BAA Chief: Heathrow East terminal 'does not look viable'

BAA chief executive Stephen Nelson has said the construction of the £1.5bn Heathrow East terminal “does not look viable” under price-cap proposals tabled by the Civil Aviation Authority (CAA).

The warning comes after the CAA said it wanted to limit BAA’s prices so that it earned a 6.2% return rather than the 7.75% it wants.

The final decision lies with the Competition Commission, but it is feared the move may derail the plan to replace terminals one and two.

A BAA spokesman said: “We will continue to pursue the Heathrow East project and it will go before the planning team at Hillingdon Borough Council. It is too early to say what funding will ultimately be available.”