BERLIN (Reuters) - The city of Frankfurt has approved airport operator Fraport's (DE:FRAG) building application for a much-debated new Terminal 3 at Europe's third-largest airport, the company said on Tuesday.
Airport expansion is a hot topic in Europe at present. A long-planned new airport in Berlin has been beset with delays and accusations of fraud, while in Britain, Heathrow and Gatwick are competing for the right to expand.
Fraport estimates the investment cost will be more than 2 billion euros (1.60 billion pounds) for the first phase of construction, which is due to start next year.
The company expects the airport in its current form to reach maximum capacity - of about 64-68 million passengers a year - in by 2021 and that the new terminal when finished will allow it to serve up to 25 million extra passengers a year.
Anti-airport campaigners, meanwhile, maintain that the airport just outside Frankfurt already creates too much noise and does not need to be expanded.
Campaigners in Frankfurt, who also want to see a night flight ban extended by two hours, had hoped that the new ruling coalition of conservatives and greens in the state of Hesse, where Frankfurt is situated, would do more to prevent expansion of the airport.
The CDU and Green parties said in their coalition agreement at the end of last year that they were in favour of looking at alternatives to building a new terminal.
But while the building application has been approved, the project still has to undergo a demand assessment, the Hesse conservatives said.
"The state government is holding continuous talks with Fraport on this matter," a spokesman said in a statement on Tuesday.
It is not yet clear when this assessment will be finished, a Fraport spokesman said.
Frankfurt airport served just over 58 million passengers last year, up 0.9 percent on 2012, but Fraport predicts growth of between 2 percent and 3 percent this year.
The new terminal would be built in stages, with the first phase aimed at providing capacity to serve an aditional 14 million passengers a year.
Fraport's shares were up 0.8 percent by 1214 GMT, outperforming a 0.4 percent fall in the MDax index for medium-sized companies (MDAXI).
The state of Hesse owns about 30 percent of Fraport and the city of Frankfurt holds 20 percent.
(Reporting by Victoria Bryan and Peter Maushagen; Editing by David Goodman)