Capital expenditure and development
Regulated Asset Base (RAB)
Heathrow is subject to RAB based regulation. The RAB is intended to represent the economic value of the business.
The RAB is calculated each year by taking the opening RAB, adding capital expenditure, and deducting regulatory forecast depreciation and any proceeds from asset disposals. It is then uplifted by inflation to give the closing RAB.
CAA Q5 Decision Forecast RAB
|
£million 2007/08 prices |
CAA Decision |
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|
|
|
|
|
|
|
2008/09 |
2009/10 |
2010/11 |
2011/12 |
2012/13 |
|
|
Regulatory Asset Base |
|
|
|
|
|
|
Opening RAB |
8,978 |
9,865 |
10,804 |
11,537 |
12,022 |
|
Capital Expenditure |
1,068 |
1,193 |
1,059 |
886 |
580 |
|
Depreciation |
-409 |
-420 |
-442 |
-455 |
-488 |
|
Q4/Q5 profiling |
205 |
151 |
106 |
80 |
-13 |
|
Price profiling adjustment |
24 |
14 |
11 |
-27 |
-22 |
|
Closing RAB |
9,865 |
10,804 |
11,537 |
12,022 |
12,079 |
Before capital expenditure is added to the RAB, it must meet two sets of criteria based on the capital expenditure’s value for money as well as going through a process of effective consultation with the airlines.
Annex G
Annex G of the Q5 Settlement sets out enhanced information disclosure and consultation requirements for capital expenditure at Heathrow.
Key requirements of Annex G include:
- Publish Airport Masterplan and long term land use plan
- Publish annual Capital Investment Plan
- Consult on individual projects via Stakeholder Programme Boards
Download Annex G: Heathrow consultation and information protocol (166KB PDF)
