London Mayor Eyes Chinese Funds For Airport

State funds from China and South Korea are preparing to deliver a major boost to Boris Johnson by committing billions of pounds to the construction of a new London hub airport.

Sky News can reveal that advisers to the Mayor of London have held initial talks with wealthy foreign institutions including China Investment Corporation (CIC) and officials in Seoul about the project.

The preliminary discussions represent a boost to Mr Johnson's hopes of promoting the Isle of Grain as the location for a new London hub airport, which in recent months has become his preferred choice for unlocking further capacity in London's skies.

Other institutional investors including City-based pension funds and infrastructure firms are also understood to have told the Mayor's advisers that they would consider putting long-term capital into the Isle of Grain scheme, which has been called the Thames Hub Airport.

Mr Johnson is understood to be determined to identify as much private sector funding as possible for a new airport, whereas his principal aviation adviser, Daniel Moylan, is said to be keener on the idea of government financing.

On Friday, the blueprint for the Isle of Grain airport in north Kent was published by Foster + Partners (Berlin: P2H.BE - news) , the architectural partner for the scheme. It argues that the project would cost £24bn, less than analysts had expected.

A Government-established commission on the future of London's airports, chaired by Sir Howard Davies, will publish its interim findings in the coming months.

Rival companies are vying to promote the expansion of Heathrow and Gatwick alongside those who believe a wholly-new airport is essential to safeguard Britain's economic competitiveness for decades into the future.

Mr Johnson last week proposed the closure of Heathrow - which he said the Government should buy for £15bn and turn into a town housing 250,000 people.

In addition to the Isle of Grain site, the Mayor commissioned feasibility studies on a new artificial island in the Thames Estuary and on the expansion of Stansted. All of the options would require four runways, he said.

"Ambitious cities all over the world are already stealing a march on us and putting themselves in a position to eat London's breakfast, lunch and dinner by constructing mega-airports that plug them directly into the global supply chains that we need to be part of," he said last week.

The Mayor's press office declined to comment on the talks with potential investors in a new airport.

The discussions will, however, come as little surprise since powerful sovereign wealth funds have become crucial sources of finance for western infrastructure developments.

Chinese backers are being courted for a number of new UK projects, including a new 'super-sewer' under London and the next generation of nuclear power stations.

CIC is also a minority shareholder in Heathrow Airport Holdings and may have mixed views about the relative merits of the options for expanding British aviation capacity.