Meeting 2 May 2019

We are having our first public meeting at Les Cotils on the 2nd May 2019 at 7pm, in the Harry Bound room . Anyone is welcome to attend and it’s free.

The question of airlinks will be one of the subjects on which discussion will be invited.

Policy and Resources say a runway extension is not worth pursuing, that there is no appetite for it and there would be no return on investment.

2020 thinks differently. We have read the evidence based reports, we have listened to the representations from the business community and we back a connected Guernsey to secure our future.

Please click on the link to confirm your attendance.

Lower fares NOT an option to longer runway

A front page article in the Guernsey Press headed ‘Lower fares option to longer runway’ states that ‘A STATES-FUNDED reduction in air fares could be introduced rather than a runway extension, but it could cost around £8m. a year.

The suggestion is that there could be direct subsidy for airlines instead of a runway extension. It quotes a £10 reduction per ticket costing £8m a year. This pronouncement is quite extraordinary!

It would be more expensive than an extension in less than a decade. It would be less impactful (a £10 saving is scarcely going to make a game changing difference and turn Guernsey into a vibrant economy to which tourists and business would flock. And it would be less sustainable – surely Guernsey wouldn’t commit to spending £8m a year in perpetuity. Perhaps most importantly, it would probably be illegal – certainly if applied only to Aurigny.

This surely also raises other issues:

Aurigny Group is perpetually ‘recapitalized’ and not ‘subsidised’, but:

  1. do Aurigny ever pay these loans back?
  2. if the loans are written off, does this not constitute a subsidy through the back door? (in practical terms it would appear to)?
  3. if this is so, does it not fall foul of UK competition laws?

Public sector operator subsidies are allowed on PSO/lifeline routes which could never make a profit, but this cannot really be claimed for Guernsey. Route support is allowed to start up new routes for a while until routes are profitable or abandoned, usually scaled over three years, but that is not this case. Subsidies can also be given as ‘route support’ i.e. reduced landing fees, but these have to be available to every airline.

It may be because of the above that Alastair Ford, Head of Shareholder Executive of States’ Trading Assets, was quoted by the Press as saying “That could conceivably include States funding to reduce fares on any service, not just those offered by Aurigny”.

Examining more of the proposals as quoted in the Guernsey press creates little confidence in the depth or soundness of any reasoning behind them.

There is a comparison between “infrastructure options” and “market based options” when “addressing concerns about airlinks” and this is a preference for the latter. This, though, suggests a belief that you can improve things just by improving routes, or increasing publicity, to attract traffic – and that this is actually viable. But you won’t get routes unless you can land the planes and this approach has surely already been tried with the existing runway length, and has not worked – eg, London City and other regional UK airports, and the reduction of passenger numbers in the face of all the marketing efforts of VisitGuernsey.

Just offering holiday routes to Norwich (or wherever else Aurigny’s marketing people think they can offer for a weekly service in the summer as a gimmick) is not going either to make Aurigny profitable or increase the tourist and business traffic to Guernsey.

This suggestion of knocking £10 off air fares, rather than build a runway extension and move Guernsey at least some way towards the 21st century, is either populist or pathetically naive thinking, and just calculated to bring about another kick of the can down the road, as usual.

This suggestion has been given front page coverage by the Guernsey Press. It is sad that the 2020 Association’s “Fact Check”, in which it compared the PwC Report on extending the runway, with the P&R statement made to the States in regard to this report before it was made public, has not been thought to be worth similar reporting.

© 2019 The 2020 Association

Briefing note 4

The briefing note below is the latest in our series summarising prospective business at States Meetings, to enable 2020 Association Members to be informed. It is largely self explanatory; as usual, Members’ comments are welcome.

Future States Business brief (4) – Meeting of 24 April 2019.

Let us go straight to the big issue for the States Debate at this meeting, which is item 4 on the Agenda, the Review of Air and Sea Links Infrastructure.

With regard to air links, P&R are going to ask the States to support the extension of the airport runway from 1463m to 1570m, which can be carried out within existing boundaries, and to rule out further investigation of the case for extending the runway to 1700/1800m, which would require some extension of the airport boundary towards the East, although only into land already reserved, in planning terms, for such purpose. This latter is acknowledged to be a more “future proofed” long term solution, but would, obviously, take longer to implement, cause more physical disruption, and be more expensive (although the logic behind the stated objection that there would be increased costs in “servicing an airport scaled towards greater payload capacity” seems odd, bearing in mind that increasing capacity seems to be the very advantage being sought). Whilst the arguments presented in P&R’s policy letter are all, accordingly, tailored in favour of the former as their preferred option, they do propose that if the States are not satisfied with this minimum extension project (which was so shortsightedly not carried out in the course of the last round of airport improvements in 2011/12 – another example of Guernsey moving little and late), then they invite the States to approve a capital vote of up to £700,000  for studying the economic business case for the longer extension (This surprisingly high figure appears to arise from its unnecessarily covering the costs of all possible studies.)

2020 takes credit for having brought the PwC Report itself into the public domain four weeks ago, so as to do so sufficiently in advance of this debate for the public, and Deputies, to have time to compare the actual terms of that Report with the presentation made to the States in December.  It was then that P&R’s intention to rule out further investigation of the business case for a longer runway was announced, but whilst still keeping secret the PwC Report and preventing the soundness of their reasons from being assessed by outsiders: see 2020 Association demands to see PwC reports on transport links and Air links P&R Statement – Fact check.

There is no room in a briefing note to rehearse the various arguments with regard to this issue,  good, bad or dubious, but 2020 will conduct a survey of members to ascertain their views. P&R’s arguments can be found in the Policy Letter contained in the Billet for this Meeting on the States Website at https://www.gov.gg/CHttpHandler.ashx?id=118448&p=0

As a point of passing interest, Jersey has a runway of 1690m.

With regard to sea links, P&R’s recommendation is simply to allow for another £400,000 to be spent on investigating two of the four “contingency options” identified as possible future courses of action, having regard to stated concerns about the present services, and the possible sale of Condor Ltd, and the fact that Condor’s service agreement terminates in 2024, but with a prior three year period for discussing its continuation or wind down and exit. The preferred options are those of (a) investigating the willingness of other ferry operators to take over the service, and (b) the States of Guernsey itself acquiring its own fleet and providing the service.  The options of the States of Guernsey seeking to acquire Condor Limited, either alone or jointly with the States of Jersey, are not recommended.

The only other matter of States Business of immediate general interest is the Report and proposals regarding the implementation of Island Wide Voting for the 2020 election. These go, in general, to the practical considerations of managing this system. The Report reviews, in chronological terms, the various aspects and implications of an island wide election, such as compiling the electoral roll, the eligibility of candidates, expenditure (both that likely to be incurred by the states and also that to be permitted to candidates), permissible donations, and the practical arrangements for polling day itself and the subsequent installation of Deputies. Nothing of particular moment arises, but this item is a timely reminder to Members that the objectives of the 2020 Association are to gather a sufficient group of candidates for Deputyship, of common sense, ability and like-minded views on core policy issues, so as to enable Association members’ views to carry weight in the next States Assembly.  Members are all asked to help in this direction, both by recruiting more members to our cause, and by identifying suitable candidates.

To be noted in passing is a proposal to modernise the Statutes of Elizabeth College, both to increase the number of Directors on its Board and to detach the governance of the College from close connections with the church through the Dean of Guernsey, and also from the involvement of the States itself, by removing the requirement for Deputies to be Directors of the College. This is in the light of the phasing out of Special Place Holders at the College, and the current trend towards the strict separation of private and public educational opportunities – which some will no doubt find very sad.

The remainder of States Business for this Meeting is either esoteric or mundane.    In the former category there is the final text of a lengthy Ordinance, previously authorised by the States, to apply the Nairobi International Convention for the Removal of Wrecks to Guernsey. [Shipwrecks of course – Ed].    In the latter category come the legislative instruments laid before the Assembly simply for approval.  These cover regulations on such topics as fees for foreign aircraft and for liquor licensing, and the destruction of electoral ballot papers, and they require no further comment.

We are having our first public meeting at Les Cotils on the 2nd May 2019 at 7pm where we will discuss much of the above. It’s free. Please click on the link to confirm your attendance. Bring friends and family.

Membership of The 2020 Association is free – we’re not trying to get your money but your support! Please join.

Information regarding future States Business can be found on www.gov.gg under “Search States Meetings Information.”

Air links P&R Statement – Fact check

The 2020 Association considers air links to be a top priority for Guernsey’s economic development.

We were disappointed by the 12 December 2018 statement by the Vice-President of the Policy & Resources Committee renouncing further investigation into a runway extension.

As part of our assessment of the rationale behind P&R’s announcement, we demanded publication of the PwC Air Links report.

Following our success we have been able to review the PwC report and feel obliged to point out that the P&R statement is at odds with many of the detailed findings in the PwC report and its overall conclusion.

Whilst these are numerous, we have outlined three critical contradictions at the start of this article (labelled Claims A, B and C) which are with regard to fundamental matters in informing our ongoing support of producing a cost benefit analysis relating to a runway extension (i.e.  Part B of the exercise as recommended by PwC).

We then continue with a more detailed examination of the comparison of the contents of the PwC Report, other sources and the statements made to the States as recorded in Hansard and the account of these statements as they now appear on the government website (labelled Claims 1 – 7).

We welcome views from the public and media on the runway extension. Please contact us via Facebook, email or a direct comment at the bottom of this article.

We are having our first public meeting at Les Cotils on the 2nd May 2019 at 7pm in relation to this. Please click on the link to confirm your attendance.

The three critical contradictions:

Claim A
Policy and Resources Statement

“The Policy & Resources Committee has reached the conclusion that the option of extending the airport runway will not be a game changer in respect of our connectivity”.

PwC Report

“The 1,570m extension appears to be the best runway option if it is feasible from a commercial and operational perspective for more than one airline”.

“A 1,700 -1,800m extension should be taken forward as the primary alternative to the 1,570m option. There are clear additional benefits and it is lower risk in the longer term, although there may be a substantial cost difference”.

2020 Conclusion – FALSE

The P&R statement contradicts the commissioned PwC report.

Claim B

Policy and Resources Statement

“The truth of the matter is that if [sic] were to extend the runway to the length that PwC indicate it would be a game changer, we would need a huge and complex planning inquiry, probably to bulldoze part of St. Peter’s…”

PwC Report

“Because of the geographical characteristics of the airport, an extension of the runway that goes beyond the existing boundary is likely to require filling in a ‘valley’ to the east, which would have an associated cost”.

2020 Conclusion – FALSE

The P&R statement contradicts the commissioned PwC report.

We also note the P&R statement contradicts Island Development Plan Policy IP4 “Airport Related Development Proposals relating to the operation or safety of the airport will be supported”.

Claim C

Policy and Resources Statement

“…enormous investment on which there may never be a return”.

PwC Report

“ASM have estimated that the extension plans would bring additional value to the Guernsey economy.”

On the 1700m extension: “We recommend that this is taken forward as the other runway reference case and subjected to detailed cost-benefit analysis to determine if the greater cost of this option justifies the tangible benefits”.

2020 Conclusion – FALSE

The P&R statement contradicts a previously commissioned report from ASM and concludes on a cost benefit analysis that has not yet been completed and that the recently commissioned PwC report actually recommends. They call it ‘Part B’.

A more detailed examination:

The following is a more detailed examination of the P&R Statement.

Our work became more complicated than it at first appeared: the statement as issued on the gov.gg website is manifestly different to the official Hansard in critical areas. Gov.gg statement quotations in green, Hansard quotations in orange, black where they both agree.

Claim 1

Gov.gg Para 25: The Policy & Resources Committee has reached the conclusion that the option of extending the airport runway will not be a game changer in respect of our connectivity”

Hansard Line 871: “..the Policy & Resources Committee has reached the conclusion – and we are unanimous in everything I am telling you this morning – that the option of extending the airport runway will not be a game-changer in respect of our connectivity.”

Gov.gg Para 43: “Sir, the Policy & Resources committee does not believe a case has been made to extend the runway, so we do not propose undertaking further work.”

Hansard Line 917: “Sir, the Policy & Resources Committee does not believe a value for money case has been made to extend the runway, so we do not propose undertaking further work.”

PwC Report, Pg. 20: “A 1,700 -1,800m extension should be taken forward as the primary alternative to the 1,570m option. There are clear additional benefits and it is lower risk in the longer term, although there may be a substantial cost difference”

PwC Report, Pg 20: “The 1,570m extension appears to be the best runway option if it is feasible from a commercial and operational perspective for more than one airline.” (However there is a caveat on  page 14 relating to payload restrictions.)

2003 BAE SYSTEMS Infrastructure Solutions: Guernsey Airport Runway extension, JAC Report1/Issue3/27.01.03: Pg 15

“5.6 Conclusion

For the purpose of runway length, therefore, the new generation of regional jets have been selected as the design aircraft, as these are likely to form the majority of scheduled jet aircraft movements towards the end of the 25 year planning period.

This results in a required runway length not less than 1700m as being a minimum requirement to allow satisfactory payload range performance for these types of aircraft.”

2003 November 26 Billet, Para 6.4 (Pg 2391) ends: “..A runway length of 1,700 metres is the minimum to enable, “satisfactory payload range performance for these types of aircraft.” (page 15, BAE SYSTEMS Infrastructure Solutions’ Guernsey Airport – Runway Extension Report 1 – Runway and Taxiways, January 2003).”

2020 Conclusion – NO BASIS IN FACT

1700m was a solution 15 years ago to future proof us for the next 25 years.

Claim 2

Gov.gg Para 26: “The truth of the matter is that if [sic] were to extend the runway to the length that PwC indicate it would be a game changer, we would need a huge and complex planning inquiry, probably to bulldoze part of St. Peter’s, and enormous investment on which there may never be a return.”

Hansard Line 875: “What we do know is that if we were to extend the runway to the length that PwC indicate it would be a game-changer. We would need a huge and complex planning inquiry, probably to raze to the ground part of St Peter’s and enormous investment on which there may never be a return. The truth, Members of the States, that so far at least, there is no compelling or even marginal business case for an extension of that magnitude.”

We break this down:
Claim 2.1
Gov.gg and Hansard: “..we would need a huge and complex planning inquiry..”

Island Development Plan section 20.5, pg 21 states:

“Policy IP4: Airport Related Development
Proposals relating to the operation or safety of the airport will be supported where it would ensure the continued effective, efficient and safe operation of the airport.”

2020 Conclusion – FALSE

The 2016 IDP effectively reserves the land for airport use.

 Claim 2.2

Gov.gg: “..probably to bulldoze part of St. Peter’s..”

Hansard: “..probably to raze to the ground part of St Peter’s..”

2020 Conclusion – FALSE

St Peter’s in Guernsey lies to the west of the runway. Recommended 1700 – 1799m development examined in PwC report on page 20 lies to the east; there is nothing in the report that suggests that any work needs done beyond the existing western boundary.

A Code 3 (1200- 1799m) paved runway will remain within the current airport boundaries. However a RESA would have to be accommodated to the east of the existing boundary, presumably over the La Villaize Rd. or by infilling it.

 Claim 2.3

Gov.gg and Hansard: “..and enormous investment on which there may never be a return”

1700m extension costed at £23M in 2003, (at least) £23M in 2009,

option C2 in Billet XXIV 2009 volume2 p.1857 gives indicative cost.

The Chamber of Commerce and Institute of Directors made a joint submission which P&R received on or shortly after the 14/09/2018. In the section relating to economic impact due to the weakness in the island’s connectivity:

“the impact would approach £100m per annum in lost GDP to the island”

2020 Conclusion – SPIN

Recuperation period for Guernsey economy seems short.

Has the cost of not doing anything been calculated?

Air visitors are at their lowest since 1998. Economy suffering.

Claim 2.4

Gov.gg Para 25: “The Policy & Resources Committee has reached the conclusion that the option of extending the airport runway will not be a game changer in respect of our connectivity”

2020 Conclusion – SPIN

This seems in contradiction with Hansard Line 875:  What we do know is that if we were to extend the runway to the length that PwC indicate it would be a game-changer.

 Claim 2.5

Missing from Gov.gg version

Hansard Line 878: “The truth, Members of the States, that so far at least, there is no compelling or even marginal business case for an extension of that magnitude.”

2020 Conclusion – MISLEADING

PwC proposed a professional, fact-based cost/benefit evaluation (business case) of a runway extension as Part B of the process, but this has not yet been undertaken. P&R have established their position before the facts, and it appears that they do not want them to be evaluated.

Note: The 2018 PwC Report, 2003 BAE SYSTEMS Infrastructure Solutions JAC Report and the generally accepted development would be a 1700 – 1799m runway. The pavement could be contained within the current airport boundary. A RESA (runway end safety area) would need to be created to the east of the current airport boundary. 

The PwC Report does not recommend the 2000m option.

In order for the Aurigny jet to autoland in fog a minimum runway length of 1650 m is required as the landing distance is increased when a E195 is autolanding even if the radio aids and runway lighting was improved to CAT 3. The current Guernsey runway length is limiting even for the E195.

Claim 3

Gov.gg Para 27: “The Policy & Resources Committee does not believe that the community nor the political body has the appetite for that. Therefore spending hundreds of thousands of pounds of tax payers’ money on listing the pros and cons of a set of runway extensions that are unlikely to be built in our lifetime will not be a worthwhile exercise”

Hansard Line 880: same with qualifier “.. a set of runway extensions that in our view are unlikely to be built in our lifetime will not be a worthwhile exercise”

Gov.gg Para 31: “So if the States does not agree with P&R’s recommendation, if States Members believe that their parishioners want us to spend upwards of half a million pounds investigating the runways further, then they will have the opportunity to direct the Policy & Resources Committee otherwise.”

(Hansard Line 890 substituted ‘parishioners’ with ‘constituents’)

The PwC Report, Pg 20, states ..“A 1700 – 1800m runway extension should be taken forward as the primary alternative to the 1570m option. There are clear additional benefits and it is lower risk in the longer term” they go on to say that this “..would be likely to provide benefits in terms of opening up Guernsey to a wider range of fleet and airline options, including British Airways and European charter operations” and they continue “We recommend that this is taken forward as the other runway reference case and subjected to detailed cost – benefit analysis to determine if the greater cost of this option justifies the tangible benefits.”

2020 Conclusion – MISSING BASIS IN FACT

That analysis would form Part B of the Report (the business case) which must be completed for at least a 1700 – 1799m extension before an opinion such as P&R’s above can be reached. A proper decision making process is obligatory for all major investments; policy must not be formed on a whim. It must be made in an objective, evidence based manner.

Where does P&R’s ‘belief’ come from?

Claim 4

Gov.gg Para 39 – 43: “Let me be clear then, on the Policy & Resources Committee’s position as it concludes its review:

What islanders consistently tell us is that they want frequency; what a longer runway offers is potentially less frequency as larger aeroplanes rotate routes less frequently.

What Economic Development wants is choice; a longer runway does not guarantee choice – airlines could start flying in on the current runway if they see a business case.

What our island wants is an island airline with the right fleet and a commitment to the island – not a procession of so-called brand airlines cherry picking routes every summer.

Sir, the Policy & Resources committee does not believe a case has been made to extend the runway, so we do not propose undertaking further work.”

Hansard Line 913 substitutes “..What Economic
Development, completely understandably, wants is choice. ..”

and Line 917: “Policy & Resources Committee does not believe a value for money case has been made to extend the runway..”

PwC Report, Pg 34: “The importance of each indicator varies by passenger group. Reliability is a key issue for all passengers”

In the split between ‘Business’, Leisure’ and ‘Visiting Friends and Relatives’, affordability is in all groups, and top of two.

Frequency is not mentioned on this page.

The CofC/IOD’s press release states that competitive fares are most important (80% of respondents) and frequency is 5th (28%). We quote:

“The IoD and Chamber are concerned that the States are failing to address the concerns of the business community in respect of the evaluation of the islands air and sea links.

The statement made by Deputy Lyndon Trott on behalf of P&R issued to the States on 12th December suggests conclusions have already been drawn in the evaluation of the current status and assessment for the development of the air links and sea links infrastructure. Whilst we agree with the opening statements regarding the criticality of the impact of our transport links, we disagree with the recommendation to terminate the evaluation of air links without having completed the evaluation process.

With regards to the Policy and Resources Statement the IoD and Chamber would like to clarify the following specific points: 

(1)   The business groups undertook the survey and submission at the ‘specific request’ of the Economic Development/ Policy and Resources committees in support of the work undertaken by PWC. 

(2)   The joint member survey clearly identified “Competitive Fares” as the top priority for Guernsey’s connections with London, highlighted by 80% of respondents. The need for “6 flights per day to Gatwick though out the year” was 5th, highlighted by 28% respondents.  Given P&R’s statement it would be helpful to understand evidential basis on which they identified frequency as the leading consideration in the development of air links. 

(3)   It is apparent that Policy and Resources have focused on an extension to 2000m, which is inconsistent with our prior understanding that the PWC review was recommending investigations of two much more modest options, 1550m and 1750m. It would be helpful to understand why such an extreme position which would clearly cause a lot of distress in the local Parish has been proposed as the solution against which to judge viability. 

The survey clearly expressed the concern of the business community with the current situation, the lack of progress and the lack of a cohesive plan to evolve our air and sea links leading to a lack of confidence to make investment in the business environment.”

2020 Conclusion – NO BASIS IN FACT

The CofC/IOD drew their conclusions from material in circulation prior to this P&R statement and indeed that statement referred to those surveys. (Para 21)

Claim 5

Gov.gg Para 41: “What Economic Development wants is choice; a longer runway does not guarantee choice – airlines could start flying in on the current runway if they see a business case.”

Hansard line 910: What Economic Development, completely understandably, wants is choice. A longer runway does not guarantee choice – airlines could start flying in on the current runway if they see a business case.

2020 Conclusion – UNCLEAR OR MISLEADING

What was inferred by ‘choice’? Implication is choice of airlines.

If so, this is not true in sense they can only fly in restricted aircraft and or reduced payloads. No low cost Easyjet / Ryanair. So selective airlines only. Aurigny.

Claim 6
Both Paras 11 – 13: “Back in 2016, the-then new Committee for Economic Development told us it would be bold and brave. But there was little progress on air and sea links… (and ending) …That was why the President of the Policy and Resources Committee and I submitted an amendment to take forward a review of air and sea links infrastructure which was wholeheartedly supported and agreed by the Assembly.”

The sequence of events was as follows:

The States’ meeting of 27th June 2017 on the P&R Plan had the following submission from the CfED:

On p.147 second bullet point it stated “Examine the viability of extending the runway in order to facilitate additional connections with the UK and Europe by Q4 2017 and report the findings to the States.”

Deputies Roffey and Soulsby drafted an amendment to remove this work stream.

Following the brouhaha that followed P&R suggested the following amendment which was passed by the assembly. The Roffey/Soulsby amendment was withdrawn.

Amendment 29 was – “To insert at the end of the words in Proposition 6 b): “, but subject to deleting the “Guernsey Runway Extension (Pipeline) from table 27 and replacing it with “Strategic Air and Sea Links Infrastructure (Pipeline)”.”

The time frame for delivery therefore became the responsibility of P&R.

P&R were aware of this and the sequence of events is recorded in Hansard for the appropriate meeting & particularly so as P&R laid the amendment to do the work:

 
and the final amendment was:
 
 
2020 Conclusion – FALSE
 
The Committee for Economic Development work stream was stopped and taken over by P&R.
Claim 7

Gov.gg Para 30: “We should also remember that [sic]he States’ Trading Supervisory Board is looking at extending the RESA, as directed by the States, and is reporting back in the first quarter of 2019, and the requerants have said that this might be the solution needed.” 

Hansard Line 885: “We should also remember that the States’ Trading Supervisory Board is looking at extending the runway end safety areas (RESAs), as directed by the States, and is reporting back in the first quarter of 2019, and the requérants have said that this might be the solution needed.”

Both: Para 72 /  Line 970:  Repeated in summary: “Work on the extension of the RESA”

Deputy Kuttelwascher’s Requete on the length of Guernsey’s runway does not seek to extend the RESA, it suggests  reducing the RESA at the eastern end of the runway to 90m, and the potential use of EMAS and other measures, if required. It does not discuss the RESAs in the plural, and that is significant.

In spite of Deputy Kuttelwasher’s challenges to the P&R spokesman in the question time (Hansard line 1010), and a nonsensical response being offered (Hansard line 1019), no correction was made.

All members of P&R including the spokesman voted for the above requête on the 24th Oct 18.

Using existing runway.

2020 Conclusion – FALSE

The spokesman did not understand the subject.

Deputy Trott, Hansard, line 1043: “We have an obligation in Government to be open and transparent. We have an obligation to be honest with our community.”

The following is a comparison between part of the the published version of the statement on the gov.gg website, and the Hansard, where the Hansard version is the struck out text, and the underlined that on the gov.gg website.

© 2019 The 2020 Association

 

Copy of ‘Statement by the Vice-President of the Policy & Resources Committee’

The statement below has been copied here from the gov.gg website simply to add paragraph numbering for easy reference & we've provided blue links back to our analysis. There are material differences in critical areas between this and the Hansard which is a transcription of what was actually said, and these are covered in the analysis page, with a comparison at the end.

The review of air and sea links infrastructure

Wednesday 12 December 2018

  1. “The review of air and sea links infrastructure
  2. Sir, Guernsey’s air and sea links, and the infrastructure that provides them, are critical.
  3. They are critical to our community wellbeing.
  4. Critical to our visitor economy.
  5. Critical to our finance sector – the engine of our economy.
  6. Critical to everyone in the Assembly today – because our job is to protect the interests of those who elect us.
  7. It does not matter which Committee we sit on, what that mandate may be, or which parish we represent. Air and sea connectivity is a States-wide matter, recognised as such in the overall government business plans approved by the States in both 2016 and 2017.
  8. We have a States-owned airline which owns slots at Gatwick Airport, and which meets and exceeds the targets that its shareholder gives it.
  9. We have a commercial ferry operator, Condor, which is meeting end exceeding the targets in its service level agreements.
  10. What we have is good. But to remain competitive, and to remain connected, we know that our community wants better. That is why we, the States, made it a priority.
  11. Back in 2016, the-then new Committee for Economic Development told us it would be bold and brave. But there was little progress on air and sea links.
  12. By the summer of 2017, the Policy & Resources Committee was concerned that progress had been painfully slow. This was for a variety of reasons, but primarily the absence of a clear vision for what was needed.
  13. That was why the President of the Policy & Resources Committee and I submitted an amendment to take forward a review of air and sea links infrastructure, which was wholeheartedly supported and agreed by the Assembly.
  14. The objective was to provide some momentum and some structure to taking forward the work on air and sea connectivity and infrastructure.
  15. During late 2016 and into 2017 the Policy & Resources Committee had undertaken a strategic review of Aurigny. That review came up with a single set of recommendations, including focusing Aurigny towards economic enablement and reduced losses.
  16. Although there were two reports that were part of the review, they were almost identical, with one notable exception – some of the reviewers wanted to build a longer runway; others felt that was not part of the scope of the review.
  17. So it was clear that it was important to look at the pros and cons of extending the runway.
  18. But it was also important to recognise that the future strength of our community’s air and sea connectivity could not be reduced to how long our airport runway is. Such an assumption then, was as foolish as such an assumption would be today.
  19. With that in mind, in spring 2018 PwC was commissioned to carry out initial reports on two things: the factors that we need to consider in order to strengthen our air links infrastructure; and the contingency plan that should be considered given the impending sale of Condor Ferries Limited by its owner.
  20. Let us be clear: we asked independent experts to give us their views on the issues, the options for resolving those issues, and what – if the States was minded – it might do next.
  21. We did not ask them to do a survey of islanders’ or business’ views. The business bodies in Guernsey have undertaken surveys already, and we note their findings. Ultimately, of course, if you ask people if they want better air and sea links they will say yes. We asked PwC to look beyond that, which they have.
  22. Having had the reports back from PwC, in the autumn, we have now shared them with the Committee for Economic Development, the States Trading Supervisory Board and the Committee for the Environment & Infrastructure.
  23. In the first quarter of 2019 Policy & Resources Committee will submit a policy letter for debate and decision by the States meeting. It will set out the recommendations of the Policy & Resources Committee following the completion of the work undertaken by PwC.
  24. Included in the comments and recommendations that will be part of that policy letter will be the following, in relation to the runway.
  25. The Policy & Resources Committee has reached the conclusion that the option of extending the airport runway will not be a game changer in respect of our connectivity.
  26. The truth of the matter is that if were to extend the runway to the length that PwC indicate that it would be a game changer, we would need a huge and complex planning inquiry, probably to bulldoze part of St Peters, and enormous investment on which there may never be a return.
  27. The Policy & Resources Committee does not believe that the community nor the political body has the appetite for that. Therefore spending hundreds of thousands of pounds of tax payers’ money on listing the pros and cons of a set of runway extensions that are unlikely to be built in our lifetime will not be a worthwhile exercise
  28. Of course, this is a government decision, not just a Policy & Resources Committee decision. So in the first part of 2019 the States will be asked to agree the proposition to do no further
  29. work, and spend no further taxpayers’ money, on investigating the permanent extension of the runway.
  30. We should also remember that he States’ Trading Supervisory Board is looking at extending the RESA, as directed by the States, and is reporting back in the first quarter of 2019, and the requerants have said that this might be the solution needed.
  31. So if the States does not agree with P&R’s recommendation, if States Members believe that their parishioners want us to spend upwards of half a million pounds investigating the runways further, then they will have the opportunity to direct the Policy & Resources Committee otherwise.
  32. On such a matter as this, agreed by the States as one of its highest priorities, it is right to ask for and accept the decision of the States. The Policy & Resources Committee will publish the PwC report on air links infrastructure as an appendix to that policy letter, so that all States Members have the opportunity to see the evidence – and indeed, all in our community do too.
  33. As I said, the future of our air links cannot be reduced to a discussion of runway extensions.
  34. The States’ Trading Supervisory Board has supported in Aurigny in the purchase of a new fleet of ATRs. We will debate that policy letter at this meeting.
  35. It may be that combining these two work streams will give us greater resilience, and also provide the opportunity for new operators to come in. We will wait to hear more from Deputy Ferbrache in due course.
  36. The Committeefor Economic Development asked the States to approve a move to quasi-open skies in July, which was agreed despite some doubts, and we wait to see the benefits of that in terms of new routes.
  37. That may be assisted through the airport overhauling its landing charges structure for new routes, supporting the use of the Future Guernsey Economic Fund – established by the Policy & Resources Committee – which can support route development where there is an economic business case.
  38. So catalysed through the review process, steps are being taken that could lead to enhanced air connectivity according to those Committees who have taken those steps.
  39. Let me be clear then, on the Policy & Resources Committee’s position as it concludes its review:
  40. What islanders consistently tell us is that they want frequency; what a longer runway offers is potentially less frequency as larger aeroplanes rotate routes less frequently.
  41. What Economic Development wants is choice; a longer runway does not guarantee choice – airlines could start flying in on the current runway if they see a business case.
  42. · What our island wants is an island airline with the right fleet and a commitment to the island – not a procession of so-called brand airlines cherry picking routes every summer.
  43. Sir, the Policy & Resources committee does not believe a case has been made to extend the runway, so we do not propose undertaking further work.
  44. If the States believes that is wrong the decision, it will have the opportunity to reverse that decision in February and we will of course be bound by that decision in a few weeks’ time.
  45. Of paramount importance is the preservation of our sea links.
  46. We have a commercial operator that we rely on for our passenger, vehicle and freight services, but one over which we have no control.
  47. There is no operating agreement in place with this provider.
  48. This provider also serves an additional, bigger market in Jersey which – perfectly reasonably for commercial reasons – it chooses to give preference to its services.
  49. Reasonable for its own business reasons – but increasingly unacceptable to our community.
  50. Moreover it is up for sale.
  51. And it is suffering under the burden of an impaired reputation following the purchase of a flagship vessel which is not universally admired in our community.
  52. In short – we are vulnerable, exposed, at risk when it comes to our sea links.
  53. This is how we bring in our freight, how many of our teams travel to sports events, how many of our children go on educational and cultural trips, how we go to see our families and friends off-island.
  54. This truly is a lifeline service. But it is operated as a business by a business which cannot share all of our aspirations for this service because it needs to provide a return to its investors. It is not a charity.
  55. Compounded by Condor’s sales process, when it comes to our sea links we are vulnerable, we are exposed, we are at risk.
  56. It is right, of course, that the Committee for Economic Development continues to do what it can to engage with Jersey and the provider to see what service improvements can be secured – both with the business and, potentially, with a new owner, potentially in the first half of next year.
  57. But frankly, P&R strongly believe that our community will not accept that success is more of the same.
  58. In fact, it will, potentially see that as failure and as a missed opportunity.
  59. And, of course we cannot be sure of the plans of any new owner of the provider.
  60. So while it is the role of Economic Development to continue to engage with Condor, it is the role of the Policy & Resources Committee to contingency plan – to prepare for the worst, should a plan B be needed.
  61. The PwC work on sea links looked at four contingency options, and the view of the Policy & Resources Committee is that two of them merit further urgent detailed work.
  62. So in our Policy Letter in February, we will be recommending further independent expert work is undertaken during the first quarter of 2019 to look at the contingency option of a setting up a Guernsey-only, Guernsey-owned passenger, vehicle and freight service, should one be needed; and the contingency option of finding a new operator should the new owner of the current provider decide that they do not want to maintain and improve the services to Guernsey.
  63. We will be commissioning experts to provide further details on investment required, financial modelling, technical considerations and commercial considerations.
  64. These are contingency options. This is contingency planning. Just as we planned and are planning for Brexit, and planned for the referendum, and plan for many other things, so we are planning for our sea links. This is what government must do, and it is the role of the Policy & Resources Committee to provide this leadership. The policy letter will set out what we are going to do and how much it will cost.
  65. But, again, we will be asking the States to agree that work, as this is a decision of importance to the whole of the States and the whole of our community.
  66. In addition, we will work with the Committee for Economic Development to take forward the ramps legislation agreed by the States in 2015, following the approval of a States Report entitled “Strategic Roll on Roll off Ferry Services” which set out the need and justification for establishing a licensing regime for RoRo ferry services.
  67. Given the work that we will be doing, we need to be careful not to undermine any commercial position that we could need to adopt in the future. However, as a government we have a duty to be as open and transparent as possible. No one, regardless of their stake would or should expect anything less.
  68. This means we will provide information on the PwC findings in the policy letter. We will endeavour to provide Members of the Assembly with as much information as we are able to.
  69. Sir, to conclude, many positive steps have been taken on our and air and sea links:
  70. · The strategic review of Aurigny
  71. · A new agreement on supporting new commercial routes through the airport and Economic Development, with a move to quasi-open skies
  72. · Work on the extension of the RESA
  73. · The potential purchase of a new fleet of ATRs
  74. · Progress on contingency planning for sea links
  75. The Policy & Resources Committee has considered these, will now set out clear next steps on the air and sea links structure review.
  76. But it will ensure that the States Assembly – which chose to prioritise air and sea links in 2016 and 2017 – makes the critical decisions on next steps.”