Heathrow will start investing significantly in a detailed masterplan for a new runway ©Heathrow
Heathrow will start investing significantly in a detailed masterplan for a new runway ©Heathrow

Heathrow to sign contracts worth £150m over coming year

27 June 2018

Heathrow Airport plans to sign contracts worth £150m over the next 12 months after Parliament approved construction of a third runway.

Speaking to SM, John Holland-Kaye, chief executive of Heathrow Airport, said the airport would start “investing significantly”, beginning with the detailed masterplan and the ground investigation for the new runway.

He said: “That will create a significant amount of jobs. In fact we think we’ll create about 900 jobs in the next 12 months alone and let contracts for about £150m across the UK.”

In a controversial vote on Monday, the House of Commons voted in favour building a third runway at Heathrow, a major milestone in what has been a decades long campaign to expand the airport.

For Heathrow the procurement process started as early as October 2017, after the government publicly announced it supported the airport’s third runway proposal. In an update given to SM on the sidelines of the Public Sector Show yesterday, Holland-Kaye said the airport was making progress on developing regional supply chain hubs.

The airport has now shortlist of 65 possible locations for its regional supply chain hubs, and Holland-Kaye said he had been “really impressed by some of the bids” submitted to run them. “Some of them, a little bit like X-factor, we’ll be encouraging to collaborate because in some areas we have several complementary bids from different organisations,” he added.

The hubs will be where large parts of the construction for the runway will take place, before the parts are transported and assembled at Heathrow. The aim is to reduce on-site disruption caused by construction and expand the economic benefits of Heathrow’s procurement spend across the country – particularly to Scotland and the North of England.

“These logistics hubs don’t just serve a particular town, they serve the whole region and bring together the supply chain from that area, so they’ll be a catalyst for growth across quite a large area,” said Holland-Kaye.

Holland-Kaye said while the economic implications of Brexit helped secure parliamentary approval for airport expansion, it had not had a major impact on how the supply chain for the third runway was being structured. “[Heathrow is] not bound by OJEU rules so we can have a predominantly British supply chain,” he said.

He added the airport would also “play our part” in promoting the British supply chain internationally.

“Every other airport in the world comes to see what we are doing and we play an active role, when Chinese airport authorities or Korean or anyone else comes to visit us, in introducing them to parts of our supply chain to help to boost the international growth of British companies,” he said.

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