101. Perhaps we can have a note on that to confirm that is the case.3
Can I ask Treasury, on the value of the sale we have been bandied round this figure of £800 million, am I right to say that in addition to that the Government had to pay off some of the existing debts of NATS, £300 million?
(Mr Glicksman) Some of that £800 million was used to pay off NATS debts.
102. The net received was £500 million. (Mr Glicksman) Roughly that sort of figure after paying off the debt.
103. On the assumption it was £800 million, the AO suggest that as well.
(Ms Lomax) The Government's cash proceeds were £758 million, as stated in the NAO Report.
(Mr Glicksman) Some of which was used to pay off the debt.
(Ms Lomax) It is a clear answer, there is a very good table in the NATS-
104. Can we have a note on that as well?
(Ms Lomax) There is no need for a note, if I may respectfully suggest, it is all set out very clearly in the NAO Report in Table 20, page 37.
105. Perhaps the Treasury can advise how much debt was paid off
(Ms Lomax) £700 million of Government debt was paid off, £330 was National Loan Fund debts, which was quite old. Mr Glicksman) £330 million was paid off
106. We paid off bit of our debt, then we got the funding. Moving on, if I may, may I ask, in terms of he way the competitive bid was managed, particularly in terms of the Airline Group and Serco Nimbus), given that the Airline Group fly planes and NATS were in the same market, and therefore subject to the same risk if there was a down turn due o Gulf War, or whatever it is was that factored in against the Nimbus bid, what I mean is, all things being equal, one would have thought one would go or the Nimbus and Serco to spread one's risk?
(Ms Lomax) I am not sure how much risk spreading you would have got because Serco are also involved in this sector as well. If you are talking about a totally major impact on the aviation sector there was a provision in NATS' licence, as I think I mentioned a few minutes ago, for an exceptional price review.
107. You mentioned that the world looks like a riskier place since September 11, if this deal were going through now, given we all know it is a riskier world we live in, how much less than 800 million would you think it was reasonable to take from the preferred bidder?
(Ms Lomax) I cannot answer that question. I think that probably the structure of the deal would have been a little bit different. I think that the work that is going into the big announcement at the moment as a composite solution is a reflection of the need to adjust to the world as it is now.
108. Can I ask something about delays. My understanding is that the level of delays prior to September 11 in Britain was similar in France, Germany and Spain but since September 11 they have reduced their delays because there has been less traffic and they are taking the opportunity to reduce delays, however our delays have increased. Why is that?
(Mr Everitt) There are a number of reasons, I think. One is they have had the benefit of increased capacity through something called RVSM, which is vertical separation.
109. Is it because they have a public sector remit and we have this narrow financial remit for NATS?
(Mr Everitt) We have brought on this major centre at Swanwick which is a huge technical challenge. I have been on the record publicly saying we did not have enough controllers, we were some 30 to 40 controllers short, we have addressed that issue. In our memorandum you will see how we have progressed from the early summer.
110. Is this a coincidence that after September 11 there is less traffic and in Britain we do a lot worse and it is nothing to do with PPP. Is that correct?
(Mr Everitt) It is nothing to do with PPP, it is to do with the fact that we brought Swanwick on.
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