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The BBC's Robin Oakley reports
"Committee says it's the worst possible option"
 real 28k

Gwyneth Dunwoody
"Other things you can make an adequate profit out of but this is not one of them."
 real 28k

Lord Macdonald
"We cannot maintain the status quo."
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Paul Noon, IPMS air traffic union
"We're concerned with safety and fairness to the taxpayer"
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Thursday, 17 February, 2000, 18:00 GMT
MPs condemn air traffic sale

Air traffic controllers Only 49% of the service will remain in state hands

MPs have delivered a stinging rebuke to the government over plans to sell off part of the UK's air traffic control services.

The controversial proposals by Deputy Prime Minister John Prescott were severely criticised in a report by an all-party Commons committee.

The current proposal for a public-private partnership for NATS is, in our view, the worst of all the possible options for the future structure of the company
The committee's report
The MPs said the proposed public-private partnership (PPP) would be the "worst possible option" for the future of National Air Traffic Services (Nats).

Transport Minister Lord Macdonald responded by saying the government would take the committee's findings seriously and safety would remain paramount under its proposals.

The members of the Environment, Transport and Regional Affairs committee warned a private company would "very likely" be in a position where it was seeking to raise charges or cut costs, "jeopardising safety".

'Not thought through'

Committee chair Gwyneth Dunwoody said the report reflected concern that "possibly the government has not thought this through entirely accurately".

She said: "The National Air Traffic Service is not like anything else, they keep planes apart in the sky, they control our safety, they work in the defence of the realm, because after all they have to control what happens in the air over our cities, and we just think they are not a suitable service to make money out of.

"Other things you can made an adequate profit out of but this is not one of them."

The plans to sell 46% of Nats to a "strategic" private partner were announced by the government in 1998.

Five per cent of the service would go to staff, with the remaining 49% retained in the public sector.

The government said the sale would allow the investment needed - estimated at 1.3bn over the next decade - to cope with a forecasted 43% rise in air traffic by 2010.

John Prescott John Prescott: Facing criticism from within party
The proposals - part of the Transport Bill going through Parliament - are being opposed by the British Airlines Pilots Association and some Labour MPs, including former transport minister Gavin Strang.

The committee said if the government wrote off Nats debt of 300m, the expected 350m proceeds from a sale would result in revenue of "only 20m" after 30m costs.

It said the sell-off would also mean "operational control" of Nats would pass to private hands because some of the public shares would not have voting rights.

The committee agreed there must be changes to Nats because it was already operating "close to the limit of its capacity".

Planned sell-off
46% to private company
5% to employees
49% remains in public ownership
But it said ministers should consider making the service an independent trust.

The report said no other country was planning a public-private partnership like that proposed for the UK.

It highlighted the success of Canada's NavCanada, which was funded by a bonds issue and governed by 15 directors, including five from the aviation industry, two from the unions and three from the government.

Lord Macdonald told the BBC the government had not ruled out a trust, saying: "What we've said is that we don't rule out any kind of trust model coming in.

"We believe it should be open to us to decide what the best strategic partnership should be but if that's to be a trust model ... then we're open to persuasion on that."

But Conservative transport spokesman Bernard Jenkin said the government's public private partnership was in a "complete mess".

He said: "They have no idea what the final shape of this privatisation will be. They have betrayed all the promises and assurances they have given to Labour backbenchers."

Liberal Democrat transport spokesman Michael Moore said the report was "yet another blow to the government's misguided plan to privatise Nats."

Nats chairman Sir Roy McNulty said he welcomed the MPs' view that the status quo could not continue and private-public partnership was "the best way to ensure that Nats remains a world leader and continues to meet the needs of its customers".

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See also:
17 Feb 00 |  UK
Revolution in the air
16 Feb 00 |  UK Politics
Selling off the skies
17 Feb 00 |  UK Politics
Prescott's latest privatisation row
20 Dec 99 |  UK Politics
Prescott sets out 'radical' transport plans

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