Saturday, 6 December 2014

The Manston Airport cpo, little council and big Manston, little RiverOak and big Manston.

Trying to make something out of the whys and wherefores that have appeared on internet this week relating to the Manston cpo isn’t an easy task but I will have a go here.

The situation at the moment is that the Manston Airport site has gone from being an airport with very little commercial activity and no airport planning consent to a largely asset stripped site with a runway and a few airport buildings.

Civil airport activity at Manston dates back to 1963 when the first commercial operator Air Ferry Ltd tried and failed to run a profitable airport from the then MOD owned site.

Then followed fifty years of various operators trying to make an airport work on the site and failing to do so. 

In recent years the airport’s failure to get significant investment most particularly to do the work necessary to obtain an Environmental Permit meant that the airport never gained planning consent as an airport.

A very large part of this relates to land drainage, going back to MOD days the runways and hard standing drainage, which couldn’t be allowed to go into the ground there because the porous chalk under the site forms the local water reservoir was piped off to the sea at Pegwell Bay.

Over the years Pegwell Bay got turned into a nature reserve of international significance and the regulations about what you can pour into the sea tightened up but Manston just didn’t keep up with all this. Lots of promises were made, plans and consultations, but the millions of pounds of investment never occurred.  

The net result of this was that Manston’s status was a large brownfield site operating as an airport and theoretically moving towards obtaining planning consent as an airport. Obviously without the airport there the site would have been an agricultural site with greenfield status protecting it from development. 

Because of the size of the Manston site the cost of opening the doors to run it as an airport was around £2m per year and a large part of various operators problems have revolved around trying to get enough business to cover the £2m per year operating costs.

Now when the last operator Ann Gloag decided to close the airport the options were either a change of use for the site, getting a large company to buy the airport to run it as an airport or some level of government involvement. The Scottish government bought Prestwick but it soon became clear that the UK government were not going to buy Manston.

At the time of closure I would have guessed the value of the site as an airport would have been in £10m to £25m ball park, on top of this I would think that around £6m was needed to sort out the drainage, get the Environmental Permit and a proper planning consent, added to this would have been some investment to bring the airport up to the sort of standard that would attract business, say around £10m.

Always though lurking in the background is this brownfield status which combined with no airport planning consent seems to mean that Manston has very little to protect it from change of use.

In simple terms while the farmer has very little chance getting planning consent to build a house on one of his fields the factory owner could probably build pretty much anything he or she wanted to on the factory car park. Sure the council as a planning authority could turn the plans down but the planning inspectorate would probably override the decision at a planning appeal.

So really at the point of closure someone wanting to run the airport with funds in the £30m to £40m bracket would I think have had a reasonable chance.

I think when Infratil were trying to sell the airport as a going concern the price started around £22m and I think probably they would have sold the airport free of any debts and liabilities eventually for around the £9m mark.

My guess is that now the site value relates much more to that of any brownfield site of this size in this part of southeast England around the £300m mark and I guess it is this figure that would be the cpo compensation figure.

Added to this is the fact that the airport has been stripped of most of its aviation related equipment meaning that it would all have to be bought.

I would think that there is also a fair chance that for the airport to reopen as an airport it would need planning consent, certainly if it was to try to restart without there would probably be grounds for a challenge. Either way I would say that we would be looking at a public enquiry.

However I look at this my guess is that any cpo would most likely to need funds in the  £300m to £400m ball park and even if you take the compensation to the current owner out of the equation and have to pay what was the value of the site as an airport, around £10m to £20m I think you would probably need something in the order of £60m just to get off the ground.

Now there is no chance of TDC coming up with even £1m and RiverOak say on their website http://www.riveroakic.com/about.html “our operating asset investments can range anywhere in size from $1 to $50mm.” Which unscrambling the typos I take to mean the top end of their funds are in the £30m ballpark.

On the other side of the coin we have the new owners Discovery Parks talking in terms of £1,000m investment in the site over the next 20 years which does on the face of it seem a much more realistic figure for getting substantial economic beniftis from a site of that size.

TDC can’t tell us what it was that showed them that RiverOak didn’t have the funding to make them pass the indemnity partner test because they say that RiverOak won’t let them release the information, so all of this is just speculation on my part.

Of course it may be that there are people who can come up with a better idea in the comments and I look forward to that. 

Politically I think the Conservatives have played a much better game than Labour, if there was any public body that could have had a chance at acquiring Manston it was Conservative run Kent County Council.

From the beginning I have maintained that KCC could have been presented with a hostile petition forcing them to hold a public consultation with the people of Kent on the future of the airport and I think that focusing the attention on Labour run TDC that are frankly much too small to be involved in trying to buy an airport has been a smart political move up to this point.

It now looks as though this may be backfiring as the result of the investigation into the indemnity partner are now going to be put to full council which means that the financial risk to the council becomes a cross party affair.

All that said I don’t think that the councillors would be able to vote in a way that directly risked taking the council into insolvency over one issue, as far as I can see engaging in a cpo would need the compliance of the senior council officers and they seem to have already said that they won’t play ball.

On the political front I think the biggest mistake the Labour administration has made over the whole Manston issue was failing to hold a public consultation, this means that they are trying to act based on a supposed and unknown level of public support.

Certainly living and working in Thanet I am not really aware of much in the way of strong local feeling about the airport, the only two occasions I have been aware of strong local feeling was the no night flights campaign, which resulted in a public consultation and the Ramsgate town council campaign, which resulted in a referendum.

Anyway a moderate day in my bookshop today and a chance to write up my confused thoughts on Manston, which from my point of view boil down to; while on the one hand I am out of the door with a camera when a plane flies over on the other hand I don’t like the idea of not supporting an investor with a strong track record for creating jobs like Discovery Parks.  

53 comments:

Barry James said...

The main sticking point in the officer report seems to relate directly to the fiascos over transeuropa and SFP where due diligence have failed to identify the legal owners of the investors, this coupled with Riveroak's seeming failure to set up a UK based ltd company and a UK based bank account. It does make one assume they have no wish to comply with identifying any legally identifiable persons, and the source of any funding. Michael we have been here before and both times have had our fingers burnt badly

Purple Om said...

Michael a very good assessment of the manston issue but I disagree with a few points.
At the sale of the site to Ann Gloag the value of the site was clearly in the £100s of millions and it was a "you scratch my back and ill scratch your in NZ"
Also the cost of reinstatement as a airport over the next 20 years would be around £550m as not only would it have to pay for all the things you mention they also would have to pay compensation to Ramsgate residents and businesses for losses incurred for damage to the tourist industry and house price decreases.
Then you have the legal aspect of any CPO you and I know that the owners would be very very lightly to defend any challenge to ownership though a CPO this would leave TDC open to a counter sue form the business park team for damage caused by the uncertainty of a unlawful ownership challenge via a CPO.

Michael Child said...

Barry what underlies all of this is normal business practice and after the “Dear Honourable Councillors” missive from RiverOak I have been doubly on my guard.

An easy example of this is my book business, apart from those communications that start “Dear Honourable Sir please supply a couple of thousand pounds worth of books to us on account” which just go in the bin, I get a lot of small orders from other businesses and if I have never heard of the business then I Google them.

Now it is very difficult to be in business for any length of time without leaving an internet trail that dates back over the years, now I would expect “RiverOak” to produce hundreds of pages before pages related to “River Oaks” and so on came up and this just doesn’t happen, in fact Googling RiverOak is rather like Googling SFP Ventures.

What with that and then dealing with the offshoot RiverOak Aviation which turns out to be a Delaware LLC a quick Google of “Delaware LLC” would mean I would probably refuse to deal with them at all and certainly make certain the money had cleared before posting them a book.

Conversely if you Google “Discovery Park” especially when you consider that these are two common words and not joined together in the company name, you get just what you would expect.

Now frankly if I got an order for books from Discovery Park with the address to post to being the one on their website, I would just post the books with an invoice.

Anonymous said...

Well summarised Michael.

I would like every councillor to sit at the meeting and see before each one a bottle of Dr Pepper.

"What's the worse that could happen"

I am now a little wary of Nigel Farage.

Populist and/or reckless lost my vote.

Anonymous said...

The fact that the new owners have plans which will benefit the area economically has changed the game. For a CPO to be successful, the council would have to demonstrate that their preferred option of an airport would be a better economic bet than the new owners plans. The trouble is, the legal advice taken by Riveroak makes is clear that their only obligation would be to reinstate what was already there. In other words, the council would be trying to justify a CPO based on reinstating a little used, loss-making airport. As it never had planning permission, anything beyond that would require that a development plan and planning application was submitted in conjunction with the CPO. It would also render the entire process subject to the Public Works Regulations 2006, meaning a far more rigorous selection process would be required.

Anonymous said...

and now the petition for a vote of no confidence in TDC.....

Anonymous said...

I understand the wind farms coughed up in the region of a £ million to up date Manstons air traffic control radar a couple of years ago, they must be spitting turbines .

Anonymous said...

Not a bad summary although it omits the council removing the pollution monitors.

Manston as an airport is finished but DiscoveryPark2 doesn't seem particularly viable other than speculative build.

And concerning so many councillors still claim an airport is viable or necessary. Looks like years have been wasted by fools.

Anonymous said...

The councillors wanted night flights and knew the airport was in the water supply and want to buy it with public money. Are you sure?

Anonymous said...

Well the pretence that it won't cost us a penny has been blown out of the water by Beau Webber's claim that, by rejecting Riveroak, TDC is turning away £60 million of regional finding. It would seem that some unseemly horse-trading has been taking place in the background and that somebody who is desperate to have an airport has agreed to give taxpayers' money to an American company.

Anonymous said...

"Bryan Girdler - there is no such thing as 100% no risk, the councillors need to exercise their judgment, Riveroak have £100,000,000 of business lined up, it should be clear to the councillors that Riveroak are not about to walk away !"

Really? Is this another random number plucked out of the sky like megaphone mans threat of the number of houses for people from London and the tens of thousands of jobs the airport will create?

Stand up £100million of business that is guarantee so we can see Riveroak are telling us the truth.....

Anonymous said...

Check out Tony Freudman and Annax Aviation. Then look back into the recent past "I have to sell 10000 tickets to get the planes to Virginia and then the handout for £100K" Do we not learn in Thanet, ignore officer advice at your peril

Anonymous said...

Say you got £500 every time a cargo flights landed at your airport. To get £1 million you would need 2000 flights to land. That's 6 per day every day of the year. To get £100 million you would need 60 flights per day!!! Bryan Girdler is so desperate to save his business that he will say anything, even when it is patent nonsense. His outpourings are wholly governed by what is good for him and not what is good for the wider community of Thanet.

Michael Child said...

Anon I make it 600 per day to get to 100m or 60 per day to get to 10m. I think 60 per day is the sort of ballpark they hope for and I would guess that would take us into level of air and noise pollution that many would find unacceptable

Anonymous said...

Sadly SMA "facts" make them laughable.... just think what will happen if they try to put submit them to the Secretary of State as backing to a CPO case !!

Chris Wells said...

Riveroak response due at midnight tonight. Let's see how you cynics do with that.

Anonymous said...

Michael the air and noise pollution was already excessive even with the few flights at Manston. Hence the issue of monitors being removed and illegal flights over the town. Who allowed those at Manston?

Chris Wells said...

Riveroak have published their response, including the Labour Party's motion demonstrating their double standards in this matter. No doubt you will be silent or have a weasel worded defence of that Michael.

TDC must now publish all the legal opinions on which their challenged assumptions are based; and put the 151 officer up for questions before Cabinet debate on Thursday.

Will they do that? A good question I suspect.

Anonymous said...

So does Chris Wells subscribe to the UKIP party line that if thy get into power they will proceed with a CPO? Maybe UKIP can show us the cost justification they have produced and how much they are prepared for TDC to risk on such an action. In the councillors get this wrong, and Riveroak are found wanting in their attempt to raise funds from investors, then they could all be liable for large sums of money for taking such a risk.

Barry James said...

Chris I have a great deal of respect for your opinion however this letter from Riveroak is a blatant attempt to destabilize Local Government. You should know better than putting your local officers in the firing line especially when TDC have signed a confidentiality agreement. If one side have an ulterior motive in ignoring this agreement it doesn't behoove officers in breaking it to defend themselves. We on the fringe of political life look forward to the submission of a vote of no confidence in Labour which this campaign is really about.

Anonymous said...

SMA think the response from Riveroak is amazing. I am extremely concerned that the bully tactics that SMA are encouraging might lead to serious problems in the future

For a 'serious' company who are apparently willing to invest millions, surely they see that a 5 year business plan as unsuitable?

Anonymous said...

What a remarkably childish letter from RiverOak! They are providing the evidence themselves as to why no-one should touch them with a barge-pole. Once again they demonstrate their standard tactic of trying to bully to get their own way. The should back to the play-yard where they belong. It was easy to prove that they do not have any aviation experience as they claim. They are a property developer, and plenty to show their track record in property development. ThanetDC extended the dead-lines several times in order to give them every opportunity of providing the evidence they needed to submit, from August. Then to find out after all this, that they do not have the money either, and they want to pay it in trances. They haven't even included any amount for compensation, which will be huge. A bit of a major over-sight! They really have demonstrated that they are a bunch of amateurs! It would be laughable if it were not so tragic. Whilst, they will never win a CPO, which will be easy to challenge, the attempt of trying to achieve it could well bankrupt ThanetDC.

Anonymous said...

Leaving those you accuse of cynicism out of it Chris. What has RiverOak written that would impress an open minded person ?

Michael Child said...

Chris I am really lost for words on this one, I will try to produce a “weasel worded defence” but frankly £600k on legal fees leaves me the same feeling as “Dear Honourable Councillor” this is a bit like SFP saying they spent £600k on planning, which sounds fine until you look at the plans.

I guess £600k would pay a top QC for over 6 months and frankly if the best you can come up with is the other legal team are not as good as yours then it is time to look for a refund.

What we lack here from RiverOak is upfront funds to cover the compensation which is likely to be in £300m ballpark for a brownfield site of that size, are you really suggesting that TDC should put themselves in the position where they may have to find that sort of money?

Anonymous said...

River Oak are out to financially screw TDC over with the help of some misguided politically minded individuals who are playing a dangerous game.

TDC now have to tread very carefully.

Matthew Griffiths said...

Michael, I have today seen in print a councilor stating that Riveroak have employed a surveyor and that their valuation is for £4m. ie about £5,500 an acre. Even a boggy field fit only for pasture would seem to be going for around £12000 an acre. These people worry me but what is far more worrying is that there are people so impressionable that they accept their every utterance as if an edict from heaven. I am thinking of selling time shares on my pacific island of Grotiba, I am sure I could sell a dozen by the end of the week. Oh by the way it has a lovely airport.

Anonymous said...

Riveroak were happy to go along with the process when they thought they were going to get something out of it. TDC bent over backwards to give them opportunity to sort out the financial side. But Riveroak couldn't even be bothered to register a company in the UK or open a UK bank account; things which could have been done very easily and would have cost far less than the £600,000 they are claiming to have spent so far. Now that things look as if they are going against them we see the underbelly of the beast. The hectoring tone of the letter is ill-tempered and unprofessional. Furthermore, only a coward or a bully would attack the council's officer when those officers are only doing what they have been told to do by the council's leadership. If Riveroak has a beef they ought to take it up with Iris. Maybe they could all meet up in Ireland and swap letters.

Anonymous said...

If anybody is demonstrating double standards in this matter it is Riveroak. Having insisted on a confidentiality clause preventing TDC from revealing any details of the documents provided to them, Riveroak then attacks council officers for being incompetent. The logical defence would be to reveal exactly why Riveroak was judged to be an unsuitable business partner. But, by insisting on a confidentiality clause, Riveroak has prevented TDC from telling everybody/anybody exactly why they won't be over here any time soon. Under those circumstances, we have no option but to trust the council's officers.

Anonymous said...

Wonder how many people who think Riveroak are the saviours and they will do anything to make them have the airport, would put their own houses as insurance that should things go pear-shaped, that they would personally pay the huge bills that TDC could incur?

Can't see many taking it up.....

Michael Child said...

Matthew I think it is the site value that worries me the most, the airfield site is 700 acres, residential building land in this area sells for anything up to £1m per acre. I would say the cpo compensation is likely to be substantial.

A big factor here is that TDC are the planning authority for Manston, so that were TDC to turn down a planning application by the current owner that was detrimental to the value of the Manston site they would be reducing the compensation, which I would think would give the current owners legal team a field day when it came to the compensation amount.

What I can’t understand here is why Roger Gale who is a Conservative didn’t direct Manston Airport supporters to petition Conservative run KCC to act as cpo partners to any likely indemnity partners.

Anonymous said...

Yawn Manston is finished. Why is a second discovery park supposed to be viable other than more builder sprawl and WC New town centre nonsense. And what's happening with pleasurama and southern water and thor

Anonymous said...

Should Gale and Iris and Bob resign? They're not really on top of a vpo or manston are they

Anonymous said...

All over but for the shouting.

Purple Om said...

It's dead :)

Anonymous said...

Gale and Iris have proved themselves idiots and must go.

Michael Child said...

Go where anon, perhaps you and me could overthrow this democracy we live in for a brave new world of better government

Anonymous said...

Go as in resign Michael or even to jail. You spend your days whining about the council but then shy away from detailing the corruption or reforms.

Perhaps you should stick to worrying about the council closing your website and keep quiet?

Anonymous said...

Michael, you're saying the airport is on top of the water reservoir and drains into Pegwell Bay a protected water site too?

And this has been going on for years with the knowledge of the airport and council?

That's horrific isn't it?

And you think an airport (albeit your preference for passengers rather than freight) would still be viable?

Michael Child said...

Mixed feelings on this one anon, I guess I would like to preserve the open space there and have reservations about any sort of industrial or commercial use on top of the aquifer.

The key issue here being that Manson is a brownfield site and therefore there is likely to be development there. I am hoping that whatever is developed there will gain planning consent with a stringent s106 to protect the water drainage issues.

My main concern would be the council turning down a reasonable planning application and for this overruled by the planning inspectorate without strict environmental controls.

Looking as one does at the least of the probable evils I would say a heritage grant funded expansion of the historic aircraft aspect combined with a small regional airport would have best the of the best probable options. Conversely I would say an airfreight hub would be one of the worse options from an environmental point of view.

Discovery Parks taking over the site for a mixed use development would be in the mid damage and risk area, residential development on the aquifer being reasonably viable and industrial development requiring a considerable well regulated drainage infrastructure.

It is also worth considering that the airport doesn’t have planning consent as an airport and for it to reopen now as an airport this would probably have to be sought with the associated environmental impact study leading to an environmental permit.

Anonymous said...

I don't understand your points at all Michael.

With one breath you say an airport would be a bad thing in terms of pollution then you say a small airport would be the best thing. And then a Discovery Park development possible. Although planning consent may be needed for any such airport.

You seem to have tied yourself in knots.

By your heritage historic aircraft wording do you mean a museum?

And how would any building on the aquifer improve its drainage?

Barry James said...

anon rainfall drains down through the chalk into the aquifer. Therefore if you concrete over the chalk it cannot drain. As is the case with Thanet Earth massive greenhouses stop the rainfall. However if the runway is dug up more rain will drain. Houses, unless densely packed assist drainage, on the other hand large warehouse type building will not assist. Its all about balance

Anonymous said...

A useful linkie

Anonymous said...

Not sure Barry's right that houses assist drainage and the sewerage linkie is useful on that point.

If we are to have a clean aquifer then a fresh look needs to be taken at Manston.

How an airport was ever planned for on top of the drinking water (and even now supported by most of our politicians/candidates) is just idiotic isn't it?

When will they speak up on this pollution or is it let's-pretend-nothing's-wrong again?

Barry James said...

gardens drain concrete doesn't anon

Anonymous said...

They don't care because it isn't their responsibility and so, there is no consequence for them. The water from the aquifer is now so contaminated that they are piping in water from West Kent to dilute it down and bring it within spec. The people responsible for this state of affairs are the Environment Agency which is, of course, an unelected quango and hence, unaccountable, Bottom line, Southern Water has to supply us with water within a set specification. If they have to ship it in from elsewhere this costs more and they pass that cost on to us in the form of higher bills. We pay for the failure of the EA.

Anonymous said...

well said 11:32 although Env\A is accountable to tdc and parliament. What has Iris done except mislead sma

Barry gardens drain only if they are built as gardens or remain that way. Gardens would smaller than any housing reducing drainage...

Michael Child said...

I guess while it is interesting to explore the realms of fantasy I should point out that most of the pollution in the part of the Thanet aquifer that we use for the water supply is nitrates and was caused by agricultural fertilisers including seaweed.

In terms of diluting it with water from Wingham Well and the Stour – drawn from Plucks Gutter – this goes back at least 50 years and predated the EA

In recent years the use of fertilisers including seaweed has been much more strictly controlled. The parts of our aquifers under the main towns and concentrations of industrial and commercial development like Westwood is no longer used for the water supply.

With new residential development the pedestrian walkways are permeable, the roofs drain into soakaways and any garden or grassed areas obviously soak into the ground. Roads and driveways have to go into main sewage or be piped out of the area.

If the site is used for a concentration of industrial and commercial including an airfreight hub it would be very difficult to protect the aquifer from some sort of spillage accident.

Anonymous said...

Health Protection Agency inquiries, into Public Health consequences of Sericol pollution, opened in 2009.

The inquiry was raised by Richard Card as there seemed no political will to represent Thanet's interests.

The EA should be in touch with TDC now re TDC allegedly failing to report mercury finds at Palm Bay side of Foreness in 1990s.

I don't know that it is fair to blame EA. Other than perhaps their failure to liaise with HSE re direct abstractions at K Laundry and Newlands Farm. Their role in remediation at Sericol and Thor seems OK to me. It is Thor's choice not to opt for the most modern and effective remediation technique.

Michael Child said...

Anon at 14.49 you seem to have got into some maze of confusion here Sericol and Thor are Westwood on part of the aquifer no longer used for abstraction and mercury pollution from pretty much every sewage outfall pipe in the civilised world is very common. If you live in Thanet go to the part the EA website called what’s in my backyard, then go straight to maps, the sea pollution link is pretty obvious and while the triangles by the Weatherlees show the pollution incidents the bit you want is the square there, click on it and you will get the discharges of mercury for each year. If you live in another area just select the outfall nearest to the sea you swim in.

Anonymous said...

And would the stats you refer to include mercury that was not reported ?

Thank you for making the point that those parts of aquifer are not in use for abstracting drinking water. But they are in use for direct abstraction.

And you don't appear to have acknowledged the fact the Health Protection Agency inquiry was first raised in 2009.

Apart from your irrationality, ill informed mitigation and denial thank you for your comment Michael.

Michael Child said...

Anon when the comment doesn’t relate to the subject of the post or the other comments I am inclined to suspect an ulterior motive or someone who is interested in the issue, in this case the future use of the Manston airport site but doesn’t live in Thanet so is confused about the layout of the area.

So first which part of the world do you live in? I can only guess at your motives in suggesting that pollution issues in Thanet are any worse than those in the rest of the UK or for that mater the rest of the civilised world.

Anyway this post as I said is about Manston, if you are uninterested in the issue please don’t spam the comments with other issues but write your own blog about the issues that interest you.

Anonymous said...

18:26s summary of your views as illinformed, irrational and denial seem accurate Michael.

The Env Agency describes the thanet aquifer as the most polluted in the south east for example but you say not.

How will nitrates from seaweed pollute it with the aquifer underground? And compared to an airport leaking fuel or Thor mercury doing the same.

And mercury is present in every sewage outfall in UK you say? Lets hope not as it is banned for being ultratoxic hence the concerns over Thor. You seem to be keen to deny pollution of the aquifer despite the the facts?

Why is the aquifer so clean and protected in your world?

Anonymous said...

Nitrates are soluble. If you put nitrates on the soil and it rains they get washed into the soil and run off into water courses. But this is what happens with chemical fertilisers. It doesn't happen with organic fertilises such as manure or seaweed. These are far safer for the environment because the nitrogen is locked up in more complex molecules, being released into the soil slowly as the organic matter degrades. If the aquifer is contaminated with nitrates this has been caused by overuse of chemical fertilisers. The curious thing is that the farms around the aquifer grow brassicas, rape and wheat, none of which require heavy fertilisation.