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Sunday, January 13, 2008

Email to Councillor Steve Jordan (lib dem)

Dear Steve,

I have read with utter dismay and incredulity at the recommendations of your committee on Gloucestershire Airport. See here.

It is difficult to believe that you were able to keep a straight face when preparing a document that is so full of blatant mistruths and inconsistencies.

Your report is contradictory and mendacious. You recommend the people of Gloucestershire, the majority of who will receive no benefit from the airport’s development plan, should both subsidise and be the main financial backers when the airport itself is unprepared to take the risk and unable to fund the development. You have proposed a funding mechanism that if not illegal under EU legislation, is certainly immoral in transferring risk to tax payers.

Your report pays cynical lip service to the council’s commitment to reduce greenhouse gases. By now, you should realise that climate change is the biggest threat mankind faces and the cynical approach to it that you advocate through your action is the kind of response that will ensure nothing will ever be done.

If the intent of the politicians who authored this document is to prevent a house development on the land, then they are putting the cart before the horse if they are not prepared to talk about the much more difficult issues of population control first. To try and manage these issues by back room manipulations rather than proper and open debate is a travesty of democratic principles.

My following comments below address just some of the mistruths and inconsistencies in your report.

Section 1.2.3

“Agreement by both Cabinets to recommend to their respective Councils that Cheltenham Borough Council and Gloucester City Council jointly and equally facilitate the borrowing required from the PWLB for onward lending to Gloucestershire Airport limited.”

This investment will only benefit a very small minority of Gloucestershire. As such, why should all the council taxpayers in the area underwrite this loan?

Section 1.2.3

“A firm commitment from the airport board to prepare a 'green policy' for all activities controlled by Gloucestershire Airport, which is approved by the cabinets of both Councils in early 2008 and reviewed and approved by both Councils on an annual basis. The green policy should include the details identified in para 8.12.”

The report does not give any details on the green policy and no targets are given. If the committee were serious about environmental aspects, it would have asked for evidence as to how the airport can reduce its greenhouse gas emissions before approving the plan.

Section 8.2

“In its business case for the project, the Airport Board stated its strong commitment to sustainable development and environmental management and to playing its part in meeting internationally agreed targets for greenhouse gas emissions.”

The committee members may have read in the news recently that no agreements were achieved on international greenhouse gas targets at the Bali conference, and they should also be aware that there are no aviation industry targets for greenhouse gases either. The committee should therefore clarify exactly what internationally agreed targets are being referred to in this section and what mechanism will be used to ensure that the airport cuts operations to ensure that these targets are achieved?

Section 8.2

“The working group requested more information about the existing carbon footprint of airport activities and how the RSP would increase or decrease emissions.”

Given that the airport management has publicly stated in the past that they would like to introduce new services, a rise in carbon emissions is unavoidable. The committee should explain why they think there is even a possibility that the emissions would decrease.

Section 8.3

“In responding to this, the Airport Board stressed that it considers it very difficult to document accurately the carbon footprint of aviation activities and that there is not a clear correlation between fuel consumption and CO2 emissions from the airport, as the runway improvements will enable aircraft to carry increased fuel loads, reducing the requirements for refuelling elsewhere and improving efficiency.”

A full load of fuel increases take off weight and therefore consumption. The committee should explain why the airport thinks that a plane will operate more efficiently when carrying a full load of fuel.

Section 8.4

“It is clear that such an increase is clearly contrary to the Government’s 60% reduction target by 2050 and Cheltenham Borough Council’s carbon neutral aspirations.”

The committee should confirm why it expects the council to abandon all hope of achieving cuts in CO2 emissions. The council must recognize that it will be difficult enough to achieve the cuts required and that approving a development such as this will send out the message that it is not even worth trying. Furthermore, the recent IPCC report has spelt out that the government’s target of a 60% is totally inadequate.

Section 8.5

“The Board clarified that they believed that the impact of eco-taxes would be more on operators and ticket sales rather than on the airport itself.”

If these taxes are successful in reducing the number of people on flights, the committee should explain why the board thinks that the airlines will be prepared to continue running empty planes and at a loss. Furthermore the committee should recognize that the whole purpose of these taxes is to reduce the number of people flying, so that greenhouse gases reduce. This can only be done if fewer planes fly.

Section 8.6

“The Board has offered to provide a written undertaking to reduce its carbon footprint wherever practicable and committed to working with tenants, operators and business users to follow suit.”

“Wherever practicable” is a blatant get out clause. The committee should recognize that the airport will be able to invoke this every time they introduce a new a service by saying that it is not possible to reduce emissions with a new service.

Section 8.7

“In their business case update the Airport Board stated that a detailed study of local air pollution concentrations has concluded that the project will not compromise local air quality standards.”

Every airport in the world has caused local air pollution problems. Gloucester and Cheltenham have suffered particularly bad pollution problems in past hot summers, which are amplified due to its geographic of the surrounding terrain. The committee clearly refuses to acknowledge these problems and will not recognize that the airport will severely aggravate these problems after the development.

Section 8.12

“The Green Policy should include an annual target for reducing carbon emissions from ground operations; establishing the carbon footprint of all existing and proposed flying activities (including any new scheduled services); identifying steps being taken already to reduce climate change impact and ensuring that climate change issues are addressed in future plans for the airport; developing a green travel plan for employee travel and using the green policy to work closely with tenants, operators and business users to reduce their carbon footprint.”

This statement is meaningless without confirming the following:

What will be the annual targets for reducing carbon emission from ground operations?

What is the fraction of the total emissions from the airport (including flights) of ground operations?

What steps have already been taken to reduce emissions and what quantifiable reductions in total emissions have been made?

What is the fraction of the total emissions from the airport (including flights) of employee travel?

How will the airport be able to reduce emissions with operators and business users without cutting flights?

Finally without being able to quantify emissions from flights, which the airport’s board have assured the committee that they can not do, it will be virtually impossible to measure any reduction in emissions.

Section 9.3

“The current 997m landing distance on the primary Runway 27 is already inadequate for a number of potential operations.”

What are the potential operations that are referred to here? If they are potential operations, that implies they are not current operations. The intent of this statement is that if the runway works proceed, then these potential operations will immediately be introduced. These will cause additional greenhouse gases and be in clear breach of the ideas that the committee has on a green policy.

Section 9.4

“Demand for business aircraft activity is increasing, however Mott MacDonald have concluded that a reduction in landing length would result in a reduction of approximately 1,350 movements annually.”

What is the airports expectation of additional private jet flights using the airport? The committee should confirm how these would be accommodated within the green policy. The committee should also recognize that a major proportion of the expanding “business jets” market is for private luxury travel. Amongst their most popular destinations are Nice, Majorca, and Monaco. “Business jets” are the most carbon intensive form of travel. In today’s world of Internet communications they are rarely essential for business.

Section 10.1

“The airport company propose to finance the revised cost of the business plan (£3,366,000) partly through the use of accumulated reserves (£1.566m) and partly through borrowing (£1.8m).”

In the 2006 abbreviated accounts, the total asset value is £2,064,070 and the cash at bank and in hand is £406,437. Given that the airport is investing a substantial part of its accumulated reserves into the project, which is allegedly only for safety and will be not cause additional greenhouse gases, what future liabilities does the airport anticipate and what are the projections for cash flow? The committee should have confirmed the stated accumulated reserves, as they appear to be high in relation to the total asset value of the company and the cash in hand.

Section 10.12

The table shows EBITDA rising to 10.94 in year 4

The committee should explain how this would be achieved in a way that is compatible with the green policy discussed elsewhere in the document and the purported attempts to limit greenhouse gases.

Section 10.15

“Mott McDonald have also undertaken net present value calculations based upon the business plan projections, using a discount rate of 3.5%, based upon a 15 years investment period.”

The committee should explain how Mott McDonald justifies a discount rate of 3.5%, when this is less than the current base rate. This is clearly at a preferential rate which breeches EU regulations. If funding is to be provided at 3.5%, then the loan is clearly being subsidized by the people of Gloucestershire.

Section 10.18

“However, although this was possible, the bank would want to use the company assets as security against the bank loan. The councils concluded that this was an unacceptable risk to both councils and that it would be better to use the PWLB facility available to the councils to facilitate the borrowing of funds on behalf of the airport and for on-lending.”

Transfer of risk to the taxpayer in the way described in this sentence is a flagrant breach of EU policy on state support. If the committee is not confident enough about the business case, why does it think that it is acceptable to pass the liabilities of default on to the council taxpayer?

Section 11.3.3

“A major restraint on scheduled flights is the limitation of the current infrastructure such as passenger terminal, transport access, car parking, etc. The Airport Board feel they could cope with up to 3 services similar to the recent Manx service before the airport reached capacity.”

The airports business case previously made reference to a future requirement for a new terminal building. There is no assurance that funding will not be sought for funding of a new terminal building at some stage in the future.

Section 12.5

“The proposed method of funding the work is unchanged from the previous proposal. It is put forward as the most efficient way of raising the money and reduces the risk of the councils losing control of the airport if there should be any default on the loan. The value of the loan is more than covered by the value of the company.”

As stated previously, why does the council think it is acceptable for the taxpayer to be liable for the loan in the case of default? The report makes no assessment of the value of the company in the event of default on the loan and how is the council confident that this will be greater than the value of the loan?

Section 12.7

“All aspects of the environmental impact were considered by the group and was agreed that the best way of tackling this issue was by targeting carbon emissions and getting the airport to adopt a ‘green policy’. To be meaningful, this will require an accurate measurement of CO2 emissions. As yet there does not seem to be a satisfactory way of assessing this nationally, let alone locally.”

The committee has not stated what there assessment of the environmental impact was. The committee should have explained why they think the airport will be successful in getting an accurate measurement of greenhouse gases when they have already said they cannot do so and there is no successful model in the country? Furthermore, this section is contradictory. If the airport cannot assess its own CO2 emissions, then “all aspects of the environmental impact” could not possibly have been assessed as claimed.

Section 12.8

“While the JASWG accepts that an increase in scheduled flights is not part of the business case for the RSP, they could be a consequence. It is therefore important that the desirability and implications of any increase is understood and should be included in the proposed ‘green policy’ for the airport.”

The airports management and the previous business plan have made it absolutely clear that they want to introduce additional services. Once £3 million has been invested, it will be absolutely desirable to introduce these services to ensure that there is some return on the investment.

The JASWG should explain what else is to be understood about the implications of introducing any new services; introduction of new scheduled flights or non-scheduled flights will result in additional emissions and thus will absolutely not be compatible with a green policy. The JASWG should also explain what measurements and controls they propose to put in place to ensure that additional services are not introduced.

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