THE seven British local councils which own the Birmingham Inter national Airport (BIA) are to receive £80 million sterling from Aer Rianta/NatWest Ventures if the consortium buys a 40 per cent stake in the airport.
According to a confidential memo circulated to senior members of the councils, Aer Rianta and its partner will pay £80 million for the 40 per cent of BIA and will also contribute £256 million towards the £400 million sterling cost of expanding the airport.
Aer Rianta was selected as the preferred bidder to acquire a 40 per cent stake in BIA last year, and is currently in negotiations with the airport's owners. But Solihull councillors have yet to decide whether to grant planning approval for the airport's expansion plans.
The memo confirms Aer Rianta will almost certainly pull out of the deal if BIA experiences any delays in winning approval for the first phase of its expansion programme. "Aer Rianta are most unlikely to proceed with the investment if there is any uncertainty over the planning position," the confidential memo states.
A spokesman for BIA said yesterday the airport was "unable to comment on an alleged leaked document" while Aer Rianta also declined to make any comment.
But other aviation industry sources disputed the figures contained in the document. One source said that Aer Rianta and its partner will pay between £40 million and £45 million rather than £80 million for the stake in BIA.
Aer Rianta and NatWest Ventures are expected to contribute to the expansion of BIA if a deal is agreed but the amount involved is thought to be much lower than £256 million, the source added.
The 20 page memo - circulated recently to the chief executives of the seven councils which own the airport and a small number of senior council figures - states that the seven councils will receive a total of £80 million from the deal.
But, following the deal, they will subsequently reinvest £16.5 million in the airport's expansion.
The document also reveals that Aer Rianta has agreed to have no involvement with BIA's main competitor East Midlands airport should it become a minority shareholder in Birmingham airport.
However, the deal, which would have been Aer Rianta's first investment in a foreign owned airport, is now in serious jeopardy. Earlier this week Solihull councillors voted to defer a decision on BIA's expansion plan until March 5th. But the 53 member council also upheld seven stringent conditions placed on the expansion by its planning committee.
BIA has agreed to five of the conditions but said the other two, which ban night flying and curtail any runway expansion for the next 30 years, are "fundamentally unacceptable".
BIA management and representatives of the council are due to have a series of meetings over the next 10 days aimed at limiting the development's impact on the surrounding environment. But if the council insists on the two contentious conditions, BIA will lodge an appeal with the British Secretary of State for the Environment, Mr John Gummer. An appeal is likely to result in a public inquiry - which would delay the expansion for two years.
BIA, which has an estimated value of £140 million, made £11.7 million on a turnover of £57.3 million in the year to the end of March, but the results were boosted by a one off gain of about £7 million from the sale of a seven acre site near the airport.
