Representation by I Mackintosh
- Date submitted
- 3 October 2018
- Submitted by
- Members of the public/businesses
I am writing to express my concerns regarding the DCO in relation to the re-opening of Manston Airport. I am a chartered accountant and corporate financier with extensive project finance and investment assessment experience.
The aviation case presented by RSP is so deeply partial and fundamentally flawed that it is scarcely credible that it has been brought forward for Examination.
The Manston DCO is unique in that one commercial entity is seeking to compulsorily acquire ownership over 100% of the assets of another – depriving it of its ability to pursue its own objectives. This is being done against their vocal, repeated and substantive objections –with no evidence of this being a viable scheme, any available funding nor any business plan being presented.
By RSP’s own admissions (and as highlighted by the Planning Inspectorate) they do not have the funding to implement their project. They need to raise additional equity from institutional investors. Absent the presentation of a detailed and costed business plan, with a full breakdown of the various sources of revenue it is impossible to reach any conclusions on the viability of the development or the ability of RSP to ever raise funding in the future. Indeed, the credibility, lack of relevant experience and track record of RSP's principals will act as a further barrier in this regard.
RSP must be forced to provide this detailed cost and revenue information so that it can be tested at Examination and the public can be properly informed. If this is not forthcoming, then the Examination process will be incomplete, and the conclusions unsound.
The key themes of my representations will be as follows:
• There is absolutely no need case. The 2017 DfT aviation forecast now projects no growth in UK freighter ATM’s in the next 30 years. This is a reduction from their previous 2013 projection of ATM growth of 0.4% a year.
• Actual freighter ATM’s recorded by the CAA in the UK have fallen from c110,000 in 2000 to 52,000 in c2017. This has been driven by long term market trends as air freight migrates onto cheaper and more flexible belly hold routes; of which there is ever increasing capacity.
• Of these ATM’s there were c42,000 cargo ATMs in England and Wales of which c13,000 were internal flights in which Manston will not participate.
• This leaves a potential market of 29,000 international cargo ATMs for a reopened Manston to attack - of which 84% are tied to existing infrastructure and distribution investments at Heathrow, Stansted or East Midlands.
• There is absolutely no plausible argument, and none has been advanced by RSP that supports a migration of freighter ATM’s away from existing centres of operation and investment to a re-opened Manston which has material and insoluble competitive disadvantages in both geography and infrastructure.
• Under the definitions prescribed in the Planning Act RSP’s proposed reopening of Manston does not quality as a NSIP. The Planning Inspectorate has incorrectly concluded that the airport has no existing capability.
• There would be no necessity for a DCO at Manston to deliver aviation. The existing planning regime allows for unlimited ATM’s of both cargo and passenger aircraft. Should market conditions be supportive the existing owners could re-open the airport and pursue an aviation strategy without resorting to a DCO. RSP are seeking to misuse the DCO legislation to pursue what is in effect a hostile takeover.
• The scale of RSP’s proposals are materially out of kilter with the size of the opportunity that they claim to be pursuing. Most of their proposals have no connection to their proposed NSIP and are wholly independent business opportunities which have only been included to maximise the land take and gain the Compulsory Purchase rights over the whole site. These are Compulsory Purchase Powers that the directors of RSP have previously failed to obtain twice before when they sought to become the indemnity partner of two different administrations of Thanet District Council in a CPO of the site. In each case they were unable to convince Thanet District Council they had either a credible business plan or the funding to deliver it.
• The Azimuth Associates reports that form the sole foundation of RSP’s aviation need case are deeply flawed, partial and misleading. These reports reach conclusions that are wholly inconsistent with UK market trends, historic performance of Manston and the conclusions of all other respected advisors who have looked at Manston’s viability (Falcon Aviation, Avia, York Aviation and Altitude).
• Indeed, the Azimuth Reports are heavily reliant on previous work by York Aviation to support their case and York Aviation have been very clear that Azimuth is misinterpreting and misrepresenting their previous work. This unaddressed misinterpretation of core data alone should cause the Azimuth analysis to be discounted in any objective assessment.
While RSP have assembled a credible team on the legal, environmental and technical aspects of their submission, their aviation advisor, who provides the only foundation for their proposals has limited apparent experience or other clients with the only stated relevant previous role being where she was employed by Manston’s previous owner in a business planning capacity. Where she worked alongside one of RSPs directors. Even disregarding the content of the Azimuth report no institutional investor would find this intrinsic conflict of interest and lack of impartiality acceptable.
Given the complexity of the issues at hand it is imperative that the appointed EA either has direct and relevant experience in air freight or has access to a suitably a suitable experienced and impartial aviation adviser who can provide this expertise. Additionally, given the criticality of RSP convincing the EA that their proposals are viable and fundable by institutional investors it is equally important that the EA has sufficient experience in the institutional fundraising process and the level and quality of due diligence that that would be required by any institutional investor.
My representation will primarily focus on the above areas. Although, I have identified substantial other inconsistencies, inaccuracies, shortcuts and omissions throughout the DCO documents (including for example the total omission of a Public Safety Zone – which is surprising given the cooperatively poor safety statistics of cargo aircraft) it will be for the EA to ensure that the RSP submission is properly and robustly assessed and all environmental, transport (the lack of any strategic transport modelling is again a very telling omission), noise, public health and safety issues, that are attendant to any airport development are robustly assessed in the public interest.