By Amit Roy
BRITISH Indian Surinder Arora, one of the most dynamic entrepreneurs in the country, has put in a bid to build the third runway and new terminal at Heathrow, it has been confirmed.
This is the most ambitious project yet for Arora, chairman of the Arora Group which won the Business of the Year accolade at Eastern Eye’s Asian Business Awards in March in London this year.
“We are more than confident,” he said. “I have never taken on something I couldn’t do. We have been spending tons of money and if I didn’t feel we have any real chance of making this a success why would I or anyone else do it?”
“What we can deliver is building world class facilities but making sure we achieve value for
money,” Arora said.
The businessman must be considered a serious player to take on one of the biggest infrastructural projects Britain will witness in the next 20 years since he has built a powerful team and also already received the support of influential backers.
One of them is Willie Walsh, chief executive of British Airways’ owner IAG, who welcomed Arora’s scheme.
He said: “The government should look closely at Arora’s proposal as it would significantly
reduce costs.”
This is significant because British Airways is Heathrow’s biggest customer.
In an in-depth interview with Eastern Eye, Arora, who owns 15 hotels, mostly around Heathrow, Gatwick and Stansted and is a major landowner at Heathrow, said he was confident he could do the job better and much cheaper than his main rival – Heathrow Airport Ltd (HAL).
Compared with HAL’s cost estimate of £17.5bn, he reckons he could trim perhaps £6.7bn off that figure.
He accused HAL of trying to exercise a monopoly and said competition would be good for the passenger and the airlines, whom he had consulted before submitting his plans to the government.
The Department for Transport has estimated a new runway at Heathrow would bring economic benefits to passengers and the wider economy worth up to £61bn, and create as many as 77,000 additional local jobs over the next 14 years.
Arora, who was born on September 22, 1958 in Sultanpur near Jalandhar in Punjab, came to Britain in 1972 as a self-confessed unruly teenager and began his career by working as a waiter in a hotel that he subsequently bought.
He is today the chairman of the Arora Group he founded in 1979. “I remember making a statement about 15 years ago and at that time I said that over the next three to four decades we will need three runways in the south-east – one at Heathrow, one at Gatwick and one at Stansted and everyone in the room laughed,” he recalled.
“I don’t have a change of view. If the UK wants to stay ahead we need to make sure that we also have the access and the transport links to make that happen.”
He added: “We have the best team on board from the consultant’s point of view led by Bechtel – a huge American organisation.
"They are one of the largest infrastructure project companies in the world and they have done things like the Channel Tunnel and lots and lots of airports around the world. So here is an organisation that knows exactly what they are doing.”
He said: “In the late 1990s when I knew nothing about hotels and when I came up with the idea of crew hotels for British Airways, everyone, including British Airways, said: ‘We have no confidence in you, Surinder, what do you know about building hotels or running hotels?
"And I said: ‘Guys, I am not going to do it myself but what I will be doing is bringing the best team on board’ – and that is exactly what we have done here.”
He elaborated: “I have also got an advisory board led by Rod Eddington, the previous CEO of British Airways – before that he was CEO of Cathay as well as non-executive chairman and is currently also of JP Morgan for Australia and New Zealand.”
He went on: “The other two advisers I have include Mike Clasper, previously the CEO of all the BAA airports, Heathrow, Gatwick and Stansted –the last CEO of Heathrow BAA before it was sold to the Spaniards and then he became chairman of HMRC.”
“And then I have Rob Webb QC – he was the legal counsel with British Airways – these are all people very well known in the industry.”
He was critical of HAL management: “Heathrow always assumes it is in their gift to do any
expansion at Heathrow so they basically want to keep the monopoly to themselves. Every time we come up with something – whether it is to do with car parking or anything else – Heathrow believes it is in their gift to keep the monopoly themselves.”
Arora said: “If you look at other airports round the world, including Mumbai, people have gone into partnership and the private sector has put the money in. We sold Heathrow but the American government owns most of its airports.
“We are where we are, that is something we cannot change, but what they do is they encourage either airlines or other private organisations to build and invest in terminals infrastructure and that creates competition.”
He pitched his main argument: “We are saying in the 21st century, this is a once-in-a-lifetime opportunity that we should now look at. Should we have competition at Heathrow, should we introduce more than one party to it? It is a huge business. Should we get someone else coming in?”
He remembered: “Even when I opened my first hotel it was always my dream: ‘Can I do a four star hotel with five star service at three-and-a-half star prices?’ If I can do that then I will always be successful– and that is exactly the same thing here.
"We feel we can build much more competitively and better than Heathrow can.”
He spelt out his trump card: “We are the largest landowner where the terminal expansion is going and the reason we are able to get between £5.5bn and £6.5bn saving is by talking to the airlines – the airlines should be our customers.”
He explained: “Getting them around a table, tell us what works for you, what is the length of the runway, the position of the runway? They came up with certain things – ‘we don’t need a satellite terminal on the other side of the A4 and link via an underground transit system. That is not going to be good for the passengers coming in, checking in, we would like the satellite terminal near terminal 5.’ We have designed the building with inputs from the airlines.”
A Department for Transport spokesperson told the BBC: “The government has made clear that it believes a new north-west runway at Heathrow is the best scheme to deliver the economic and connectivity benefits this country needs.
“A consultation on a draft airports national policy statement closed on May 25 and we are
currently analysing the responses, and will set out our next steps in due course.”
