Why the Manston DCO is being examined

When the application by Riveroak was originally made it was clear that the DCO had some serious shortcomings which were going to come under some serious examination during the process.
It was also clear that National Planning at Bristol were going to use this period to fine tune the system when the application for the 3rd runway was submitted, what they failed to grasp was that a privately run organisation wasn't going to be honest and open.

When asked the ExA (examining authority) state that
" The Planning Act 2008 process is inquisitorial – the Examining Authority (ExA) asks questions in order to gather the evidence it needs to make its report and recommendations to the Secretary of State. It does not unilaterally answer questions included in the evidence it receives.

If any evidence provided by an Interested Party includes matters that the ExA feels needs to be clarified by another Interested Party, it will direct a question or questions to them."

What they don't do is respond to people when they are frustrated by RiverOak's insistence on not telling the entire truth when asked questions. Stone Hill Park (the legal owners of the land in question) have identified this as a tactic which applies layers of deception to the process of getting to the truth.

So where are we today, the 6 months are nearly up and there are several areas that RSP have to provide evidence to support their application. These are:

Funding

At each stage RSP have failed to answer the questions on both ownership and funding. At stage 3 they stated they understood they weren't being honest and open and that was causing problems so they promised to put this right as soon as.

So referring back to SHP's comments above you begin to see what they mean when you realise the change in company structure changes the beneficial ownership from Belize to HLX Nominees Ltd based on the island of Tortola in the British Virgin Islands (another tax haven where ownership can be hidden)

So coupled with this dubious behaviour it is also clear there is no way the source of funding could ever be identified and as a reminder it is up to RSP to provide evidence they have funding at all.

It is also clear that the ExA will not accept redacted letters proving the finance so how RSP will prove they have funding will be interesting to say the least.

Night flights

From the start of this process RSP has tried to pull the wool over Night Flights even telling people at the consultations there will be none. However their application still states they want a Quota Count of 3028. They say this is for unavoidable delays and emergencies.

None of these excuses are credible because a delayed flight may be delayed or not it is the management that decides its landing slot. 

Emergency flights come under the HEMA (Humanitarian, Emergency, Military) and not one count towards the night quota count.

Is this application an NSIP

Again not proven as yet RSP's Dr. Sally Dixon was only asked to provide figures to ensure 10000 ATMs a year was possible however she was never asked to provide evidence that these ATM's were even possible as no viability study was done therefore this is purely an exercise in forecasting not an exercise in reality. This figure was produced from thin air such is the evidence produced even the average load on each plane was manipulated to achieve the 10000 figure.

 Alternatives to compulsory purchase

To ensure the CPO (Compulsory Purchase Order) is necessary Riveroak have to show in evidence they have negotiated with the legal owners to achieve ownership without such powers.. It now transpires that Stone Hill Park made an offer to RSP which would have allowed RSP to create their Cargo Hub over 12 months ago

Riveroak refused this offer and failed to tell the ExA, I wonder why?

Noise

From allowing passive noise monitoring in supporters gardens to using a noise measuring tool (averaging) RSP has attempted to apply further levels of deception to a very emotive subject. Those that lived under the flightpath came in two groups. There are those that get used to the infrequent noisy aircraft (some measured in excess of 90 Db) and there are those it became so bad they moved. What none of these groups have ever suffered is the noise and the higher frequency as proposed by RSP. The issue with RSP are they are fully aware of the effect 

Yet they offer derisory compensation and in the case of schools they offer nothing at all.

There are some that will accept anything to achieve their aim of aviation at Manston to the extent they don't care where the money comes from and in one case they make it clear that anyone who offers aviation they will support unquestionably.

It is clear from the number of questions that the ExA have asked they frequently do not get the answers they have expected. Question F2.20 is a prime example

The current series of questions are 122 pages long and it is doubtful if the questions will be answered in their entirety as RSP have a poor track record of disclosure.

Remember it is up to Riveroak to provide the evidence for their submission and not up to the public to prove otherwise.

Can opening

Further to the DCO process Riveroak promised that after disclosing that an entity, which was the beneficial owner of the RSP group of companies, was causing issues they promised back in January to restructure the group so it would be more open and transparent.

So several months later and noted by the Examining Authority

 they restructure their group as follows

Their idea of open and transparent must be a lot different from the rest of the population at large as all they have done is create a UK Ltd company Riveroak Investments (UK) Ltd, transferred the 9000 shares in Riveroak Strategic Partners Ltd from MIO Investments (based in Belize) to Riveroak Investments (UK) Ltd (RIUC)

This means that whoever the beneficial owner of RIUC is will also own the RSP group of companies.

60% of RIUC is owned by HLX Nominees LTD which is an opaque offshore entity which effectively precludes knowing who actually controls the RSP group of companies.

Haven't we been here before?

The Examining Authority seem underwhelmed by this latest move and has issued a further series of questions but with 2 months to go for the end of the Examination it is doubtful any meaningful responses will be received and Stonehill Park seem to agree.

Here is the rest of the funding questions issued on the 10th May 2019

Time will tell however I don't think you shouldn't hold your breath as to whether they respond by the deadline or even answer openly and transparently.

Follow the money

Well it is now well into the Development consent order (DCO) and after failing badly on questions relating to finance Riveroak now face a further round of questions on funding. The questions for Deadline Six can be found here (link to the DCO)
What follows is the funding questions;

Who paid for Jentex?
Why has RSP missed so many deadlines

Open session viability

Foreword

In general terms viability is the ability to take a business idea which seems great in one’s head and adds real world financial acumen to ensure that the idea can last longer than it took to think it.

When it comes to Riveroak Strategic Partners they seem to have asked Dr. Sally Dixon to produce a forecast with the express aim of achieving 10000 or more ATMs and the working backwards to decide how much to spent. It business terms this is walking before you are able to crawl.

The viability of the cargo hub idea seems to have been written on the back of a fag packet as there are simply no costings.

Questions

1.      Does the ExA think it is important that depriving one company of the land they own in favour of a business idea which may or may not be viable is what the Planning Act 2008 was written for?

2.      At some stage in the future the 3^rd runway at Heathrow will be completed and any perceived shortfall in runway space in the South East will have disappeared. Without any viability in the financials from RSP it may be considered Manston would fold as it has done 3 x in the past. Is that a reason to grant them a DCO

3.      The Government have the use of the land until December 2020 how does that affect the “viability” of RSP’s plans?

4.      In view of the questioning of Dr. Dixon at Discovery Park on the 21^st March 2019 by SHP does the ExA find themselves in a difficult situation trying to understand how Dr. Dixon comes to the conclusion that her forecast is viable? Anyone can dream *appendix transcript

5.      Does the ExA understand why the Planning Statement (TR020002-002454-7.2 - Planning Statement) states at 9.35 the following? “It considers whether reopening Manston Airport in the way intended by Riveroak would be viable”

Conclusion

As an accountant at an absolute minimum I would have considered a Pinder report an essential tool to understanding the long term viability of the plan to bring back aviation. Along with Forecasted Revenue, Annual Maintenance, Repair and Overhaul, Asset Depreciation, Inflation, Funding, Competition, future trends etc little of which can be found it the offering from RSP.

Appendix DSD Transcript

Preamble

Dr. Sally Dixon of Azimuth Associates (DSD). Azimuth is DSD.

James Strawn Barrister for SHP (JS)

At any change of speaker each state who they are so for the sake of brevity I will use their initials

JS starts off by confirming he will direct his questions directly to DSD alone as the author of the Azimuth report which underpins the entire DCO

Transcript

JS “The needs case, we are told, for this DCO, is to be found in the Azimuth report. I have just read the references and paragraph 9.35 identifies that the Azimuth Report considers whether the reopening of the Manston airport in the way intended would be viable. Have you seen that document?”

Mumble

JS “Paragraph 9.35 of the planning statement tells the reader the Azimuth report considers whether reopening Manston Airport in the way intended by Riveroak is viable? That’s what it says.”

DSD “I’m not going to disagree with you”

JS “Right so. The Azimuth report tells the examining Authority and us whether or not reopening Manston Airport in the way intended is viable.”

DSD “The Azimuth Report sets out the full” (break in sound)

JS “I’ll try it a different way. You have produced a forecast for the applicant to demonstrate both a need and the viability of that need. Haven’t you?”

DSD “No I have produced a forecast and the viability was done separately”

JS “It is essential, isn’t it, for a forecast to be forecast to understand whether it is going to occur and consequently whether it’s viable? Correct?”

DSD “That is correct”

JS “Are you saying Dr. Dixon that the Azimuth Report doesn’t do that exercise?”

DSD “As I’ve said the report provides the forecast the viability was assessed separately, I wasn’t asked to come up with a forecast which showed viability or not. I was asked to produce a forecast, whether it was viable or not was not in my hands”

JS “Dr Dixon I’m struggling to understand your answers. A forecast is a prediction of what will happen at Manston Airport and therefore for you to be telling the Examining Authority that this will happen or likely to happen you must think it viable mustn’t you?”

DSD “I disagree. I was asked to produce a forecast in terms of ATMs and tonnage. Whether that was viable is not part of the Azimuth Report.”

JS “So if the Examining Authority wanted to know if your report is likely to come about they will hunt in vain for that in the Azimuth Report? Is that correct?”

DSD “That is correct”

JS “That is helpful, Dr. Dixon, in one sense because we know not to look for that material in your report. Despite what is said in the planning report. Where is that assessment of what you have predicted is viable?”

A period of discussion occurs on the applicant’s table

JS “I’m asking you Dr Dixon, because you are the one who wrote the Azimuth Report, and I’m told you are the one to explain the need for this proposal and the need to take all of my client’s land. That’s where I’m told everything is explained. In fact I’m told your report is explained as the business plan in the Environmental statement. Isn’t it?”

DSD “I’m trying very much to help you in that what I have in the Azimuth Report is quite clearly a need case in that there is a need in the SE of the UK for a capacity for dedicated freighters”

JS “That’s not helping me and particularly as I have limited time. My question to you was “Your report was described as the business plan in the environment statement. We have established that what you predicted is viable. My question to you is where do I find an assessment of whether what you are suggesting is indeed viable?”

DSD “It is not…er….The business plan….er my forecast could not be described as a business plan”

JS “We are going over things I know, can you please answer my question Dr. Dixon. You talked about how important this is in need terms. Where does anyone find an assessment of what you are predicting as a likely occurrence could occur viably?”

DSD “I suggest that is found in a different document”

JS “Where?

DSD “I have not been involved in the production of the business plan” “I cannot tell you the answer to that question”

JS “It’s clear it isn’t in the summary of the business model for the reasons we discussed yesterday. That doesn’t tell you for example how the £306M is financed, the interest on it, what you are going to charge cargo Freighters in order to come from wherever they may be. None of that is contained in that material is it?”

DSD “That material has been obviously produced. But what I’m saying it hasn’t been produced by me and my certainty is that material would be commercially sensitive”

JS “Is the short answer is that there is nothing in the material in front of us that demonstrates the viability of Manston airport?”

DSD “there is nothing in front of us at this time as we discussed yesterday”

JS “And we recognise at para 9.35 that viability is important. It clearly is Dr, Dixon, as you could produce a report with anything you like as theory but if you cannot deliver in viably it’s not going to happen. So it’s clearly vital isn’t it?

DSD “Of course that’s intrinsic to the case, and that the applicant would not be putting a non-viable proposition before the examining authority”

JS “That assertion we say aren’t viable in figures we have demonstrated it isn’t viable, if we wanted to find where you have explained to the examining authority we are going to attract 17170 cargo freighters to this airport, we are going to spend £306M the way we are going to charge them will cover our costs we aren’t going to find any of that information in the materials before us. If it does exist we need to know where it is, Will we find it is any of the material?”

DSD paraphrase “I cannot help you”

The discussion then confirms that DSD cannot confirm that the azimuth report has been costed nor that the forecast is viable.

Conclusion

Clearly Dr. Dixon has plucked figures from the ether to come up with her forecast of ATMs which was easily demonstrated when her freight forecast divided by ATMs equates to half the historic actual tonnage per ATM. It seems there are forecasts and fairy stories.

It is also clear that DSD was unable to even justify her own forecasting ability but then elsewhere she did concede she has no direct experience in airfreight.