there a direct monetry ruturn to building the M25, and its subsequent widening? No.
And again, we have been through this before, but for people picking up the thread for the first time, I will repeat, you can't compare a new airport with a road, especially as govt takes in revenue through fuel duty, which airlines don't (and won't) pay, road tax etc, and the last time we did build a new motorway, it was done as a toll road.

Yes, airports enable business links and bring tourists in, but they also export K citizens elsewhere to spend their money. You have to look at the political clamour to impose ever higher rates of APD, not just because of the green lobby, but because it is a nice little earner for HMR&C.

In most cases, UK airports have been able to fund expansion privately, although BHX has had a few quid from regional quangos for its runway extension. Now a lot of use here question how that will get a return, but we're talking 130m v 20-30-40-50+ BILLION for your Silver Island!

Sorry, but I just don't see that happening - I can marvel at the design drawings, but funding has got to come from private sources. Maybe, just maybe, the govt could act as guarantor, but I think the reality is that treasury would say it has to sort itself out, if the island sinks, then developers might come cap in hand for a bailout, and then who knows.

If you will excuse the pun, we really are in uncharted waters, hence I repeat my request - come up with some figures, knock them around a bit and let the PPRuNe Dragons decide whether or not you stay in the Den.

I'll start you off with an average PSC of 50, 100m pax pa gives you 5bn revenue. Any ideas on margins for fuel sales? %age of pax who pick up a hire car and what the airport takes? I know average shopping spend in LGW is just 5.

I'd like to suggest adding in airport hotels, offices etc, something Foster seems to have omitted. On your island, these would need deeper foundations, but if we just stick to a single terminal complex with 2 runways either side, what are the height limits? One giant rectangular based pyramid with an observation deck on level 49 and control tower on 50? How would you evacuate in the event of a refueling fire? Once you go outside this terminal area, reclaiming more land for offices is going to get very expensive.
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Old 12th Dec 2011, 21:33   #242 (permalink)
 
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Jabird

Sorry, but I just don't see that happening - I can marvel at the design drawings, but funding has got to come from private sources.
And I just don't see that happening. The basic infrastructure, like the island and rail/motorway network has to come from public funds, just like the proposed high speed rail to BHX and MAN is to be government funded. Some things are beyond private investment, which tends to look even shorter term than governments.

Beyond that, new hotels and even terminals may well be private enterprises. And I see no problem with that, just like the government provides motorways upon which private companies place (awful) service stations. (I hope new terminals will be better than Watford Gap.)


Beyond this parochial discussion, there is the problem ofnthe national debt, which has to be addressed at some point.

One way out of this dire situation, is to simply print loadsa-money and stoke inflation in order to cancel out all our debt. This will stoke inflation, but that is the whole point - ten years at 15% inflation will cancel out the government's debt and we can start again. In which case, creating money for vast projects like this can be beneficial.

But, but, but, I hear you say - borrowing money got us into this mess in the first palace. True, but if you spend the money on infrastructure, it will pay for itself. The trouble with New Labour is that they spent the money on social engineering and any non-productive project possible - all hail to the 'disadvantaged gravy train', while the productive elements in our society can either be taxed or go to hell. China, on the other hand, spent money on a massive re-engineering of the nation, and is powering ahead.

So a massive splurge of investment would effectively 'bankrupt the nation', to a point where you reset the economic system, stop printing money, and start again (the Deutsche Mark Point) - but start again with some massive infrastructure projects already completed and on-line. Sure, your private savings might be devastated, but if you still think that that 10,000 nest egg is really worth 10,000 then think again. If you are that gullible, I would strongly suggest that you spend the money now and enjoy it. Investing it is probematic in the extreme - houses are overpriced, shares are overpriced, the pound is overpriced, and so any investment is going to loose you money anyway.

Best face facts, that your 10,000 is only worth 2,000 and live with it. But lets have a 21st century aviation hub as a bonus.



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Old 12th Dec 2011, 23:04   #243 (permalink)
 
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One way out of this dire situation, is to simply print loadsa-money and stoke inflation in order to cancel out all our debt. This will stoke inflation, but that is the whole point - ten years at 15% inflation will cancel out the government's debt and we can start again. In which case, creating money for vast projects like this can be beneficial.
And wipe out everyone's savings? You're a complete genius! Are you in fact Gordon Brown?
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Old 13th Dec 2011, 20:52   #244 (permalink)
 
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Skippy

And wipe out everyone's savings? You're a complete genius! Are you in fact Gordon Brown?
You misunderstand the role and function of money. Money has no intrinsic value. I could come to power and in a fit of generosity give every adult in the country 10 million. But would this make you rich? No, of course not, it would just stoke inflation, and make a loaf of bread cost 2,000.

But this is what Blair and Brown have already done, over the last 10 years. So you think you have (say) a 10,000 nest egg - but you don't really. Like the gift of 10 million, your nest egg is a meaningless figure based upon zero industrial production, so those squirrelled savings of yours probably have little or no real value.

Check out the business section of the Sunday Times, and see how many sucessful businesses are reporting profits or new products (or reporting anything at all). None. And money based upon no real production is no better than Monopoly money.

This is another reason for the Thames Airport, and other associated infrastructure projects.

We do not need to stimulate general spending, as the government keep saying, because this will go on consumer imports (because we do not make anything) and thus enrich China, not the UK. instead we need to stimulate infrastructure projects and demand that as far as possible the materiel is derived from UK businesses.

Such a stimulus, based upon printed money, would reduce government debt through inflation, and divert money from our present unproductive investments (houses, schools, and yes, even hospitals) and place it into projects that will spur the nation on.

And I have to mention again, that if we divert the 12 billion annual overseas aid budget into infrastructure, we could pay for all of the Thames airport and associates infrastructure in less than five years. Why should we give money to India, who has a space program, when we cannot aford a space program ourselves, in addition to not having a world-class airport near our capital city.

.

Last edited by silverstrata; 13th Dec 2011 at 21:11.
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Old 14th Dec 2011, 07:18   #245 (permalink)
 
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'From what I see, there are numerous different contracts for different sections of tunnel, then again for the stations and surface work. Ferrovial are just one of many players here, all the big construction firms seem to be represented, not sure I see a connection between that and LHR.'

I was talking about the improvements to Heathrow. Ferrovial do not own all of BAA. They are however carrying out a lot of the upgrade works at the airport and would certainly be involved in further work to create a third runway and associated tunnels & terminals. This has also allowed them to become a known construction company in the UK.

To say that they would regret buying a large chunk of BAA is incorrect.

They were also a large investor in the crossrail project.
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Old 14th Dec 2011, 19:43   #246 (permalink)
 
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The last few posts have been excellent, covering topics as diverse as: printing money, inflation, the value of savings, Blair's social engineering, gravy trains (EU?), Deutsche Mark point, and India's space programme!

Fantastic, and to think that I was worried about going off topic by mentioning doubts about whether HS2 will or should be built........

Last edited by Fairdealfrank; 14th Dec 2011 at 19:45. Reason: typo: word "savings" spelt as "savoings"
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Old 15th Dec 2011, 01:48   #247 (permalink)
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Fairdealfrank

This is a paper airport, proposed so as to make it look as if Johnson is doing something and to promote his desire to PM. But no one is doing anything.

The simplest two points are:
  1. There is no money.
  2. The HS2 is designed to help quite a lot of people through an (eventually) long route. BUT that is being held back by a few MPs trying to save their seats as their voters don't want it.
How many voters/MPs are going to protest at:
  • such a major amount of rail + road + airport building across multiple areas
  • disruption in local areas during building
  • many properties (domestic and commercial) dropping rapidly in value when the move is made
  • the 'M4' corridor is what it is BECAUSE it has London and LHR on it. If LHR goes - then the 50 years of investment in the corridor loses value
  • BUT if LHR does not close - then how can you support two major airports, supposedly doing the same thing.
Never going to happen - even after Boris is PM sometime after 2020.
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Old 15th Dec 2011, 17:59   #248 (permalink)
 
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Paxboy:

This is a paper airport, proposed so as to make it look as if Johnson is doing something and to promote his desire to PM. But no one is doing anything.

There is no money.

Actually, counter-intuitively, it may be the 'lack of money' that ensures the airport is built.

CaMoron and his side-kick Cleggers will find themselves in an even greater recession in 2012 - one that will really bite and place another million on the jobless queue. Hint - take a look at the business pages, and try to spot any decent production company reporting profits; and I don't mean 'parasitic' elements like shops and local services.

What to do?

Well, one way out would be a national infrastructure programme, which is why just such a proposal was discussed recently.
George Osborne's 5bn gamble to stave off recession | UK news | The Guardian

Now Osborne is whistling into the wind if he thinks 5bn will turn the country around, it will take a minimum of 250 billion, carefully applied and not wasted as before. But where to get this money from, when times are tight?

Firstly he could claw back 10 billion a year from overseas aid.
Secondly the airport project comes with a promise of a payback on the sale of LHR.
Thirdly he is going to have to bite the bullet and go for more 'quantitive easing'.

They have already 'printed' 200 bn since 2008, but this did absolutely nothing, as it went straight to the banks and government simply to cover their bad loans. This has to be another 250 bn that is specifically earmarked for infrastructure projects, manufacturing investment, and high quality R&D - with not a Merchant Banker** in sight. (And then add to this the 130 bn saved from overseas aid and LHR)

And what infrastructure projects are most badly needed? Quite obviously, UK aviation is in need of a huge overhaul, to bring it into the 21st century - but what about that running sore known as Heathrow? ...... Hmmmm.



** Cockney rhyming slang.


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Old 18th Dec 2011, 02:21   #249 (permalink)
 
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Silver,

Without getting into a massive economic debate, the treasury is always pushed from every department to give it more money. There is a long held view in the development arena that the wealthy countries should give 1% of their GDP to developing nations. India may have a space programme, but it also has extensive poverty. I really don't want to drag on with this point, but it needs to be made clear to you as you keep repeating it, and there is no way it can be just cut to pay for this airport. And even if it was, judging by the kind of comments I get when I enter conversations with other people, the NHS would get it long before infrastructure.

Now if you think infrastructure is the way out of a debt crisis, go and look at the top 3 most indebted nations per capita (Japan, St Kitts Nevis, Greece), and I will happily debate the grossly induldgent infrastructure projects each has embarked upon, starting if you like with airports.

So I bring you back to the business case. Paxboy, I saw this as a complete fantasy in the govt 2003 White Paper, although this was by no means the first time a Thames Airport had been proposed. I never took much notice of Boris proposing it, but when Foster came out with his version, it gained a LOT more gravitas.

Foster says he has 'stakeholders' who are interested. Nothing to suggest he has actually got out and talked to airlines, but let's suppose that investors are interested.

Silver, let's go as far as saying that govt will back the road and rail infra (although I find this unlikely) - you like to knock all these other business types (we're actually quite good at retail, we export a huge amount of services, and the City, for all its faults, is still a big earner) - so let's see your business acumen.

Stop trying to put the world to rights, or trying to change foreign policy of a country you don't even live in. Airports might provide transportation, which in turn provides economic benefits, but they must stand or fall on their own merits.

So I ask again, and will keep asking, as you are the one who proposed the airport. This is Kent, not Kobe. How much would you set the PSC at, and how else would you earn revenue?

PS - Paxboy, I'd gladly debate the pros and cons of hs2, see the thread marked 'Eurostar' which went into this terrain, Jetblast might have something too.
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Old 23rd Dec 2011, 23:01   #250 (permalink)
 
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Silver,

You have gone very quiet of late, I was giving you an invitation to make a business plan, I didn't think I'd shut you up

Maybe we can carry on after the festive period, Merry Christmas everyone
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Old 18th Jan 2012, 10:21   #251 (permalink)
 
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So up for discussion then: BBC News - Thames Estuary airport plans to be examined

I guess they wouldn't be wasting time & money with a consultation if there wasn't some realistic prospect of it happening.

Now, I am not any sort of Airport or transport planning professional but from this amateur viewpoint I'd have thought that a better strategic location for the UK would be to have had THE major international airport in the South Midlands area somewhere BETWEEN London & the Midlands. I know that an airport was previously proposed in the Rugby area but I wonder whether somewhere like RAF Wyton and/or Alconbury could have been developed as a major hub to serve 2 of the UKs major citys. Some runways already in place; space to build or extend (even between the two); A1, A14 & major railway routes nearby & therefore good links in to both The City and to Brum and the north.

Keep Heathrow & Gatwick. Close Luton, Stansted and Coventry and develop a new international place in a location where it can serve a greater need.

Discuss! Its OK, I'm standing by to be flamed.

Last edited by andyy; 18th Jan 2012 at 10:31.
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Old 18th Jan 2012, 10:35   #252 (permalink)
 
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I guess they wouldn't be wasting time & money with a consultation if there wasn't some realistic prospect of it happening
They are politicians, all they need to do is be seen to be doing something. Tags will be "green", "new", "carbon neutral", "worth kajillions to the economy" and so forth. As to making Heathrow work better, well there's just too many voters that moved near an airport that's been making too much noise since 1946. Once the massive cost comes in, using the patented Scottish Parliament and Olympics public sector fantasy budgeting formula, triple the figure. Oh and that's taxpayers money incidentally when we're broke. Building a new airport in the sea in Hong Kong didn't have our uneconomic and inflated labour costs and Health and Safety was not so stringent. The price comparison does not fly.

One thing London doesn't lack is capacity, Luton and Stansted all have plenty of room and Southend is coming on stream. Runway three at Heathrow would have been financed by the private sector as well.

This is just a sop to have the same questions asked of Mapiln yet again. A massive vanity project that would be up there with the channel tunnel and HS2. Meanwhile, Oyster's gone up again....different budget if course.
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Old 18th Jan 2012, 11:29   #253 (permalink)
 
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It would be good to have a new airport somewhere most of us would like to live. I'm sure Kent and Essex are lovely places, but I prefer the sound of an airport between London and Birmingham.
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Old 18th Jan 2012, 13:57   #254 (permalink)
 
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but I prefer the sound of an airport between London and Birmingham.
...like Bedford Thurleigh, after they've cleared all the scrappage cars that didnt need to be there off the runways / taxiways following that failed government project.
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Old 18th Jan 2012, 14:28   #255 (permalink)
 
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Geographically, Rugby would make more sense than Boris, but neither really make sense for reasons already well discussed.

And Boris said the cost is 'not an issue'.

I think it is Boris! Where's Silverstrata, he must be having a field day today - maybe he'll be around later!
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Old 18th Jan 2012, 14:50   #256 (permalink)
 
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And Boris said the cost is 'not an issue'.
Be honest, once Boris is re-elected, do you think you'll be hearing more about this? It's politics, pure and simple. By the time the reality hits that the only cost effective option is Heathrow, regardless of NIMBYs who moved there knowing there was the worlds busiest international airport nearby, Boris plans to be in Number 10 so as opposed to a London plan, it becomes a UK strategy.

Behind the scenes, most Tory MPs and many Labour MPs do not believe this is is anything more than a joke project.
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Old 18th Jan 2012, 15:34   #257 (permalink)
 
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Yeah - where is good old Silver!?

Skipness is spot on as always.

Let's have some political reality here:

(1) As Skipness says, Boris is up for re-election and it's likely to be close, so, naturally, cost won't be "an issue". He may think (or be advised) that this idea will shore up the West Middlesex/North Surrey vote, but for every one who supports the idea, there will be those who have concerns about job losses.

There will be a question mark over the future economy of the above-mentioned area (and the rest of the Thames Valley as well) should the aviation and ancilliary industries up and leave, unlikely though it is. The amount of jobs generated by the aviation industry and large amount of companies that locate near Heathrow should not be underestimated.

(2) A consultation in March, an election in May - excellent timing. The first kicks it into the "long grass" long enough to be quietly ditched after the second. Boris can say that he has influence over the government and that Ken clearly does not.

(3) The government realises that its "no new runways in the south east" policy is unsustainable and may be softening the public up for the desperately needed U-turn.

It works like this:
(a) the consultation spells out the obvious;
(b) the government welcomes its conclusions;
(c) the government accepts that its "no new runways in the south east" policy is unsustainable and is holding the country back;
(d) the government caves in to the inevitable and "reluctantly" accepts that Heathrow expansion is the only viable alternative;
(e) transport Secretary Justine Greening gets promoted out of the way.

(4) Labour has seen this coming and so is now against Heathrow expansion so as to oppose the government for the sake of it.


The government often repeats the mantra of "better airports not bigger airports". In the case of Heathrow, bigger IS better, because it is the only workable way to deal with an airport that has been allowed to operate at virtually 100% capacity.

Are we talking about a "new hub airport for the south east" or specifically about an estauary airport? If it's the latter, is it the artificial island south east of Southend, or the reclaimed land north east of Chatham? If we are talking about the former, then the only sustainable location is immediately north of Heathrow, between the A4 and the M4.

Finally, will this white elephant be built before the other one (HS2)?
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Old 18th Jan 2012, 21:22   #258 (permalink)
 
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Getting back to aviation.

I think Boris Island is a stupid idea.

Reason 1 Southend,

Reason 2 Manston

Reason 3 It's just a simply 80110cks idea,
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Old 18th Jan 2012, 23:10   #259 (permalink)
 
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Old 18th Jan 2012, 23:14   #260 (permalink)
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Never going to happen.

Just think of the number of votes of every householder in the M4 corridor whose property will be devalued?

Just think of the behind the scenes lobbying power of every business in the M4 corridor whose airport will disappear?

How many companies with regular international links will consider that moving away from the UK is better than trying to move across London? They would be going to a rather large building site where the new business parks are being hurriedly put together and an airport that may, or may not, meet all the hype for connections and where are all the new houses for the staff who are going to have to be paid to relocate?

Never going to get off the paper.
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