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Stansted expansion on shaky ground as Ferrovial buys BAA

Standstead planned £2.4bn second runway and new satellite building are predicted to become early casualties of the Ferrovial purchase of airport group BAA, according to consultants this week.
'There's no way Ferrovial will want to fund the planning battle or the fight with BA and Virgin over the subsidies the airlines will be asked to pay to finance the construction,' said one source unwilling to be named this week.Ferrovial in its recommended final offer for BAA, accepted on Tuesday, also said it has already developed an alternative capital expenditure plan for Stansted.Ferrovial's offer is for 950.25p per share, valuing BAA at £10.11bn. A rival bidder led by Goldman Sachs Infrastructure Group has until 16 June to announce its intention to make a firm offer for BAA or confirm it will not offer before the Ferrovial takeover can go through.Senior BAA staff were talking urgently to key construction suppliers this week to calm nerves.Heathrow Airport managing director Tony Douglas and BAA divisional director for capital projects Mick Temple began informal briefings on Tuesday to keep suppliers informed of events and encourage them to maintain momentum on the company's multi billion pound investments, particularly Terminal 5.Ferrovial in the guise of the Airport Development & Investment Consortium, has committed in its final offer to 'undertake the published capital expenditure programme of BAA in the UK. It says it will borrow £2bn to fund that over the next five years.BAA is investing £1.35bn during 2006/7 and had plans to invest £9.5bn at its London airports over the next 10 years (see box).'The devil is in the detail,' said one supplier. 'We are waiting to see how much of the 10 year plan Ferrovial will undertake.'The Office of Fair Trading is currently investigating the possibility of forcing the group to break up. But Ferrovial said in the final offer that it 'plans to keep together and focus on BAA's UK airports.Jackie WhitelawRelated links:Today's top stories

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