22 February 2002
Following the £60m bail-out of Nats this week, Brian Donohoe, a member of the influential House of Commons' transport select committee, forecast that the airlines would come back for more because of the inflated sale price of the public-private partnership.
Donohoe calculated that the final result could be around £200m coming from the public purse.
Nats was partially sold off for £750m last July, a price considered excessive by some and especially since the events of September 11.
The Airline Group, a consortium of seven carriers, including British Airways, EasyJet and Virgin Atlantic, took a 46% stake in Nats. The government retained a 49% stake, with employees taking up the last 5%.
Donohoe said the way to protect future public funds was to truly transfer risk to the private sector. 'That means with something like the 11th of September, they [the Airline Group] shouldn't be coming cap in hand to the government to borrow. They are the ones that should bear the brunt,' he told Public Finance.
Donohoe said the failure of the Nats sell-off, and controversy surrounding the London Tube, undermined the case to use PPP to deliver services. He added that PPP should be restricted t o delivering new buildings.
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