Prestwick’s standard approach is to force applicants to sign a confidential agreement securing a long-term commercial income stream.we submit that approach is unlawful – Lawyers for operators of proposed wind farm on Prestwick Airport’s demands
State-owned airport accused of demanding 25 years of payments from owners of proposed wind farm to withdraw their objections
Executives at state-owned Prestwick Airport have been accused of unlawfully demanding compensation payments from wind farm developers, we can reveal.
Scottishpower Renewables (SPR) wants to build 18 turbines 30 miles south of Prestwick but claims the airport is offering to withdraw its objection in return for payments for the next 25 years.
The company’s lawyers said the need for the annual payments has not been detailed by the airport,
adding: “Prestwick is obviously anxious to apply its standard approach to wind farms: namely to force the applicant to sign a confidential agreement on terms acceptable to Prestwick that will secure a longterm commercial income stream. We submit that Prestwick’s approach is unlawful.”
Documents seen by The Sunday Post show the Ayrshire airport has already received more than £8 million from wind farm companies in the past four years, including £4.4m in the past financial year when profits of £5.5m were reported – the first time the airport had been in the black since being bought by the Scottish Government for £1 in 2013.
Prestwick managers claim the proposed Clauchrie wind farm will interfere with the radar system and have refused to withdraw an objection to the plans unless SPR offers an annual compensation payment to the state-owned transport hub. SPR, which has already handed over millions in compensation payments to the airport in exchange for withdrawing an objection to another wind farm, has so far refused to agree to the demands.
The airport says the request is justified because the wind farm will impact on air space in the region. However, operators say cash from developers has already paid for a new £5m turbine-tolerant radar, which will be brought into service this summer.
In planning papers, the renewables firm suggested compensation payments from existing wind farms accounted for a substantial proportion of the airport’s profits in 2020.
TS Prestwick Holdco – a private company owned by the Scottish Government – issued an upbeat press release in December last year when it posted a profit of £5.5m, with chief executive Stewart Adams claiming it was down to the “development of new revenue opportunities and customers”.
However, in evidence to a planning inquiry, Anne Mackenzie, SPR’S senior aviation manager who previously worked at Prestwick, said: “The £4,452,000 received in 2020 would appear to be a significant contributor to TS Prestwick Holdco’s overall profit of £5.5m.”
Sources close to the process said: “The airport is using money from wind farm developers to prop up their business and include the wind farm mitigation money as revenue.”
With the exception of 2019/20, the airport made huge losses every year since the Scottish Government bought it in 2013 to protect jobs when then-owner Infratil failed to find a buyer. Ministers have propped up the facility with £43m of taxpayers’ money to save it from closure.
Scottish Transport Secretary Michael Matheson has been trying to sell the airport and announced an unnamed preferred bidder in February, two months after the airport posted a profit, but the deal has stalled.
A cargo plane’s jet engines ripped up the asphalt on the runway at the airport last month, prompting a safety alert. Sources claimed an internal management report two years ago flagged the need for remedial work on the runway but some of the repairs have not yet been commissioned and are unlikely to be done before world leaders are expected to fly in to the airport for the COP26 climate summit in November.
The airport has objected to SPR’S plans, claiming its existing radar will detect 11 of the 18 turbines. The airport states it will only remove its objection if SPR offers an annual contribution for each of the 25 years Clauchrie operates. Zoe Kilpatrick,
The amount to be charged should therefore be left to negotiation as would be expected in any commercial environment... it is part of its cost of doing business
– Prestwick Airport’s Zoe Kilpatrick suggests energy firm must pay up
the airport’s commercial director, insisted there remained long-term safety concerns about the development of wind farms near the airport and insisted there would be additional costs from staff training, as well as upgrades to the radar system.
She said: “For the years ended 31 December 2018 and 2019 SPR reported a net profit of £150m and £284m, respectively. Given SPR and the airport are both commercial organisations, the amount to be charged should therefore be left to negotiation as would be expected in any commercial environment...it is part of its cost of doing business.”
However, SPR last week submitted a report to the planning inquiry that accused airport bosses of unlawfully attempting to squeeze them for cash.
The report, by law firm Shepherd and Wedderburn, said unchallenged evidence at the inquiry showed the airport received £8.2m from wind farm firms in the last three years and ringfenced £6m for radar upgrades.
The report stated: “The evidence shows wind farm developers have already paid the full cost of installing Prestwick’s wind farm tolerant radar system and expanding it at some point in the near future.”
SPR lawyers went on to accuse the airport of acting unlawfully: “Perhaps most surprising of all is that Miss Kilpatrick was unwilling to disclose in public the amount of money Prestwick seeks from the applicants in relation to the proposal. In the absence of that disclosure and any clarity from Prestwick as to what they would spend these secret sums on, it is impossible to conclude that such payments would be reasonable never mind lawful.
“Prestwick’s approach to negotiating payments might be appropriate in a negotiation between two commercial organisations discussing a private contract to provide goods or services...we have no hesitation in submitting that Prestwick’s position on ‘mitigation’ in the context of the proposal is unlawful.”
SPR aviation expert Anne Mackenzie, who worked for Prestwick’s former owners Infratil for six years until July 2011, said: “GPA seems to be seeking perpetual support of its essential surveillance infrastructure by electricity consumers via wind farm operators, rather than
from its customers, ie passengers.” Mackenzie also gave a withering assessment of the transport hub’s future. She said Prestwick was now the fifth-busiest airport in Scotland for passenger numbers, having been overtaken by Inverness. It was already behind Aberdeen, Edinburgh and close rivals Glasgow.
She said: “Ignoring 2020, during which Covid-19 had a catastrophic impact on pax (passenger) numbers, by 2019, GPA had the lowest annual pax numbers of the five airports.”
Prestwick is also at the bottom of the league table for aircraft movements, a crucial revenue stream.
The airport conceded in its evidence to the planning inquiry that its Wind Farm Radar Mitigation Scheme had already been purchased and was in the final stages of operational trials.
South Ayrshire Council has referred the application to an independent Scottish Government Reporter and a decision is expected later this month.
SPR said: “The comments represent Scottishpower Renewables’ position on planning issues and were raised in the appropriate forum of the planning inquiry. We now await the Reporter’s decision.”
The Scottish Government said: “It would not be appropriate to comment on a live application, which will be determined by Scottish ministers in due course. Glasgow Prestwick Airport is operated on a commercial basis and at arm’s length from the Scottish Government. Ministers do not intervene in commercial discussions at the airport. The process to return Glasgow Prestwick Airport to the private sector continues and we have committed to updating Parliament on the sale process at the appropriate stage.”
Shadow Transport Secretary Liam Kerr said: “Serious questions must be answered. Ministers must urgently confirm whether they were aware of airport bosses demanding these payments and when.
“The Scottish Government has thrown millions of pounds of taxpayers’ money at Prestwick Airport without any coherent plan to turn it around. Now a questionable picture of the airport’s finances may be presented to potential buyers. The public deserve to know what is going on. It is, after all, their money.”