No plans to rethink NATS part privatisation

Link: Building trust in PPP

Ministers told the Transport Sub-committee, in reply to a critical report from the committee on NATS financial and technical crises, that despite problems they saw ‘no reason to re-open the issue of NATS’ ownership structure’.

It was set up as a PPP but has required a major cash injection from banks and institutions and an additional shareholder, BAA, to weather the storm following September 11.

The MPs complained the PPP structure inflated the company’s difficulties in the crisis and the government had failed to heed warnings as to what would happen if there was a downside demand shock.

They added: ‘The weakness of the financial structure suggest a failure of due diligence at the time of the sale of NATS, when traffic was already declining and there were already moves towards the use of smaller aircraft.’

But the government claimed there was no evidence any other model for NATS would have weathered the crisis any better and ‘continues to believe that the PPP will be a success once current financial problems have been addressed’.

MPs wanted the PPP to prove itself ‘not to add an unjustifiable degree of uncertainty and disruption for the company, its staff and its users at an already difficult time’.

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