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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

 

 

 

 

 

 

 

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)

Capital Investment Plan (CIP) 2011

Our history

Avro Lancastrian, 1946

From humble beginnings, Heathrow grew to be a major world airport.

Heathrow's history