BAA PLC TO TEAR UP THEIR FRAMEWORK AGREEMENTS WITH THEIR CONSTRUCTION SUPPLY CHAIN

Baa Plc to Tear Up Their Framework Agreements with Their Construction Supply Chain

Baa Plc to Tear Up Their Framework Agreements with Their Construction Supply Chain

Introduction

BAA Airports Ltd. is the owner and operator of six British airports and the operator of several other airports worldwide, making the company one of the largest transport companies in the world. BAA stems from British Airports Authority and it is owned by a consortium led by Grupo Ferrovial, a Spanish firm specialising in infrastructure. The company's head office is located in the The Compass Centre on the grounds of London Heathrow Airport in the London Borough of Hillingdon.

BAA makes money from charging landing fees to airlines and increasingly from retail operations within those airports. BAA does not operate all UK airports - many are in the ownership of local authorities or other corporations.

BAA was once a constituent of the FTSE 100 Index but is now owned by ADI Limited, an international consortium, which includes Caisse de dépôt et placement du Québec and GIC Special Investments, that is led by the Spanish Ferrovial Group.

The construction of the Heathrow Airport Terminal 5 (T5) in London was approved by the Secretary of State on 20 November 2001, after the longest public inquiry in British history (46 months).

Heathrow management

BAA has garnered criticism for its handling of Heathrow, namely its predominant placement of shops rather than extra security aisles. After much criticism for this, BAA has now removed some shops to provide extra security lanes. The Economist writes that retail is important for BAA at Heathrow because, by law, landing charges are much less than those of similar-scope airports and retail shops help make up the difference.

The planning process itself cost nearly £63m over a period of 14 years. This cost was borne mostly by the British Airports Authority (BAA) and British Airways, the two main proponents of the project.

In 2007 it was announced by the Transport Secretary Ruth Kelly that there would be a sixth terminal at Heathrow as well as a 2,200m third runway and this will be underway by 2020. Public consultation on the proposed project is currently underway. Construction of the new terminal started in September 2002; phase one of the project was completed and opened in March 2008 with the second phase opening in 2011. The project required an estimated investment (mostly from BAA) of over £4.2bn. "Heathrow is one of the busiest airports in Europe and passenger numbers are expected to grow after the expansion."

Phase two of the project will involve the construction of a £400m second satellite terminal building adjacent to the original T5 and also the associated aircraft stands and service infrastructure to accept A380 size super-jumbos.

Heathrow is one of the busiest airports in Europe and passenger numbers are expected to grow by 27 million a year as a result of phase one, and then by a further three million a year after phase ...