Machrihanish airbase – minefield of nightmares: Part 4

This is the concluding part of our series of investigations into issues embedded – in some instances, literally -  in the former RAF base at Machrihanish in Argyll and its disposal through sale on the open market by the Ministry of Defence.

While this article concludes the series it does not mark the end of our investigations; nor will it be the last we will publish on the subject and on specific matters arising from it. While we are maintaining a watching brief on developments and will report on them, we are also both widening and focusing in a second stage of research.

What we have to say today includes in its analysis some significant new information which has come to light since we began to publish this series of four articles.

Key matters include:

• the operation and side interests of HIAL and a damaging conflict of interest in the Scottish Government
• site assets, liabilities and the position of Sound of Kintyre homeowners
• standards of conduct and procedure in public life
• the appropriateness of some prospective bidders for the site

HIAL and the Scottish Government

Highlands and Islands Airports Ltd (HIAL), operator of Campbeltown civil airport which lies within the site being sold, is at the heart of one of the main concerns arising from our investigations – confidence in standards obtaining in public life.

HIAL is wholly owned by the Scottish Government, in the name of Scottish Ministers. It is funded from the Transport Directorate which is part of the Finance and Sustainable Growth department under Cabinet Secretary, John Swinney.

It was incorporated by the Civil Aviation Authority on 4th March 1986 and almost ten years later, in 1995, had its ownership transferred from the CAA to the Secretary of State for Scotland and then, after devolution, to the Scottish Ministers.

Poor performance record: the PFI disaster

To say that HIAL has its critics would be an understatement. The standout incompetence was entering into a disastrously expensive Private Finance Initiative (PFI) contract to build a new terminal at Inverness Airport.

This contract began on 23rd May 1999 and was due to run until 22nd May 2024. It required HIAL to pay £3.50 per head to the PFI operator, Inverness Airport Terminal Ltd, for each passenger using the airport.

Insanely, this PFI also ceded to Inverness Airport Terminal Ltd the income from car parking charges and the retail concession at the terminal.

So passenger growth played massively to the advantage of the PFI contract holder and crippled HIAL.

The advent of low cost airlines had put a stop to HIALs half-witted plan to reduce the impact of the PFI costs by progressively increasing landing charges – and HIAL had left itself contractually with no means of developing its earnings from increased passenger movements. All of this went to Inverness Airport Terminal Ltd.

The structure of the Inverness airport terminal PFI was considered to be an active disincentive to the development of new services. But the picture was worse than this.

The cost of the new terminal was £9.5 million, with £3 million of this coming from the European Regional Development Fund, leaving £6.5 million investment from Inverness Airport Terminal Ltd.

The cost to the taxpayer, however, was £27.5 million when, in 2006, HIAL was funded by the then Scottish Executive to buy out the PFI contract for that sum.

During the 7 year period of operation of the contract, Inverness Airport Terminal Ltd was paid £3.50 per head for passengers using the airport and took all the revenue from car parking and the retail concession. At the same time it saw its capital investment grow by over 423% at our expense.

Poor performance record: operations

In Scotland, given the scale of the territory, the wealth of compulsively attractive locations and the journey times made possible by air – operating an airport demands much more than dealing with the airside and landside needs of scheduled flight providers and passengers.

There is a healthy market in private flying and, as Paul Keegan demonstrated during his tenure at Connel airstrip, much of this is high net worth custom – if you know how to attract it, which he did.

In contrast, HIAL is regularly under fire for inflexible opening hours, over-administrated out-of-hours indemnities, landing fees and what is described in fliers’ forums as ‘general approach to life’.

Its stance on opening hours virtually closes most of its airports to private fliers, who tend to use the weekends to pursue their flying and of course, require refuelling services.

Look at the location of HIAL’s now 11 Scottish airports and you will see just how important these should be in building a specialist private flying niche market – a mode of transport entirely appropriate in scale to many of the destinations concerned.

These are: Barra, Benbecula, Campbeltown, Dundee (a relatively recent acquisition and held under a wholly owned subsidiary of HIAL), Inverness, Islay, Kirkwall, Stornoway, Sumburgh, Tiree, Wick. These airports offer unparallelled scenic approaches, in addition to the destinations themselves. If private flying is about anything, it is about operating in these physical circumstances, unique to Scotland.

The Machrihanish Airbase Community Company, a potential buyer of the site, has intelligent business ambitions to see Campbeltown airport develop a strong presence in the private flying sector and through airshows, in the tourism sector.

These plans marry perfectly with the two world class golf courses available at Machrihanish, the expanded marina development coming in Campbeltown Loch, the townscape regeneration project and the refurbishments of the Royal Hotel in Campbeltown and the Ugadale Hotel at Machrihanish.

But MACC has found HIAL to be difficult and unhelpful, seeing it as obstructing the development of the airport. As proof of this,  we ourselves are aware of private aircraft no longer based at Campbeltown on account of HIAL’s attitudes.

It is fair to say that, with some reason, HIAL would be unlikely to be MACC’s preferred operator of the airport.

HIAL and the strange new Campbeltown airport lease arrangements

Given the situation above, above, it is doubly galling for MACC to see that, thanks to the Scottish Government’s request to the MoD – through its Transport Department under Minister Stewart Stevenson, and with no community consultation whatever, HIAL is being awarded a greatly – and unnecessarily – extended territory in a new lease, for a 10 year period.

At a single strategic stroke, the development options open to a new owner of the site are significantly reduced; and, for an area that needs access above all things, an operator regarded as having a retrogressive impact on the development of air access opportunities has been cemented in place – in advance of sale – for a period of ten years.

Shortly after we began to publish the results of our investigations, we were telephoned by Granville Johnston, Director of HIAL from its very early days and recently appointed Chair of its Board by Transport Minister, Stewart Stevenson.

Mr Johnston was clearly anxious to quell the criticism arising from our researches and was keen to impress two things upon us:

• HIAL are keen to meet with MACC to ‘see what they want?’ We pointed out that what MACC wanted was, as we had asked, for HIAL voluntarily to ask for an extension of their existing lease, rather than pursue the controversial new lease we have described.
• HIAL are ‘only interested in running airports, nothing else’. We asked whether an extension of the existing HIAL contract for Campbeltown Airport would allow them to continue to run that airport for the time being. Mr Johnston agreed that it would.

The notion that HIAL are ‘only interested in running airports, nothing else’ is powerfully contradicted by new information which appears to be reliably sourced. This suggests that a curious proposal for a new lease for HIAL  for Campbeltown Airport at  Machrihanish was actually drafted while David Sutherland, of Tulloch Homes, was still Chair of HIAL (He stepped aside at the end of January 2009.)

What is disturbing about this, if it is accurate, is that Mr Sutherland and his family – as we detailed in Part 1 of this series, own housebuilder, Tulloch Homes, known in Kintyre to have an interest in developing on the Machrihanish site.

Such concern is heightened by the fact that the proposed lease, said to have been prepared under Mr Sutherland’s tenure of the Chair of HIAL, is alleged to have asked for the HIAL lease to be extended to include Sites 1 and 2 on the airbase.

Sites 1 and 2 add nothing to the running of the airport  – which Mr Johnston had been at pains to assure us is all HIAL are interested in doing.

These sites do, however, carry the greatest attraction for building development and would therefore have been of potential interest to a developer like Tulloch Homes. (Ironically, the radioactive contamination to which the site is vulnerable, is most likely to be located at Site 1 which houses the underground armaments silos.)

All of this, if accurate, is much too cosy to sit comfortably with what the general public expect of standards in public life.

The information we have alleges that the MoD refused to grant HIAL’s request for this specific lease. Businessman Brian Keating now has 8 years left to run on a 10 year lease of Sites 1 and 2 at the former airbase.

Questions about the role of HIAL’s owner – the Scottish Government

However, the new lease now being granted to HIAL by the MoD – with greatly increased territory and the freedom to commit the vandalism of shortening the runway, should it wish – is said by the MoD to have been progressed at the request of the Scottish Government.

This means that the Transport Department, the lead government directorate in this matter – has seen to HIAL being given a hugely advantageous new lease in advance of the sale of the property to a new owner.

The fact that the Transport Minister, Stewart Stevenson, has seen fit not only to allow this but to ask for it, shows a damaging conflict of interest at the heart of the Scottish Government.

The detail of the new lease is unnecessary to ensure the continuity of the service which should be the Government’s sole priority. Granville Johnston of HIAL admitted this to us in saying that an extension of the existing lease would indeed allow the company to continue to operate the service.

So Stewart Stevenson, in refusing to call a halt to the issue of the controversial new lease could be seen to have been concerned to protect the side interests of the state-owned HIAL, whose core function is to run airports, at the expense of the hope and ambition of one of the Scottish Government’s most needy communities – Campbeltown.

This is a government that talks up inclusivity and partnership with communities in regional economic development. Argyll’s MSP and Enterprise Minister, Jim Mather, is a consistent advocate for this.

The Transport Department’s walk simply does not square with this talk.

Partnership is not apprenticeship and inclusivity amounts to more than being allowed in at the end of the party to help to pacify angry parents whose house has been trashed.

Partnership is a coming together of equals, each bringing specific skills, knowledge, experience and wisdom to the team. A mature democracy can only be grown by genuine partnerships, where each party is involved in contributing to all the decisions taken and each learns from the other.

It really is time now to walk this talk.

Offering – as now in this case, to talk to the community once you have done what you liked, in the full awareness that it was against their proper wishes, is no more than a secondary abuse.

Transport Minister, Stewart Stevenson’s track record

This is a Minister who has single-handedly inflicted a series of damages upon public respect for his party in power.

In the matter of the disposal of the Machrihanish airbase, Stevenson has exceeded his own previous record for such damage. Earlier, he had misled the former Leader of Glasgow City Council, Stephen Purcell, over the fate of the Glasgow Airport RaiL Link (GARL),  Stevenson himself had offered this project up for cutting but told Purcell it was secure.

The resultant political fall out, from Purcell’s sustained rage, damaged Stevenson’s colleagues, in particular his immediate boss, the remarkably able Cabinet Secretary for Finance, John Swinney.

It is also painfully clear – although he loyally denies it, that Jim Mather, Argyll’s MSP, has not been kept fully informed by his fellow Minister on, for example, the contamination issues related to the Machrihanish site. In the note Mr Mather emailed to Mr Stevenson, which we have published, he comes close to begging for the necessary information to be shared with him.

It is unacceptable that an honourable and  well regarded fellow minister who has constituency responsibilities in this matter, should remain uninformed – and therefore impeded in taking action – by a colleague whose track record has been so hapless and whose authority so uncertain.

Scotland has been taught to expect dodgy deals by previous administrations and by Scottish Labour’s long fondness for pork barrell politics – but it has been led to expect differently of the Scottish Nationalist Party. The more it looks as if the SNP are little different from what has gone before them, the less is the incentive for those hungry for a new politics to vote for them.

In our view, Stewart Stevenson should be removed from office without delay. His actions over the HIAL lease are indefensible and bear neither rational scrutiny nor daylight. The country, his party and his colleagues deserve much better.

There was only one action to be taken in the disturbing drive to issue HIAL with a very different and much more advantageous lease – for 10 years – in advance of the arrival of a new owner.

That action was to stop the work on the proposed new lease and issue HIAL with a one year extension of the existing lease, which Granville Johnston accepted would be adequate for the time being.

This could, of course, have been done – but it wasn’t. Some could not do it and those who could, would not. Any other ‘action’ was decoy, compensation and far too late.

Site assets, liabilities  and the position of Sound of Kintyre homeowners

The valuation of the site sets its assets against its liabilities – all within a valuation already set by the Mod in its own price-setting of the site at the £1 it was prepared to accept from the Scottish Government in return for the adoption of responsibility for the site’s substantial liabilities.

Site assets

The assets accruing to the site include:

• the annual charges for HIAL’s lease to operate the Civil Airport – presumably now significantly increased to reflect the newly advantageous lease being conferred;
• the annual charge to Highlands and Islands Enterprise for the lease to Skykon for its wind turbine tower manufacturing base on the site;
• lesser leases that cover, for example, Sites 1 and 2, held by the Kintyre Trust  (Brian Keating) for  a 10 year period (8 remaining) and at an annual fee of £10,000.

The specific fees from the HIAL and HIE leases are not given but the HIE lease is said to be subject to five year rent reviews.

Site liabilities

The major liabilities of the site featured heavily in Part 2 of our investigations. They are calculated at a nominal £20 million to include the costs of:

• cleaning the site of contaminants including potential radioactive contamination from nuclear depth charges for which the site has not yet been screened; other armaments; and aircraft fuel;
• replacing the water supply to and on the site, currently conducted via degraded asbestos piping on an 8 mile route from Loch Killiepool and then distributed on site also via asbestos piping.
• bringing back into full operation of the local sewage treatment plant, no longer maintained as such but capable of reinstatement.

The first of these will incur significant costs and is mission critical. The second has been estimated at a cost of £8 million should it include the replacement, as-is, of the current supply.

Scottish Water, however, appear to offer the possibility of bringing a supply to the site from their own mains service on the nearby A83, which would then involve only the repalcement of asbestos piping on the site itself. Scottish Water have also indicated that they may be able to contribute £150,000 – £200,000 to the cost of this installation.

Additional liabilities not yet listed

ISOLUS listing: Site 1, leased by Kintyre Trust (Brian Keating),  is listed under the ISOLUS scheme. This identifies possible locations, some in Argyll, where sections of old nuclear submarines with radioactive contamination might be held in long term secure storage.

We understand, from earlier conversations we had with the Nuclear Decommissioning Authority when sites in Argyll were mooted as candidates for this storage, that Machrihanish Airbase Site 1 is not a serious candidate for this use. (These conversations led to a situation analysis which we published here at the time.)

If this remains the case, its ISOLUS listing needs to be removed in the interests of the buyer of the site and of the current leaseholder of Site 1.

Potential investors in the prestigious Machrihanish Dunes Golf Course will be seriously deterred from investment if the possibility of the course’s unique location in a Site of Special Scientific Interest (SSSI) is compromised by any possibility of radioactive material stored long term and literally next door.

Such investment will, of course, also be deterred by awareness of an adjacent site, as yet unscreened for possible radioactive contamination caused by past military usage; and therefore with any necessary decontamination measures yet to be deployed.

As it stands, the Site 1 ISOLUS listing is a negative in the calculation of the site’s valuation – which itself cannot be set at more than the £1 which was the MoD’s own valuation and which it was prepared to accept from the Scottish Government.

The position of Sound of Kintyre Homes

This featured heavily in Part 2 of our investigations. It remains a moral obligation on the Ministry of Defence to resolve, both by continuing the supply of essential water and sewage services until the site is sold; and either replacing the dangerous asbestos-piped water supply at the site, pre-sale or making it a legal liability that the eventual owner accepts as a condition of sale.

The situation has been clarified as follows, by Under-Secretary for Defence, Kevan Jones (don’t mention Joanna Lumley, for whose unfounded smearing he has had publicly to apologise), in response to questions raised with him by Argyll’s MP, Alan Reid:

• ‘MOD supplies water and sewerage facilities to all existing tenants, as well as the nearby housing estate etc.. MOD will ensure that the new owner is committed to continuing those arrangements (N.B. it will be in their interest to do so to preserve their investment and defray their running costs)’.
• ‘It is unfortunate that the housing estate management company (Peter Blacker’s Anglohouse Scotland Ltd) has gone into administration, but MOD will continue to supply water and sewerage facilities (at no cost to the residents) until a new company, or residents association, is formed to enter into a new contract with MOD or the purchaser.  Alternatively the residents are encouraged to press Scottish Water for a public supply’.

It should be mentioned here that the MoD’s local area representative has consistently urged the Sound of Kintyre homeowners to establish a Utilities Agreement for water and sewerage supply between the Secretary of State for Defence and the Homeowners’ Association.

This is a route the homeowners have always made clear  they have neither the resources in terms of volunteers or capital to implement.

There is no doubt that a successful purchase of the site by the Machrihanish Airbase Community Company is the best solution for the Sound of Kintyre homeowners. There is no way that a company with the interests of the wide community driving its initiative will be prepared to see these local residents left in their current position of vulnerability.

Equally, unlike a predatory developer who might purchase the site, a community company will not exploit the homeowners weakness, offering them a pittance for their unsaleable properties and then reselling at a huge profit, with the guarantee of water and sewage services supply that only the site owner can underwrite.

Prospective purchasers of the Machrihanish airbase site

As well as the Machrihanish Airbase Community Company (MACC), the Ministry of Defence has let it be known that there are two other expressions of interest from private developers.

While local rumour is free to seize on anything, it is curious that two names consistently in the frame as developers determined to acquire the Machrihanish site are Peter Blacker of the dissolved Anglohouse Scotland Ltd; and David Sutherland of Tulloch Homes, former Chair of HIAL. Sutherland was appointed to this post by Transport Minister, Stewart Stevenson who has just rammed through the new, 10year and expanded-territory lease for HIAL at the site.

While there are all sorts of legal ways to disguise the involvement of specific individuals in bidding companies, truth, in the end, will always out.

Should either of these two men emerge at any time as a developer or partner in a purchase of this site, it will incontrovertibly verify the foundation for the profound concerns existing on the Scottish Government’s and the MoD’s integrity in managing the end destination of this site.

Peter Blacker

In Peter Blacker’s case, there is a blunt but telling popular adage that ‘you don’t shit on your own doorstep’. In putting Anglohouse Scotland Ltd into receivership as he did, Mr Blacker could be said to have deposited a heap of ordure on a doorstep he may now wish to make his own.

In dissolving Anglohouse he cast to the winds the fate of the local homeowners at the Sound of Kintyre development and the farmer involved in the Bellfield Farm enterprise. He left the MoD itself to carry the responsibility for the provision of essential water and sewage  services to the Sound of Kintyre homes.

Yet he was still apparently accepted by an MoD desperate to rid itself of the liabilities associated with the site, as a credible buyer of the entire site. This was indeed the case to a degree where the factors for the Sound of Kintyre development, Hacking Paterson, warned the Sound of Kintyre Homeowners’ Association that Mr Blacker might be the preferred bidder for the entire site.

Pirates have their attractions – a la Johnny Depp – but such myths remain least challenged when kept to the world of fiction and film. We need entrepreneurs and they need reward incentives. Nowadays, though, buccaneers are confined by the requirement to avoid the human collateral damage society will no longer tolerate.

David Sutherland and Tulloch Homes

There is too much tissue around the connections the person of David Sutherland has woven between HIAL, Tulloch Homes, the Scottish Government, Transport Minister Stewart Stevenson and the Machrihanish airbase site.

These may well be entirely innocent and entirely coincidental but they are too close to home to do other than confirm suspicions should Mr Sutherland or any company associated with him be discovered to be the end purchaser, developer or partner in anything to do with the future of the Macrihanish airbase site.

Machrihanish Airbase Community Company

Most of those involved in the company aiming to buy the former airbase for the community and to develop its sustainability, came together three years ago when they worked on a major airshow mounted there. The experience gave then a collective appreciation of the assets and the potential of the airbase.

Among their number are  experienced engineers with intimate knowledge of the airbase; a qualified pilot; an accountant with public and private sector experience; an office manager, farmers, an agricultural supplier; a forestry consultant; a secondary school teacher; a community worker; and the Convenor of Campbeltown Community Council.

There are men and women, young and old, working together in the common interest of a community on the brink of pulling itself out of a long decline.

MACC also has a resource yet to step forward in support – the members of an earlier team dedicated to trying to buy the site for Kintyre.

This is a defining moment in establishing whether Campbeltown has the will to rise as one to take charge of the opportunities for self-development so many parallel initiatives now offer. Whether or not the members of this earlier team throw themselves actively into becoming committed members of MACC  – as they must -  will be the measure of the ability of this often divided community to understand the need for change.

We unequivocally support community buy outs. We feel that they are the best possible route to growing and demonstrating a mature democracy. Local authorities, central government, enterprise agencies and the private sector  might usefully come together to establish an advice and support unit to guide through such initiatives – but that is for the future.

For now, Machrihanish Airbase Community Company is a skilled, experienced and honourable group of people coming together in the wider interests of the long term sustainabiity of their community. They need all the committed help they can get. It’s a big job but this initiative can work for the good of all.

It’s time for the entire community to play on the same side.

Standards in public life

Scotland is a small country. Like any small country it shows evidence of the long embedded  perspective that public service and the public sector together offer the key to the magic door of privileged opportunity and personal wealth-making.

If trust, respect and the assumption of integrity is to dignify  public life and the public sector, it is imperative that everyone involved in positions of authority, influence and potential patronage is nothing other than proper, selfless, objective, and transparent in their conduct.

Impeccable standards in public life are a sine qua non in a civilised s0ciety. Contrary practice does not validate a departure from this benchmark.

In this case we have had first-hand experience of flat lies issued by the Ministry of Defence at national and local level.

It denied, at HQ,  that it had offered the Machrihanish site, with all its considerable liabilities, to the Scottish Government for £1 – and then retired swiftly from this assertion when we informed them that there is documentary evidence to the contrary.

A Fife-based MoD area representative attempted to smear the local reputation of the Machrihanish Airbase Community Company (MACC) by telling the Chair of the Owners’ Association of Sound of Kintyre Homes that the MoD had had no written communication nor conversation with MACC on the matter of water and sewage service provision to these homes.

The (angry) Chair of MACC had the written evidence that proved the lie.

At one meeting, a women representative of the Scottish Government rudely told a member of MACC that ‘there will be no funding for you anyway’.  This raises the spectre of a decision prematurely taken – and on what basis? One can only hope that, in probity, this cannot be the case.

The Scottish Government’s Transport Department has hardly raised confidence in the propriety of its procedures in its  progressing of an unnecessarily expanded new lease for HIAL at Campbeltown Airport / Machrihanish.

The total picture we have uncovered in this morass is that the MoD cannot be believed and the Scottish Government cannot be trusted.

We’re used to ‘perfidious Albion’ but we expect more from our own. Moreover, we have been led to expect a great deal more from the SNP. The reality is that either the Scottish Government consolidates its commitment to the directions it promised or the voters will consolidate against the sort of change the SNP wishes to see.

The majority of voters must be persuaded that there is some point in their participate in what we call a democracy. Their interest in such engagement will shortly be registered.

If people are going to be ignored, patronised and abused anyway, why should they waste time, effort and public money simply to change the source of the abuse?

The devil for the SNP is the devil everyone already knows.

Previous episodes in the reports on our investigations into this matter are here:

• Machrhanish airbase – minefield of nightmares: Part 1
• Machrhanish airbase – minefield of nightmares: Part 2
• Machrhanish airbase – minefield of nightmares: Part 3