2nd January 2015
Positive news received at the start of the New Year! Links to all ten submissions are included below.
THE House of Commons Transport Select Committee will hold an oral evidence session on Monday 2nd February to examine the future of Manston airport.
The session, which will take place at 4.00pm, forms part of an inquiry into smaller airports launched in July.
In total, the committee received ten submissions of written evidence from parties including Thanet council, Kent County Council and the Supporters of Manston Airport.
RiverOak Investments, the American firm interested in becoming Thanet council’s indemnity partner for a potential compulsory purchase of the site, also submitted written evidence.
Select committees collect written and oral evidence during inquires, before reporting findings to the Commons. The information will also be published online.
The government then has 60 days to reply to the committee’s recommendations. From the Thanet Gazette
Submissions to Select Committee – Smaller Airports re Manston Airport 2014
1. Roger Gale
7. The Supporters of Manston Airport
Dec 17, 2014 | Media statement
Below we have answered some of the questions that have been most frequently asked of us, both to explain the process and to reassure the Thanet community of RiverOak Investment Corp’s suitability as an indemnity partner to Thanet District Council.
- Who has the power to acquire Manston Airport by Compulsory Purchase for planning purposes?
Only Thanet District Council. Not the Government and not Kent County Council
- What are the grounds for a Compulsory Purchase Order (CPO)?
A CPO can only be made where there is a compelling case in the public interest. The Council is of the view that that it is in the public interest that Manston should be an airport, but the present owner wants to use the site for something else.
- Who will make the final decision?
Once the Council decides to proceed it serves notice on the owner. If the owner objects, a Government Inspector will be appointed to hold a public inquiry at which both sides will make their case. The inspector then writes a report which goes to the Secretary of State for Communities and Local Government, who makes the final decision.
- RiverOak has offered to indemnify the Council. What does this mean?
RiverOak will cover ALL the costs of the CPO process, the costs of acquiring Manston and all related costs. These include legal fees, valuation fees, inquiry costs and any other expenditure incurred in acquiring Manston under CPO. The Council will not have to pay for anything.
- What happens if RiverOak won’t or can’t pay?
Under the terms of the indemnity, the Council will not be required to take any particular step until it has first received sufficient funds from RiverOak. The indemnity therefore prevents situations where the Council has incurred a liability which it needs to try and sue RiverOak to recover.
- How will these payments be managed in practice?
RiverOak will open an escrow bank account which will always hold sufficient funds to meet any pending bills and which can be monitored by the Council.
- What happens if the Secretary of State decides against a CPO?
Unless there are grounds for appeal, that will be an end to the matter. RiverOak will have paid for everything and the Council will not be out of pocket.
- What happens if the Secretary of State confirms the CPO and the owner decides to appeal?
Appeals against CPOs are rare, but if there is an appeal RiverOak will cover all the costs in the same way as in the original CPO process.
- What happens after the CPO is confirmed by the Secretary of State and when does the question of “Compensation” arise?
Nothing happens until the Council serves notice on the owner that it wants to transfer ownership and take possession of the site. There is no liability to pay the owner anything until this step is taken.
- Will the Council actually take possession?
No. Under the terms of the Indemnity Agreement with RiverOak the Council will immediately transfer ownership and possession to RiverOak.
- What is the Compensation that has to be paid to the owner?
This is intended to compensate the owner for the value of the land which is being taken. Normally the value would be based on existing planning use and on the price paid for the land in any recent open market disposal.
- Who fixes the amount of compensation?
If the parties are unable to agree a value this is done by a government body known as the Upper Chamber (formerly the Lands Tribunal).
- Is it possible to get an idea of the value before compensation is awarded?
Yes. During the Inquiry, both sides will be advised by professional valuers, who will base their valuations on a recognised set of criteria.
- Will the Council be at risk when it comes to the question of compensation?
No. RiverOak have proposed using a process where they will deposit an agreed amount of funds in an escrow account BEFORE possession is taken and the Council will not elect to take possession or ownership transfer until this has taken place.
- What happens if the amount of compensation awarded by the Upper Chamber is more than expected?
In order to provide the Council with full protection against this outside risk, RiverOak will take out insurance to cover any additional amount of compensation over that estimated in the unlikely event that the compensation exceeds the funds already deposited in the escrow account.
- Are there any foreseeable circumstances in which the Council might be saddled with a financial liability arising out of the CPO?
- Is RiverOak willing to negotiate with the owners to avoid the need for CPO?
Yes. CPO procedures require that every attempt should be made to agree things up to the day of the public inquiry. However it seems clear that the owners will not negotiate until the Council passes a CPO resolution.
- Does RiverOak need any public funding for this project?
No. We need nothing from the Government, from Kent County Council or from Thanet District Council.
- RiverOak has formed a new company for the airport project. Why?
This is normal procedure for a private equity group like us, or indeed for virtually any commercial party. We create a new company for every project and channel our investment funding into it, much the same as the Disney Corporation forms a new company for every new film it makes.
- Why did RiverOak refuse to produce a 20 year business plan?
This is not strictly correct. We refused to produce numbers for 20 years because we felt it involved an unacceptable amount of guesswork/predictions about future economic conditions.
- So what did you produce?
We produced numbers which demonstrate to our satisfaction and that of our investors that this airport can break even within 18 months of re-opening.
We then extrapolated those numbers to show a healthy profit at the end of five years based conservatively on cargo and engineering operations (which is only one part of our longer term vision).
We also produced a lengthy narrative document which describes our plans and vision for Manston over 20 years. Those plans are also set out in a submission that we made to the London Airports Commission at the end of July.
Q: If a CPO is successful, where do you see Manston Airport in 10 years’ time?
- 1,300 direct jobs plus at least 1,000 indirect jobs
- 120,000 tonnes of cargo a year with an emphasis on perishables
- Packing, storage and distribution of perishables
- 100 aircraft a year recycled in facilities developed jointly with a major aircraft manufacturer
- 50 aircraft a year repaired/maintained
- Growing business jet traffic
- Light aircraft training
- A resident airline carrying 1.5 million passengers a year to leisure destinations
- Why does passenger traffic feature so low down?
We are keen on passenger traffic but all our work shows that the airport will be more soundly based financially if the early focus is on cargo and engineering.
- How many jobs would there be in 10 years’ time?
We expect to have created about 1,300 direct jobs plus at least another 1,000 indirect jobs. A significant number of these jobs would be for trained personnel such as engineers, air traffic controllers and fire fighters.
- With this Manston CPO are you asking the Council to do something which has never been done before?
No, the general principle that a council should find a private sector indemnity partner to cover all its risk is a tried and tested one and has been used in the UK for at least 15 years.
Department for Transport review.
RiverOak Investment Corp has sent a detailed dossier to the Department for Transport containing information provided to Thanet District Council to date and a narrative, which covers additional background information relating to any meetings held between RiverOak and TDC, that RiverOak hopes may be useful to the DfT in their review.
In the interests of transparency, by distributing this information, RiverOak has waived confidentiality clauses in place with TDC as it pertains to the information that RiverOak has sent to the recipients. Copies of this dossier have also been delivered to every member of Thanet District Council.
Stephen DeNardo, Chief Executive of RiverOak Investment Corp. said: “By taking these steps we again seek to demonstrate that RiverOak is not only a suitable and capable indemnity partner, but is also an organisation that is genuinely committed to the long term success of Manston Airport. We look forward to feedback from both the Department for Transport and the members of Thanet District Council and hope that, in the New Year, we will be in a position to move forward in partnership with the council to get Manston Airport open again as soon as possible.
RiverOak Investments responds to Council meeting and DfT review of submission
RiverOak Investment Corp is naturally disappointed with the result of last night’s meeting, however we welcome the Department for Transport’s offer to review our submission to underwrite all Thanet District Council’s financial and legal risks relating to the CPO of Manston Airport and our business plan for the airport’s future.
We have waived confidentiality to allow this to take place and will make ourselves available to provide any further information, or answer any questions the government may have.
RiverOak remains wholeheartedly committed to becoming the Council’s partner and we are confident that the DfT review will satisfy the council of our suitability so that we may refocus our joint efforts on reopening the Manston Airport as soon as possible.
Our Plan for Manston
Our vision is to revive Manston Airport as a successful and profitable Sky Port and Integrated Aviation Services Hub following a successful Compulsory Purchase Order of the site by Thanet District Council. RiverOak has confirmed its intention to become a partner with Thanet District Council and indemnify the Council – and therefore the taxpayer – of all costs arising out of the CPO.
Following a successful CPO, the focus will be on re-establishing the airport’s cargo business, particularly on perishable cargo, which successfully represented Manston’s core business for several years prior to its closure.
Perishables are considered by the aviation industry to be the most rapidly growing air freight sector and Manston Airport is ideally suited, geographically and with the physical infrastructure of a long runway, hangars and space for development, to cope with virtually any level of demand.
We also plan to build up to five new hangars offering extensive capability for aircraft maintenance repair and overhaul operations (MRO) and aircraft recycling.
A number of original equipment manufacturers (OEM) have already expressed a keen interest in having a facility there.
While cargo, teardown and MRO will form the core business plan, when the airport becomes operationally profitable RiverOak will consider adding passenger services, focusing on both routes to leisure destinations as well as number of scheduled business routes.
Jobs for East Kent
Our plans for Manston will create significant local skilled employment, with an estimated 400 direct jobs being created in the first phase, as well as additional indirect jobs and economic benefit in Thanet and the East Kent region as a whole.
For more information please go to RiverOak’s website – http://www.riveroakinvestments.co.uk/
RiverOak Investment Corp has studied Thanet District Council’s Report to Cabinet entitled “Manston Airport Exploration of CPO Indemnity Partner” in detail and we have also asked our solicitor, a partner at Wragge, Lawrence Graham & Co. in London, to check the veracity of the recommendations made.
The report is full of factual inaccuracies and objectionable assumptions and does not represent an accurate picture of our submission to the council. In short, we are advised that the report is unsafe for Thanet District Council members to rely upon as evidence.
In our response we have set out our concerns and the corresponding facts, in order that the members of Thanet District Council and the general public of East Kent might be able to judge both RiverOak and the recommendations made against us properly and accurately.
One of our chief concerns is policy guidance against which we have been assessed in the report bears no resemblance to those contained in official Government CPO guidance (Government Circular 06/2004: Compulsory Purchase and the Crichel Down Rules).
Throughout the process we worked with our solicitor and with two Queen’s Counsel to ensure that our submission fully complied with the statutory requirements for identifying a planning-related CPO indemnity partner.
The interpretation of these guidelines by TDC council officers can only be interpreted as extremely unorthodox. The kinds of questions asked are not required by the standard and accepted guidelines nor indeed appropriate for the identification of a planning-related CPO indemnity partner and this fact calls into serious question the qualifications of the two interim council officers to make appropriate judgements on this issue.
Equally we are aggrieved that the authors of the report have chosen to ignore much of the substantive body of evidence we provided them with over the last eight months.
As part of the due diligence process we confirmed RiverOak’s status and capacity; provided a cogent and detailed business plan with five year financial projections and we confirmed the amount of funds (in cash and on call) we have established for the Manston CPO.
No acknowledgement has been given to this detailed information. The officers appear to have relied only on summary documents, despite knowing of the existence of more detailed work which included market testing with airlines, aircraft manufacturers and others with a keen interest in establishing operations at Manston. All of which was shared with TDC officers, but seemingly discarded or ignored.
Instead there is a persistent requirement for an unrealistic 20 year business plan with financial projections. This is not required within official CPO guidance. We have endeavoured to explain the commercial and legal absurdity of such a request but evidently to no avail.
We also find it insulting to suggest that we failed to provide suitable evidence given that our numerous offers to put Thanet’s legal advisors in touch with our own legal counsel, to ensure all questions had been answered (a common practice when two parties are seeking to become commercial partners), were stubbornly rejected or ignored. The audit trail of unreturned emails and calls made by our lawyer to TDC is testament to this.
Having already made three offers to buy the site, including one for the asking price, RiverOak has to date expended more than £600,000 and eight months seeking to prove its suitability as a CPO indemnity partner to Thanet District Council. It is money we have been more than willing to invest because we have a robust, detailed plan for Manston and the financial capability to see it through. Indeed why would we do so if we did not have the funds?
It is therefore galling to discover that the Labour Group at TDC, actually voted “that the Labour Group on Thanet Council should oppose all moves to acquire Manston Airport by compulsory purchase, irrespective of whether a suitable indemnity partner could be found”, by a majority of 11-8, on 14th October. Indeed we wonder if the unorthodox interpretation of the CPO guidelines, including tests that could not reasonably be met such as the production of an unrealistic 20-year business plan, were in fact crafted to ensure an arrival at this particular set of recommendations.
We call upon Thanet District Council members to tear apart this report and assess our suitability as potential CPO partners purely on the basis of facts and the requirements of official CPO guidelines.
Click here to view a copy of RiverOak Investment Corp’s open letter to Thanet District Council.
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