By Guy Taylor
News that Saudi Arabia could be set to take majority control of Heathrow Airport has divided London MPs.
Saudi Arabia’s Public Investment Fund (PIF) and the Saudi-backed asset management firm Ardian have signed a £2.4bn deal for the Spanish infrastructure giant Ferrovial’s 25 per cent stake in the airport.
One other shareholder is now close to selling and more likely to follow suit, according to a report in in The Sunday Times, which could see the oil-rich nation eventually gain majority control of the West-London hub.
Some politicians and campaign groups have previously flagged concerns over the country’s investments in British infrastructure. The PIF is chaired by Prince Mohammed bin Salman, whose government has been accused of numerous human rights violations.
Former shadow chancellor John McDonnell, whose Hayes and Harlington constituency hosts the airport, told City A.M.: “Heathrow is a critical strategic resource and so I am naturally concerned about an asset like this falling into the hands of a regime that has demonstrated its ruthless pursuit of self interest.”
The Labour MP added: “I am also always concerned at the reputational damage to the UK of an association with a state with such a track record of human rights abuse.”
But David Simmonds, co-chair of the airport communities all party parliamentary group and Conservative MP for Ruislip, Northwood and Pinner, said he was “relieved that Heathrow, despite the impact of the pandemic, continues to attract interest from international investors.”
“Sovereign wealth funds have been key to the airport’s success and I am not surprised that Saudi Arabia’s Public Investment Fund forms part of this consortium. Heathrow stands at a pivotal moment in its development as it looks to recoup money lost over the last few years,” he added.
Felix Jakens, head of campaigns at Amnesty International UK, warned, however: “Companies must not get dazzled by the billions Saudi Arabia spends on sportswashing and other investments – this is a mere tactic to pull the wool over our eyes about its notorious track record of human rights abuses.”
“Instead of brokering a deal with a country that’s trying to scrub off its blood-soaked human rights record, businesses must safeguard against any possible links to human rights violations.”
The PIF, which owns over £551bn in assets, has been one of the most active sovereign wealth funds in the world. Recent major investments include a deal to buy Newcastle United and a shock tie-up between Liv Golf, DP World and the PGA Tour.
The Saudi state has also been investing heavily in tourism as it looks to promote a new image to the West. In March, it launched Riyadh Air, a new state-owned gulf carrier headed up by the former boss of Etihad Airways, Tony Douglas.
Heathrow declined to comment on speculation, while the PIF and Ardian did not respond to a request for comment.
Other major state-backed investment vehicles also hold stakes in Heathrow, including the Qatar Investment Authority and the sovereign wealth funds of China and Singapore. Pension funds such as the Australian Retirement Trust and Canada’s Caisse de Dépôt also hold investments in the group.
The airport is at the tail end of a financial recovery after years of Covid-era lossmaking. But a mounting £16bn debt pile threatens to derail the revival, while the status of the long-delayed third runway proposal remains as yet unclear.
Simmonds added: “Any new investor must make clear their plans for expansion and development, with or without a third runway.”
