 Good morning, everyone, and welcome to the 19th meeting in 2018 of the Rural Economy and Connectivity Committee. Could I ask you all please to make sure that your mobile phones are on silent? The first agenda item is a decision on taking business in private. The committee is asked to consider taking item 7 and specific future items in private. Item 7 is the committee's approach to the pre-budget scrutiny and anticipated future items include the consideration of the committee's approach to the Transport Scotland Bill and the committee's approach on pre-budget scrutiny and options for post-legitatives scrutiny. Are members agreed? We are agreed. We now move on to agenda item 2, which is subordinate legislation. This is an affirmative instrument that digital government bodies have detailed on the agenda. The committee is going to take evidence from the Cabinet Secretary for Finance and Constitution and a motion seeking for the approval of the affirmative instrument will be considered at item 3. Members should note that there has been no representations to the committee on this instrument. I should say firstly that it seems unusual that this committee is considering this SSI given its subject matter. We are responsible for the digital infrastructure element of the digital strategy for which Mr Mackay has overall responsibility but not those specific items to which these SSI addresses. It seems that the remit of some of our subject committees are out of sync with us with the portfolios and some portfolios of members of the Cabinet. That does not mean that I do not welcome you, Mr Mackay. Before I do, I would just like to ask members if there are any declarations of interest before I go through that and we deal with this section. Are there any declarations of interest? I do not know whether there is a declaration of interest or not, but I am the PLO, which is something that I have to admit to in the chamber. Just since it is digital matters, I am a member of the institution of engineering and technology and a member of the association for computing machinery. Mr Mackay, Cabinet Secretary for Finance and Constitution, I do formally welcome you. I also welcome Susan Bram, head of data sharing and access, and Graham Fisher, head of constitution and civil law. Cabinet Secretary, would you like to make a brief opening statement? Thanks, convener. First of all, to give further clarity, my responsibility within Government is for digital public services. I suppose that that is partly the reason for my appearance and presentation. This morning, I recognised that digital is across portfolios within the Scottish Government, but that is the area in which I lead. I welcome the opportunity to discuss the draft regulations, which I respect are of a technical nature. They offer the potential to improve the delivery of public services for the people of Scotland. I would like to start by setting them in context. Part 5 of the UK Digital Economy Act 2017 provides for the sharing of personal data between specified public bodies set out in schedule 4 for the purposes of improving public service delivery. The regulations laid in the Scottish Parliament on 17 May add specified bodies to schedule 4 to enable those bodies where appropriate to share personal information in order to improve public service delivery. I would like to highlight that the powers permit but do not compel data sharing, data protection law, which governs how personal data is processed and shared continues to apply, of course. Both the act and the regulations made under it together provide for data to be shared only by specified bodies and for tightly defined and specified objectives. The objectives are being created in separate UK regulations. The digital government disclosure of information regulations 2018 laid in the Westminster Parliament also on 17 May, in which we are cited and full in the policy note. The Scottish regulations proposed to add a limited number of bodies, specifically the Scottish Government, Scottish local authorities, Skills Development Scotland and persons providing services to these bodies to share data for and only for the purposes of a specified objective. For the bodies being listed in the regulations, they include a multiple disadvantages objective, a television retuning objective and a fuel poverty objective. Those measures are supported by further safeguards, including an information sharing code of practice, which sets out the principles, processes and guidance for the use of and disclosure of information under these powers. The Scottish ministers will expect public authorities and other participants in an information sharing arrangement to agree and adhere to the code before any information is shared. Failure to have regard to the code may result in public authorities losing the ability to disclose, receive and use information under the powers. We welcome the powers that this UK-wide legislation brings and look forward to further collaboration with the UK Government to ensure that the full potential of the legislation is realised in Scotland. I hope that this has been helpful and, of course, happy to take any questions. The first question will come from Stuart Stevenson. I note to paragraph 21 of what has been provided to us that one of the organisations with which there may be sharing is Her Majesty's Revenue and Customs. Given that this is clearly an instrument related to UK legislation and that appears to be cross-border in its scope, it would be helpful if the cabinet secretary can confirm that the intention is that the data-sharing be across relevant bodies in all the Governments that are affected by this. I am only interested in the Scotland-UK relationship. There is a crossover between reserved function and devolved function. If it was just devolved, we could legislate and bring regulations to Parliament for our own interests. Clearly, there is joint working with the UK Government where there are reserved functions, as is the case with HMRC. Therefore, yes, the interrelationship with devolved administrations in the UK Government and all public bodies related to that would be expected to co-operate, as I say. However, this is not compulsion, this is permission. Stuart Richard. Good morning, Cabinet Secretary. In the past, we generally had different agencies. We did not know people's information and there was a lot of problems. I welcome the fact that there is going to be information sharing. However, when there is information sharing, the public is the individual able to ask each and every agency that has their information what they hold on them. This, in no way, interferes with changes or amend anyone's individual rights to seek that information. This is to, within all the safeguards that we have now in relation to data sharing and information and data protection, within that, allowing specified bodies for a specified purpose to be able to share that very particular information for a good reason. All the usual checks and balances are there. Indeed, the information commissioner has been consulted on those proposed very specific regulations and actions as well. However, yes, it no way impedes individuals' rights to seek that information. John Swinney. Thanks, convener. I welcome the fact that there is a lot of privacy and that is considered to be very important and what other members have just asked as well. From my experience and other committees, on the previous and finance committee, currently in the economy committee, a big problem has been trying to get data out of UK agencies like HMRC, that we have not... Scottish Fiscal Commission and others have not been able to get data out of these. Are you anticipating that this is going to make it easier for Scottish Government, Scottish public bodies to get hold of UK information, which would be helpful to us in a whole range of areas? You also said that we would only permit them, so will they not be required to give us the information that we need? Two points, convener. First of all, what I am bringing to committee is that affirmative procedure to permit those bodies to be able to share information. That is what I am seeking committee approval so to do and ultimately Parliament. There is then a separate question around how far the agencies named go to use those powers. Those are areas that, as parliamentarians, we may well wish to encourage, such as bodies being able to share information to tackle campaigns, for example, to target multiple deprivation. I think that there is good cause for those regulations to be brought forward. I would expect, because of the good principle behind them, that agencies would participate. It is providing a gateway, essentially. That is my role here to provide that gateway to open the door to appropriately, carefully and within all the privacy checks and safeguards that have been outlined in the documentation that you have to have that permission to exchange information. It is a good thing that people's data has been tightened up and it just cannot be used willy nilly across even the public sector, even when there is good cause. It is very specific to the bodies, the conditions, the safeguards and the objective. Within that, Mr Mason, of course, I would like to think that, if there is good cause, that agencies will participate within that. We have clearly outlined the purpose and whether it is multiple deprivation or another really good example that I am sure members would ask me with a different hat on, how do we target young people that are not in education, employment or training? Right now, we run campaigns and various agencies will do their best to try to target those people. If we can have the data on which young people are most excluded, it gives us a way, an agency or appropriate agency, such as Skills Development Scotland, as is proposed, a way to contact them using that data. I cannot see how people would wish to object to that, but, of course, I am putting that in the context of expecting agencies to comply with the kind of principles that public bodies would be pursuing there. If it becomes an issue that there is a lack of participation and I am aware of it, I will certainly raise that as appropriate, which is the essence of the question, but that goes beyond what I am seeking committee to do today. Of course, we would want to be proactive if that data has not been shared in a fashion that meets the policy objectives that I think we would all agree upon. Of course, at least two members of this committee have a very specific request around HMRC in the matter of income tax returns that I should not delve any further into, convener, but it is an example that has been appropriately raised by Mr Stevenson since he has pointed to himself. I am not exposing him here as to data sharing and seeking assurances that bodies are sharing the information that should be shared appropriately with the Scottish Government, but that is a whole separate subject and not one of the specified functions that I am asking you to approve today in fairness. Jamie, I think that you are the next question. Thank you, convener. Good morning, Cabinet Secretary. Two quick questions. The first one is around the seven-week consultation that you run. Can you share with the committee any feedback, both positive or negative, on your proposals and how you addressed any feedback that you were given? The second one is just turning to the policy objective section 19, where it talks about TV retuning objectives. It states that Scottish local authorities are listed against the TV retuning objective in order that they may share data with the DWP and the Secretary of State for Defence. Do you have any idea what that means or what the practical implication of that may be, because it is quite hard to actually work out the consequence of that? I think that there are both very fair questions. First of all, on consultation, there was an appropriate consultation exercise. There was no great objection in one area that I would want to draw attention to because the information commissioner was satisfied with those proposals, so I think that that is quite important. I will ask officials to clarify if there were any changes in light of the consultation, but essentially the level of return was not such that would give me any cause for concern. I will also ask for officials to cover the TV retuning issue, because frankly, when I look at the list of priorities and profile, some clearly have greater importance to the Scottish Government right now, such as targeting those who are not in positive education, employment or training, or tackling multiple deprivations, so those are the two very specific ones. I did pose the same questions and why are we having to do something on retuning. To which the answer was that it is essentially preparing for should the UK Government and in that matter change that we are in an advanced position to be able to share information that they would want to if there is assistance required in that regard. I think that the more substantial powers here are functions around tackling deprivation and in terms of young people not in those or more exposed to worklessness and so on, but there were no major concerns in the consultation. I think that officials can add to that. Cabinet Secretary, whoever you would like to bring in to clarify that. To confirm in relation to the consultation, four responses were received, two from individuals, one from the Information Commission's office and another from the Welsh Government. In terms of specific feedback, ICO called for the need to explain the nature of data sharing that would be permitted and to be specific when describing particular instances of data sharing to support public service delivery. In response, a privacy impact assessment has been carried out and that has been issued and should be part of your committee papers. Specific sharing in the future would be subject to further privacy impact assessments. To be clear, there was no suggestion that we needed to change what we were asking for just that the necessary assessments were undertaken. That's been done and that's been provided to the committee and should be on your pack. Cabinet Secretary, do you want to ask Graham to come in or has he answered all the questions? I think that's covered it all. Jamie, are you content with that? Stuart Stevenson. I just wonder if officials perhaps could confirm that the HMRC's role in re-tuning TVs is because they know who are the people who have free TV licences and it's an attempt by the local councils to support those people as part of the migration from analogue TV to digital TV where there has been, particularly in the early days, quite a lot of frequency changes that some of our older citizens have not found easy to cause their equipment to re-tune and it would be helpful if somebody could confirm my suspicion that that's actually what it's about. Cabinet Secretary, if you don't know the specific answer to that, I'm very happy that you could write to the committee and confirm afterwards. As I said earlier, I'll write and give you the detail of that because some of what we are doing is simply including the devolved bodies within the framework of policy where it interacts with reserved functions of which broadcasting and HMRC are reserved. If you wish further information on that very specific issue, which may not come as a surprise to me, then I'll provide that to the committee. To me, neither. Thank you, Cabinet Secretary, for offering that. Does anyone else have any questions? Cabinet Secretary, would you like to make a closing statement in relation to that? Only insofar as to say that all the necessary checks and balances are in place, I think that we're on a very strong policy environment in relation to data sharing, but there are sound objectives behind that. I think that those regulations help us to progress with that in the fashion that's been agreed with the UK Government and with legislation in both Westminster and the Scottish Parliament. I'm happy to proceed. Thank you, Cabinet Secretary. We're therefore going to move on to agenda item 3. This is the formal consideration of motion S5M-120602 in the name of the Cabinet Secretary, the Royal Economy and Connectivity Committee, to recommend that the digital government's open brackets, Scottish body, closed brackets regulations 2018 be approved. Cabinet Secretary, can I ask you to move that motion and to make any further comments that you would care to make? I move and no further comments. Okay, do any members of the committee have any comments? Okay, therefore the question is that motion S5M-120602 be agreed. Are we all agreed? Yes. We are agreed. Thank you. I therefore would like to thank the Cabinet Secretary and his officials for attending the meeting today. I'm going to briefly suspend the meeting to allow the panel to depart and a changeover of witnesses. No more than five minutes, committee members. Thank you. The meeting is suspended. Good morning again to everyone. We're now going to move to agenda item 4, which is Glasgow Presswick Airport. Before I do so, I'd like to ask if there's any members who would like to declare an interest in relation to the airport. Stewart. It's in relation potentially to military flights. I'm a Northern Area Committee Member of the Highland Reserve for System Condets Association, which has an interest in the RAF. Thank you. I'd also like to welcome John Scott, MSP, to this meeting as it falls within his constituency. This is an update on Glasgow Presswick Airport and its financial management. In advance of the evidence session, several members of the committee including myself attended a tour of the airport's operational facilities on 4 June 2018, for which we were extremely grateful for the opportunity to do so. I'd like to welcome from Glasgow Presswick Airport Miller, the non-executive chairman, Stewart Adams, the chief executive officer, and Ian Forgey, the director of finance. Andrew, would you like to make a brief opening statement up to five minutes? Okay. Thank you. Thank you, chair. As you say on my right, Stewart Adams, apart from being the interim chief executive, Stewart joined us in October and he has a very impressive aviation background experience. Most recently, he is managing director of Loganair and prior to that, in Tiger Airways in Singapore. So, very well qualified to sit on my right-hand side. On my left, Ian, one of Ian's great strengths is the fact that he used to work at the airport in the late 90s, early 2000s and rejoined us to play part in the team. I welcome the opportunity since the last time that I actually appeared here to update the committee, but I would like to thank the committee members who came to Presswick for their two, three-hour visit some two weeks ago, which I hope gave them a greater understanding of what's happening on-site with the enterprise. I can assure the committee that our investment in the business is being matched with a relentless pursuit not only of new business, but in committing to achieving maximum efficiencies in terms of the investment, in terms of the reduction on the operating loss. In the financial year 2017-2018, we handled 702,000 passengers, which was an increase of 3.5 per cent on the previous year, and we continue to press hard for new customers. Last year, we approached 23 individual airlines over a long period of time during the 12 months, and the work continues with the team to attract more and more business into the Presswick area. From a cargo point of view, we had 17 meetings with cargo airlines in the last 12 months. The prolonged uncertainty over Brexit and the full impact on aviation is still disrupting air passenger travel in the UK along with investments. At the same time, there is an on-going process within the aviation industry of consolidation, and it has major implications for the pattern of airline basis and the location of the key personnel, but also a consequent impact in terms of the airport's infrastructure around the UK. The added challenge to Brexit is the frustrations over the delays and the reduction of air passenger duty, which was scheduled to be around the 50 per cent level, gradually going to zero over a four-year term, which clearly has not happened, and the committee will be aware of the reasons why that did not happen. Our increase in total gross revenues from £13.6 million in the year 2016-17 to anticipated £18.2 million in 2017-18 is quite substantial. However, that last number is unaudited and will yet prepare the year-end accounts and place them before the Minister who will place them before Parliament towards the end of this year. Freight traffic and military flights, private aviation, engineering and service activity continue to develop and ensure robust signs of growth and a consequent increase in revenues and will do in the future years of the business. We have added, as Mr John Scott knows, Chevron to our engineering mix on the airport. We employ nearly 50 people, which is a new business and enterprise that we managed to seduce into our enterprise and they are performing very well. Additionally, we have secured the services of three new non-exec directors whose background and experience is quite significant, not only in terms of independence of their experience but their background and experience in aviation and on a global basis. Despite the challenging operating budgets that we have had, we have very little outsourcing of services. We are a fully integrated business and we provide services to all our enterprises without outsourcing. We work within an area that employs 4,000 people. Despite the challenging operating budgets and very little outsourcing of services, we are committed to paying the Scottish living wage and we are in negotiation with the trade unions on how we move forward to achieve our 2020 commitments. I would like to thank the committee for the time today in terms of our opportunities. There will be some questions, I am sure, about why the market environment has changed. One particular example I would give is fuel since I have been the non-executive chair of Presswick Airport, has hit a low of $45 a barrel to a high of $80 US a barrel. We consider that fuel costs and aviation on airlines can be between 50 to 65 per cent of their operating costs. That is a significant impact on the bottom line and we have to be cognisant of that because the DNA of airports is the reflection of the DNA of the airline customers that fly into the airports and we have to be cognisant of their issues driving the business. It is a brief overview in terms of introduction but it gives you a balance sense of the challenges and the opportunities that are presented to management. Despite the shadow of the factors that I have highlighted, which cover the whole of the aviation sector, I firmly believe that Presswick Airport can have a sustainable future as a distinctive, multi-faceted aviation centre and that such a centre can be a major benefit to not only Ayrshire but also to the Scottish economy. Thank you, Andrew. There are a series of questions that I am sure that we will have during this morning. If I could just remind you to catch my eye if you want to answer them. If none of you catch my eye, I will catch one of your eyes and I would have just asked when you were answering the question if you could just keep looking at me it just helps me then to make sure that I can bring the next person in at the right moment. So the first question is from Richard Lyle, Richard. Yes, good morning, gentlemen. I would like to convene, I certainly enjoyed my visit on 4 June. I am certainly impressed with your new board, but as I have previously said, I am a supporter of your airport. But, like others, I would like to know why is it air transport movements down, passenger numbers down, freight handling down at Presswick Airport and they have effectively remained static over the last few years. Well, nearby competitors have seen significant increases. In fact, you know, basically, we need to know why is this and what action are you taking to reverse this. Who would like to head off on that, Stuart? Thank you. I think in terms of the numbers, the passenger numbers do show very small growth over 17, 18, over 16, 17, is about 3.5 per cent. When it deludes in ourselves, that is not a number to be proud of. In terms of freight tonnage, we are actually up about 3.5 per cent as well. So there is more disgrowth in both areas, but there is much room for improvement. When I came into the business only seven or eight months ago, I reviewed the target list of the airline customers with my knowledge and background. We changed the approach. We tried to do higher-level approaches to the chief executive levels of various airlines to understand the issues that they have. I think that the main challenge at the moment is that although the airline industry is booming and capacity is growing, the number of operators there is reducing. As Andrew touched on earlier, over 12 months we have approached 23 separate airlines about passenger flying. Some have shown some interest. A great deal of interest from a separate operator who we put a package together for that we are very happy with. The commercial was all stacked up, but there was an operational issue with the pilots that meant that they could not operate this summer, which was very disappointing as we were trying to get them back next summer. My impression is that I joined the business. I had no history of the business. I was an airline man through and through, but I worked in on day one with no preconceptions whatsoever. The thing that I was impressed with was the level of ability within the business, the actual infrastructure of the business. Although it is tired in some places, it was in far better condition than I thought it would be in. If I were an airline being brought to Prestwick, is there anything there that puts me off flying from the passenger point of view? No. It is a very difficult environment at the moment given the strength at Edinburgh and Glasgow. A lot of the bigger carriers now, easy jets and the like, are reasonably settled at these places, and they have shown no inclination to expand or take some of that operation to Prestwick rather than Glasgow or Edinburgh or anywhere else for that matter. It is hard work. We constantly, we have a business development team and we constantly work on that. The passenger and cargo side, small growth, the encouraging thing from my point of view, the other revenue sources within the business are all showing signs of increase. We have an extensive property portfolio and we have gone from about 50 per cent occupancy to 90 per cent occupancy. Some of the other areas are growing significantly. The fuel supply that we provide to private customers is on the increase as well. There are success stories within the overall numbers, but passenger numbers certainly need to increase, but it is very difficult at the moment. At the meeting when we were there that you won't see an increase in passenger numbers. I take on board the factory airlines, but I tend to put part of me cross-party groups for airports. They are all saying, we need more slots, we need more slots. You've got loads of slots. I've been in your airport at 11 o'clock at night, and I was the only person there, apart from the staff, waiting for my daughter coming back from Barcelona. You've answered in some ways my second question, but what are the barriers to Glasgow Airport attracting new airline customers? What needs to be done to overcome them? Is there a fact that you can offer better service, less of landing fees? You tell me. It's a very attractive commercial package in place that I inherited from the previous board, which is as good as I've ever seen in my time in aviation industry. So commercially, we are as attractive as any other airport in the UK. So it's not as if we're sat there with a very high tariff that's putting potential customers off far from it. Besiwch, we work in partnership with South Ayrshire Council, for instance, who sit at various meetings with us and airline customers asking how they can help. So we're trying to create packages that go out with the normal packages an airline would expect to see from an airport. But at the moment, most of these airlines seem to be entirely settled with the operation that they've got at other airports. They make money there. There's a risk to them to try and move some of that. They could cannibalise some of their existing Scottish activity, so I can understand that fully. So we now need to adjust their thinking. There's a lot of increase in the low-cost model in the Eastern Europe, so we're now trying to attract some of the Eastern European low-cost carriers by direct contact with high-level executives, but it is difficult. John, you've got the next question. Probably to follow on from Richard Lyle's line of questioning. Specifically, a link to London has been reported as being quite important. Is that specific a possibility? Is that something that you're looking at? Is it important? As far as I'm concerned, again, with my background, I feel that we can sustain a London service. I think that a London service is vital. We've got the catchment around the airport that could justify it. But again, if you look at the sheer quantity of flights between, for instance, Glasgow and London, it's very, very difficult. But we have approached fairly recently a number of carriers with a package to try and attract a London service. But again, there's no point in having one service a day. You need multiple frequencies for the business travel. You need three or four per day. That's a fair degree of commitment from an operator. But it's work in progress. I certainly think that the airport can justify a London service. Just adding to that point, if I may, there was a conference last week in Olympia, an Irish-UK aviation conference, and two carriers, Flybee and EasyJet, both had Presswick. He threw on the long-term development plans, which is part and parcel of the Heathrow hub project and how we are actually involved in that sort of process. So there's guaranteed access for Scotland by way of slots at Heathrow, and we know the airlines have got ourselves penciled in in terms of the future. But that's a fairly slow-bun project, but we're actually working on it. Okay. I mean, if passengers are the real challenge and you seem to be making progress in other areas like selling fuel to the military and other issues, what would the position of the airport be if you just dropped passengers altogether and only did freight, military and so on? Would that make it more profitable, less profitable? Do you know? We're in the middle of... We're in the middle. We've just started a major exercise that will review all the revenue sources within the organisation and allocating fixed costs against them to fully get a better understanding of what areas of the business perform. And I've no doubt some of them do perform reasonably well in which ones are a real drain on the resource. So that is work in progress at the moment, and the cost of the passenger operation will be identified as part of that. You can't say right now if the passenger bit is making a profit or a loss. I think I said to committee members when the visit took place that it's clear to me the passenger side of the business does not make money. It's... And you were very open and very helpful on the visit. It's quite helpful to assume that the information that you gave at the visit hasn't all come back here. So if you could make sure that you repeat that information for the record as well, because we didn't keep a record of it, I do remember that conversation, but it'd be helpful for other committee members. John, do you want to come back? Just to switch on to freight, then, if I may. If you're trying to grow freight, does that mean that the existing operators get a bit bigger, or do you have to bring in a new operator on freight who would actually use Prestwick as a base? Can you explain maybe how that works? Ideally, you'd like both. We're seeing significant growth from our cargo lux operation at the moment, because although they haven't increased frequencies, they cancelled a service that they had gone to Stanstad. So a lot of the Stanstad cargo actually makes its way up to Prestwick and departs in their aircraft from Prestwick. So the tonnage, which is where we make our money, is in the increase on existing movements, if you like. But we have employed a well-known cargo industry expert who lives 10 minutes from the airport, he's retired, and he's managed to open certain doors within the cargo industry. It's a very niche market, and certain doors have been opened to us now in discussions taking place where we can discuss the capabilities at Prestwick, which are fairly unique, certainly within Scotland. We can handle the largest aircraft that anybody can throw at us on very, very specialist loads. I'm extremely impressed with the cargo capabilities, but it's getting the message out there that we're here, we're open for business, and we're very capable. We're down, you could unload and get the freight off a plane much quicker than they could say at Stanstead. Yeah, in terms of some of the... It's clear from some of the discussions there's frustration at some of these airports about the length of time the freight takes to clear customs. For instance, we can clear customs very, very quickly. So the cargo lux aircraft comes in, it's off loaded, and the lorries are loaded instantly and depart within an hour. It's clear there are some frustrations and we must obviously sell the benefits that we've got in terms of an easy transition. That's great, thanks. Just that there are some other questions. I'd just like to ask a question. When we were down at the airport, what impressed me was the closeness of the railway connection and the fact that you were bringing your fuel in, I think, by railway line rather than by pipe. It seems to me that with this great freight capacity that you talk about, that one of the simple additions which would make you stand above other airports is a connection to get rail freight into your airport. Do you agree that that would be a significant advantage? There is a significant advantage, Mr Chair, in terms of the opportunity. The connectivity from freight from rail to the airport is not 100 per cent connected, but as part of a Heathrow hub project, it was rail but also sea part of that bid in terms of connecting all the dots up to make sure that we could ship prefabricated pieces to the third run that we've done at Heathrow, so it was significant. The security supply is a good thing. The other good thing is nearly, well, slightly less than a third of our passengers, use the rail connection to come to the airport, which has environmental considerations and is the only airport in Scotland that you can achieve that, which is absolutely fine. Also, as you say, the security of supply from a fueling perspective in terms of direct shipments from the East Coast, from Grangemouth, is really, really important. The connectivity from a freight perspective is an embryonic issue in terms of getting the correct and proper connections, but it's part and parcel of the new runway in London that Heathrow. Jamie and then Peter. Thank you, convener. Good morning, panel. Can I revert to the previous line of questioning around the costs of the passenger operation? It's fair to say that Prestig Airport has been receiving quite a substantial amount of loan funding from the public purse for nearly five years now. How is it the case that, at this point in time, no one to date has done any analysis on the cost of running the passenger operation? How do we get to a place where that work has only just started? If, after doing this piece of work, your suspicions ring true that this is a loss-making part of the business, would you recommend to the strategic board the cessation of that element of Prestig Airport? Can I ask, when you're answering that question, to stick to the examination of the viability of the passenger numbers because loan funding is going to come later, and there may be some dissent from other members of the committee to say if you could stick to the viability of passengers and how you're going to report that. I can't really comment and say too much about the processes and what was done before my time at the airport. There are management accounts. There are indicators there, so we're not entirely without information on this. I need a far more detailed assessment of the true costs, not only of the obvious costs, the staff costs, the infrastructure costs, but the overhead costs as well. We've decided that as part of an overall review of the whole business again, we should re-examine that. I've got various numbers now that I've been provided with. I'm going to retest because it was some time ago since it was last done. It's key that we understand how each part of the business is a multi-faceted business that has numerous revenue sources. We need to understand what all the costs are associated with each of these. Obviously, we've got those at the moment, but I'm having those re-checked at the moment. Neither of my questions have been answered. You can push on the passenger numbers, but not on the loan. It's not about the finances. Mr Miller has been around much longer than you, Mr Adams, as to why no one has done this piece of work to date. My second question was, if the numbers are true that the passenger part of the business is indeed a loss-making business, would it be the strategic board's view that they suggest that part of the business stops and focuses on the more profitable sides of the business? That was my question. I'll answer that because I have been around and have been here for over three years. What surprised me when I came into the business was, for instance, just an energy cost. The mapping of a total energy bill was not mapped to the lines of activity of the business. The electricity bill wasn't mapped, for instance, to the terminal facilities or the assets of the business. We had to do a mapping. Just on that one thing, we had to install metres around the plant to get subsets of the total picture to build up lines of activity in the business, lines of revenue, lines of cost, and map that to the balance sheet in terms of the assets to get a better understanding of where the costs lay. There was more of an aggregated approach to the business. I will tell you, just on pure electricity supply, there were some surprises that came out of that exercise. That's just one element, probably about 50 to 70 elements of costs that we're wrestling to ground. My dear Linda Frontier on the left, our financial is helping us with that particular exercise. I want to say something. To clarify, I've only been in the business for six weeks. Eight weeks now. It probably feels like six months. I was there in the business in the year 2000, so 17 years ago it was a very different framework. I want to really understand what's going on in the business streams of the business, and it's not clear for me on the outside. It's early days, and that's the work that we're undertaking now to really understand the business streams and see what the profitability is and the loss-making side of the business to make a recommendation to the shareholder later this year. Ian, can I just ask if you surprised that information that wasn't available when you arrived there? Well, it's only six weeks, so I'm having to get up to speed. It's not in the former that I would be used to, and it's certainly not as clear as I would be used to in running the business and experience that I've had. I would expect the board to have better information to be able to run the business. Okay, thank you. Peter, and then Stuart. Yes, gentlemen. You're looking for new opportunities for freight. You want to grow freight. I have a suggestion, and maybe you've looked at it, maybe you haven't, one of our great success stories is food and drink in Scotland, and we export thousands of tonnes of farmed salmon every year to the USA. You see well now it's produced in the north-west of Scotland. It goes in a lorry from the Ardunt to Heathrow, as I understand it. The vast bulk of that fish is exported via Heathrow, having passed your airport on the way south. Is there an opportunity for you to get involved in that marketplace? Yes, because there is a significant amount of freight that is shipped on the way to the USA. Who would like to... Andrew? I've got the most experience in this. You are correct and proper. There are substantial movements between, I would call it, fresh seafood, which tends to go by road, which tends to be in marine tanks, which is live. The consolidation point is a place called Larkhall, a very near Mr Lyle's constituency, and there's about 30 to 35 trucks a day go there. Now, brine seawater tends to be incompatible with freighter services because of the salt water and corrosion. In terms of the smoked salmon, et cetera, you're absolutely right. It's a substantial market, not only to the United States but also to Asia. The situations are a consistency of supply in terms of 365 days' consistency of quality, which I'm not saying the Scottish market doesn't provide, but there are multiple providers in terms of, not only our region in Scotland but elsewhere, that consolidate that process to provide that consistency of supply. Now we have approached some of the players. I've even been to Gear, to the Halibut production plant there, which was a fascinating facility. We've had discussions with some of the producers. Even the right wing left brain thinking. I said, how can we improve our chances? They put a smoking house at the end of the runway because that is when we know between fresh and preserved because the market producers are very diverse, they consolidate, but it's a good opportunity to make the switch in a saturated way. It wasn't a silly question. We've had dialogue with the COF in drinks industry. We've had dialogue with some of the freight carriers, etc. A lot of the stuff, the drink, goes by sea of course, and some of the preserved fish products go by sea as well. So it's about how we actually attack that. Stuart. Thank you very much. We've had dialogue with the panel on possible ways of expanding the business and developing the business. In particular, if we can identify whether there are constraints that might be for others, including Government, to address, because if we can identify those, then we can go and do something about it. Just picking up one or two things that have come up, we talked about the prospects for rail freight coming in. Are we aware whether there are gauging issues on the rail network that inhibit the delivery of containers? I know that a lot of Scotland's rail network is difficult for a lot of freight, and if that's the case, have discussions taken place with network rail about regaging? I have a number of questions, but I'll just do them simply one by one. I can't answer that technical question. I do know that the rail yards where they are, most of them are redundant in the Mr Scott's area, but it was part and parcel the multimodal hub proposition to Heathrow. The major opportunities for the business going forward beyond freight are to do with the spaceport situation and the Heathrow hub, which we're actively working on. The issue in terms of the Scottish supply, the issue in terms of being at railheads to bring and consolidate at Presswick is the biggest issue that we have. Multiple suppliers having to consolidate, and I'll be honest with you in terms of freight access to the very northern parts of our dear country, it's somewhat limited and fragmented. That is an issue. We've got W11 and W9 gauging up to Inverness nowadays. However, I'll leave that one with you. Let me just move on to one or two others, because I don't want to make a meal out of something that's not going to be digestible. The one thing I haven't heard in any discussion is whether you've been discussing with tour operators, because clearly tour operators, the majority of tours are now air tours, but equally, you're relatively adjacent to Gwruch, where there are now very large, among the world's largest, cruise liners coming in. Clearly a lot of cruising is intermodal, particularly to aviation. I just wonder if you've been talking to tour operators in general terms about flights, but also in particular to the cruise industry. I say that my very first flight out of Presswick in 1972 was a sub-Scot tour on an aeroflot charter, which is a Scottish firm using foreign. That relates to perhaps your discussions with Eastern European Airlines, of course. Interestingly enough, the separate airline that we got quite far advanced with, we involved local travel agents and tour companies to try and encourage them to come to Presswick. To be honest, the response was very, very good. They thought that there was a good demand for seat-only market. A lot of Scottish people have accommodation or own houses in Cyprus, and they were trying to push Presswick as a seat-only option, rather than Glasgow as more packages, the operators in Glasgow sell packages rather than seat-only. We work very closely with them. As far as direct approaches to that type of traffic, no, but it is on a list, to be honest. We are in the process at the moment that we are bolstering the commercial team with a new commercial director who will be in post probably within the next month, and that's certainly on a list of things that we'll be asking them to explore. Some of the cruise liners are carrying 2,500 passengers. Clearly, if that's the starting point or the ending point of lots of people's cruises, if you can get a couple of hundred of these on a plane back to the States, I'm not trying to tell you to do your business because I can't do that, but I do want to be sure that you're pursuing all the avenues. That's another one, because the surface travel between somewhere like Gourac and Presswick is predictable and pretty stress-free compared to some other alternatives. You're absolutely right. A lot of changes have happened since the 1970s. I remember them very well. I used to work for British Airways and I was in the last flight from New York to Glasgow Presswick Airport in the LA80s. There has been a change in the distribution and the product additions to the market. Distribution has changed via the internet, but the specific market you're talking about is derived around inbound traffic, inbound international traffic. There is a growth in the cruise market undeniably. There is an accelerator effect because of the reduction in the value of the pound against the key currencies for that inbound market, which is providing a short-term stimulation. You can see that between the differences between Glasgow and Edinburgh in terms of the current performance just now. We have no substantial inbound market in Presswick. It's sun-sea and sand outbound and the balance is a very small percentage inbound. We currently have no access to long-haul international services. We have been dealing with some of the companies. I don't want to mention their names, but there has been a migration from the low-cost short-haul model to the low-cost longer-haul model and the other four or five airlines playing in that space. There is the development of some of the companies, such as IAG for instance, with a company called Lebel, where they have taken a bit of a sharp intake of breath in regards to changing that model to the low-cost long-haul because of the current situation with the biggest player in this market who has some balance sheet issues in terms of strength just now. I will ask a brief question. You are particularly well-placed for long-haul because of the size of your runway and your excellent weather conditions. You are already dealing with a lot of long-haul in relation to cargo, particularly ad-hoc cargo. Is that a marketing advantage in trying to see if you can develop some of the charter long-haul to come in in the first instance, which would then create an environment where scheduled carriers might view the opportunity on the back of traffic built in charter? That's very true. You're absolutely true, and it's in the DNA of Glasgow Press with airports since the very beginning of time when they became an airport. It was a by-government policy by-instruct, part of the bilaterals, if you wanted to fly internationally. You had to do it out of Glasgow Press with airports. The market has changed, lengthening and runways, other airports developing. The deregulation on that process has driven a lot of the volume and activity to other airports. That was a balance between inbound and outbound. We don't have these bilaterals to help us to control the business, but you're absolutely right. They are on our agenda. We have spoken to some of the longer-haul airlines as part of the mix of the 27 to try and encourage them. It is true that inbound traffic, especially from Asia, is not sensitive to distance between the airport. You probably know some of the major tour groups down in the South East of London. They think that they're in the centre of London and they're in Acton Town in hotels roundabout there or in Stretton and they think that they're in the centre of the business. You're absolutely right. It's a great observation and one of which we're actually working with with the carriers involved. The next question is Mike Rumbles. Thank you very much, convener. I want to talk about finance. According to the annual account, your annual account is submitted to companies' house. You've made an operating loss every year for the last nine years. You've made an operating loss of £24 million in the last four years that you've submitted accounts coinciding with the time the Scottish Government bought the company for a pound. That has hardly changed from the previous four years when you've made an operating loss of £25 million. You've now received a total, as I understand it, of £40 million of loans from the Scottish Government as the shareholder. My question was going to be when will the Scottish taxpayer get our money back, but it looks like to me that the Scottish taxpayer will never get their money back from this investment at your airport, wouldn't you agree? It's like after eight weeks you're answering that question. He's got the numbers, but I can talk in general. Your numbers are... My annual analysis is so far in the last three or four years the business is exactly the same since the business has acquired the Government, and that roughly creates the £38 million of investment in the business. Going forward, it's when are we going to get the position to be able to repay that cash, so we need to first return the business to profitable position, which I think has always been the strategic plan. As I said, coming to the business, we need to analyse it better to understand where the profitable parts of the business are and the loss-making parts of the business and make a decision as to what we do next within the business. That's what we're taking together for the board. I mean, I don't think you're going to be able to do this, but I mean, I could forlonely ask whether what year do you think the Scottish taxpayer might ever get their money back? I can't answer that question. Right, okay. I mean, I want to focus on the four years before the Scottish Government took over the company and you made an operating loss of £25 million. Since then, you've taken a £4.5 million loan in the first year, £6 million in the second, £10 million in the third, £9.6 million in the fourth and £9.4 million last year. You've now, in that same four-year period, still made the same operating loss and I haven't heard anything so far today. That gives me any confidence that this company is going to be in any position, at any time, to make a profit. My next question is, the loan that the Scottish Government has given your company is repayable on demand. What happens if the Scottish Government comes to the same conclusion as I have that this is an unprofitable company? It is throwing money after bad money and it asks for its loans to be repaired. What happens then? To repay that loan. To what happens? The company would be wound up. This is a technical question. The one question I have, which is confused me, when I look to the accounts, which I know Mike has done, is the actual bottom-line value of the assets at Presswick Airport, has remained constant for five years and they are considerably less than the loan. That includes any money that has been used as an improvement to the fixed assets, which is a completely strange way of accounting, one that I am not used to as a businessman to ever have seen. You have a company that is valued less than the money that is put into the fixed asset and nothing near the loan. Perhaps you would like to comment on that. It might help Mike to get the answer he needs. I recognise that question that was asked when you visited, so we supplied the paper to the committee. I think that the committee has got that in the papers. I was hopefully trying to put it in layman's terms in terms of the valuation of assets on a balance sheet because it can be quite a complex area. With two levels of assets, investment properties have been held for rental vies, et cetera, within the business, and that was valued by Deloitte's on acquisition at £2.8 million, and that gets valued each year by Deloitte's, again, Deloitte's specialist property section, and that's roughly the same value as a rental. It's for accounting purposes. It's not the true value of that land in a different position, so we're bound by regulations to do that on an accounting basis. You may have a different view depending on the future of the business as to what the value of those land assets are. They could be sold off and passed to the land in different uses, but as a business continue to run as a business, we have to abide by the accounting rules but value it on that basis. The second group of assets is the operational assets, which is really the terminal building, the runway, all the things that we use to run the business. Again, that was valued on acquisition at £1 million. Each year, as we spend on the runway and maintaining the infrastructure, we do expend that money, but we can only capitalise that and leave that as an asset if we can show future positive cash flows. So each year, as you rightly put out, we've been making a lot of the business has made losses, so you can't generally cash it out of the business. So accounting rules, again, says you cannot leave that on the balance sheet, so you have to put it expended to the P&L. Those are the numbers that the committee have quoted. You answered my question in a way that I didn't think you were going to, because I thought you would then say, well, if the Government wanted to withdraw its money back, the taxpayers' money back, that you would pursue commercial terms with other organisations to produce it, but you didn't say that. You said that the business would go belly up, basically. It strikes me that in no other operating company would this take place. This is not a profitable company. How long do you think the Scottish Government will be prepared to be putting in loans each year? As I say, they have put in loans to your company every year since they bought that £1 share. How long do you think this can continue? If I may, you can give a technical answer in terms of liquidity and balance sheet and the issue surrounding impairment. All I can say is the chair that we have had approaches from third parties about the business who have looked to the business in a different way and have in the past been willing to offer packages to us in terms of acquisition holder apart. Those discussions have not concluded in a way that we wanted them to be concluded, but one of the things that did come out was a lot of companies who are in our area and who operate in our area have shown interest around about the assets. In terms of pure valuation of land, I do not want to say too much, but we have land that is not core to the business and we know what the commercial value of that land is on the £1 million, the start £1 million, £1.4 million I think it is, in the accounts. Those numbers are significantly more. John Scott, sorry for calling you John, would know about some of the opportunities and what's actually going on. Mike, just fully answered. John wants to come in and then I'll come back to you and I want to bring in Peter as well. John, if you have a brief question. I was just to say why we are perhaps trying to help Mike Rumbles with an answer and the understanding that I have and was provided by the now First Minister and the Deputy First Minister, Nicola Sturgeon, when she undertook this venture some five years ago was that, as I understood it, that the underlying asset value of Prestwick Airport and the land around it is significantly more than the liabilities incurred thus far. As I understood it at that time, since it is an arms length bargain that the Scottish Government has with Prestwick Airport, that they will lend, to some extent, at any rate, not beyond the underlying asset value of Prestwick Airport, which is an 800-acre site. There is certainly, in the worst case scenario, it has a huge value for building located around Prestwick Airport and between Toon and Aire. That is the bottom line as far as the Scottish Government is concerned, as I understand it. In terms of Mike Rumbles' question, if the business went early up, the Government would still get its money back in terms of the underlying asset values, as I understand it, notwithstanding the accountancy procedures that constrain the way of reporting the assets, as I understand it. If I may ask a question now, or you may want me to answer to not. That is a short question. I would like to ask Andrew Miller and his colleagues that, given that Prestwick is perhaps the best-connected airport in Scotland for passengers and freight, there is motorway from Central Scotland to the front door, there is 25 minutes from Newton-Meyrns, there is a rail link into the station, the Faultons junction is less than a mile away and the ports of Aire and Trun are within a mile, would you, gentlemen, like to talk about the potential for growth in the airport, particularly around Spaceport, around the logistics hub for Heathrow, and around the development of MRO for companies such as Chevron and others, Spirit GE? Very rudely, I'm going to stop you at that particular question, because as somebody who's joined the committee, you don't get the committee papers, so specific questions are coming up. I fear you may get your answers, you may have to wait for them, but thank you for the comment. I'll come back to Mike and then I want to go to Peter. Thank you, convener. Now it becomes crystal clear to me now that the value of this company is not in its operations, but in the value of the land in which the airport sits, that's what's being said. That is just what's being said. Correct me if I'm wrong. That technical issue was raised about why does the balance sheet only show 3.8 million when you can potentially have a much larger value for the land that the airport operates under? We're trying to demonstrate that that was a significantly higher number if you went down to market and sold the land, but that's not our purpose, my county purpose is we have to look at it as a business going forward and put that aside. But does the underlying value of the business is dependent on what someone thinks of that operation? I think Andrew has already highlighted that there has been significant interest in the airport, in developing that with opportunities. No change. The four years before the Scottish Government bought the company, you made an operating loss of 25 million. And in the four years since the Scottish Government took over the company, you've made a similar loss. So you are making losses every year and you've made losses every year for the last nine years. And nothing I've heard today gives me any confidence that you are turning a corner or that you are about to increase your, well, you're not, profitability. So really, my question is, I'd like to know how much is the value of the land that John Scott has, the point that John Scott has just been making? How valuable is the land on which the airport sits? Again, that's a subjective question and it depends on the market conditions. If the airport wasn't running as an airport and it wasn't there, it depends on what use you have for that, whether it's for housing, commercial, as different valuations. So I can't give you, that's an expert question. I mean that this is not a profitable operating company that should be invested in, but there we are. Maybe as part of the valuation, I'm sure, as a result of this, you will be looking at the value of the assets held by the company as part of your due diligence. Part of a review process for this year in terms of options, in terms of what we do, the use of the airport is one of those considerations. Thank you. We look forward to hopefully seeing that at some stage. Peter, you have a question before we move on to the next question after that. Yeah, I mean, we've heard today that you've had very modest growth in passenger and freight. It is very modest. And we all know that you often need to invest to grow any business. Now, do you feel that you have access to sufficient capital to make the necessary investments so that you can grow this business? Bear in mind that it's not just about growing the business. As I also understand it, within the next five years the primary radar system will need to be replaced. Do you know how much that will cost? And have you had any ideas on how you will fund that if that has to happen within the next five years? So it's about growing the business, but it's also about the infrastructure, the major infrastructure cost of the radar as well. I think it's very, very clear to me that the business had suffered from lack of funding in terms of the infrastructure for many, many years, long before the Scottish Government got involved in the business. To be fair to the Scottish Government, there's been a willingness there to bring the facility up to as good a standard as we can expect that will not put off operators. Again, I made the earlier comment. As far as I'm concerned, there's an airline man. Nothing about the facility puts me off. In fact, our customers love us. I've met a lot of the customers of the airport. They all think it's a fantastic facility. So we don't have a problem with the facility as such. We routinely, every year as part of the loan, probably £3 million, of that goes on the actual infrastructure. With a 3,000-metre runway, we over a 10-year period resurface 300 metres each year. So it's a bit like the fourth road bridge. Over a 10-year period, you start again because that's the best way of keeping the airport open. That 300-metre stretch will be a seven-figure sum of money just to keep the runway in a serviceable condition. So there are, like any business, opportunities to spend more money and improve the infrastructure. But there's no problem at the moment. Everything we need to operate we have got in place. In terms of the primary radar, I don't know how much has been said at previous committee meetings, but there is a brand-new radar being installed as we speak, which will be operational by December. And that has been funded like many others of these projects in the UK by the wind farm developers. That's on going and we'll be up and running shortly. If you came to the site, you would actually see it there. It's there, but it doesn't actually operate at the moment through various testing and all the rest of it. But it's the very latest standard that can identify wind farm activity, for instance. And it'll be up and running by the end of the year. Jamie, you answer the next question. Thank you, convener. I think one of the things we haven't really spoken about today, and it's an important point, is that Presswick is also about people. Presswick employs a lot of direct and indirect people, and perhaps one of the... I wasn't in this Parliament at the time, but perhaps one of the original reasons for safeguarding the site was the fact that it was a huge part of the local economy, and I think it was right that members supported that at the time. Presswick has always had a very emotional reaction from the public. It's a very nostalgic piece of aviation history in Scotland, but we are where we are at the moment, and given that you're at 90 per cent occupancy on your property portfolio, you have a single retail passenger airline who's notorious at moving from airports to a whim, and given that you've had 17 meetings with cargo companies of the last 12 months, but no real growth on that side of the business either. My question really is, from a strategic point of view, are we getting to crunch time after five or six years of public funding? Is it your view as a panel that you're getting to the point where you're crunching the numbers and you will be making strong strategic recommendations on what the next steps are for the airport? We are re-crancing the numbers. Some of the major projects in terms of growth, in terms of Heathrow and the UK Space Agency's decision on spaceport have been delayed and I can sit here and comment on the reasons why they've been delayed, but we've got to be big people and understand that. They're still coming down by way of the longer term medium-term horizon. You are absolutely right that we've got significant changes. In a five-year plan, the business managed to achieve the financial problems in year one and year two, and year three were struggling a little bit because of the Brexit-related issues, because of the other activity that we've planned to be adding to the business by way of spaceport, by way of new carriers, and we have to revise the five-year plan on a changing set of assumptions that the business is currently doing just now and we will have a solution on the way forward before the end of this year. We had a strategic vision announced in 2014 that focused on passengers freight, revenues and operating costs. Then there was a strategic plan announced in April last year. We're now 14 months into that plan. Is it going well? Are you meeting the objectives in that plan that was announced last year? Or, as you're saying, are you announcing a new plan that's coming out at the end of this year? I'm a bit confused as to so many different directions, visions, plans, strategies. Going back to my original question, at what point do you take overarching responsibility for this and say, this is where the airport needs to go, this is the only direction we think it should go? Okay, let's not confuse you. Let's be very clear and very blunt in any business with a five-year plan. Usually the short-term years are more crystal clear in terms of the base, the current year. As you go forward some of the variables change. It's a mature board, a mature management team that recognises these changes and adjusts the assumptions and the numbers on a regular, on-going basis, which the business does. Not just in terms of the five-year plan but in terms of the current year. In the current year, we hadn't in some respects achieved some of the volume growth and revenue that we expected but the management team, Stuart especially, and Ian. The management team have accepted that but they've squeezed enough juice out the lemon in terms of efficiencies a recalibration of the mix in business. Fuel, for instance, has doubled this year compared to last year in terms of the mix of the business. That was a significant achievement for the management team to try and address the bottom line to achieve the bottom line that we had in the plan. Changes mix, change in margin to try and achieve that. The project is called Project Rebalance and Stuart and his management team have done a significant job. We're big people. We understand that forming exchange rates change, the price of fuel changes. People, for instance, we lost two of the largest carriers in Europe, Air Berlin and Alitalia in the last 12 months and the opportunities presented by these markets like in Germany, for instance, significantly opportunities for some of the carriers like Ryanair and EasyJet and because of Brexit which causes a lot of risk attributes in terms of the aviation industry we have to recalibrate in terms of the assumptions we have to recalibrate the numbers. It's part of day-to-day on-going business. What's your gut feeling though? You're a respected aviation expert on this panel and you're leading the charge here at Presswick. You must have a gut feeling as to where things are heading where the future direction of the airport is. I'd be really pleased to hear it if you have. Building management don't rely on gut. We rely on facts, we rely on strategy, we rely on macroeconomic variables which we try to manage in the most positive way that we can. There's one thing I would add to that. The reality is the whole aviation industry, if you look at the forecast going forward, the whole curve just increases so demand for air travel will be huge over the next few years. This country does not build new airports so at the moment we're fairly unique, we've got a 3,000 meter runway which gives us amazing capability it's not only long but it's wide so over a period of time the country will not build new airports airport capacities will be challenged and I think its future as an airport might not be rosy right now but in the future it's inevitable that we'll get a far busier airport. That's questions from Kate Forbes. Thank you very much. You have touched on this already but are you able to provide any more detail about those approaches or what those approaches might look like in the future? We have had approaches some of those approaches are governed by non-disclosure agreements that we have from various parties we have a criteria a check that we have and we have a criteria that we have we have a criteria a checklist against the interested parties and it's true probably that 90% of them are ruled out when you ask them things like experience of running an airport can you bring an incremental revenue to the top line and some of these parties for instance own airports they operate airports and airlines and so we have a narrow chevron as we've gone through time we have had approaches in the last sort of six months it's true to say some of them are tire kickers so experience of running airports their airlines having the access to capital to fund the business going forward understand the dynamics of the market in terms of how they might be able to fix the top line we've had discussions with people who own cargo airlines we've had discussions with passenger airlines but having the capital and the access to capital at the correct and proper cost is very important so we have criteria that we go through but it is true in the last sort of 12 to 18 months there's probably only been one or two parties that fit the criteria and it's our commercial criteria we don't want to sell the business to somebody who wants to close down the runway and build houses and third parties it's not been actively looking for a buyer the position is too quick the position is the business is not actively up for sale but if somebody comes along that shares the same strategic vision of the board we will talk to them if they have the capital funding we will talk to them if they have the expertise and there's been robust discussions with a number of parties over the last two or three years which has imparted parcel of our strategic objectives one of the three years we've turned the business to the private sector in all or part but do it in a long-term sustainable way no fire sales no jumping into joint ventures with companies that don't have any experience in this area so it's a very narrow shabrin we do know because of our experience we know who these parties are and we know where they live and we know what the growth profiles are and we talk to them regularly in dialogue about the future of our business and how they can help Mike, you want to ask a specific response you said the airport wasn't actively up for sale, just simply is it for sale? I work in the commercial world everything's up for sale right, I think we're going to leave that there I'm sorry Kate John, you may be about to get your answers but Colin's going to ask the question there is there is obviously a lot of nostalgia towards Presswick Airport it was a wonderful documentary last night about the 1978 World Cup and the team flying out from Presswick to Argentina and sadly Scotland teams flying out of the World Cup it's probably not a good profitable opportunity for you in the very near future but one area of growth will be the potential third runway at Heathrow Airport and the prospect of a hub coming to Presswick so you can ask specifically what discussions you've had with Heathrow and the Government to make that happen and what are the opportunities from that Definitely going to come to you if I could ask you to be as concise as possible in relation to this We are one of 10 Scottish competing bids that Heathrow people have been up and I mean by people including the CEO have been up the other members of the team have been for the third time and that third time was last week where we put our best foot forward with our local stakeholder group the ports, the rail our business and some of the interested parties who've added grease to the quicker turning of the wheels including our dear friends in South Ayrshire Council and they were up last week and the meeting was very positive exceptionally positive and they are working with us the minister, as you know Mr Keith Brown signed an MOU which clarified Scotland's role in that supply chain and they were working to that MOU so it's looking very positive at the moment Did that mean from a business point of view to Presswick? Presswick or in terms of the whole picture for the Scottish economy? The whole picture was specifically of Presswick if you were to secure that. One supply hub or there might be two or three we don't know that is up to Heathrow in terms of the whole picture for the Scottish economy it's 5,000 jobs over a period of about 10 years so it's quite significant that we don't know from the supply chain sorry Mr Chair, I'll try to be quick from the supply chain Heathrow don't want to tip their hand in terms of procurement prior to identifying where the hubs are because they want the best possible prices out of the Scottish manufacturing base and to tip their hand in terms of where the hubs are going to be who the suppliers are going to be we put them in a prime position to increase their margins so quite rightly they are not keen to disclose that just now and it's a significant amount of money but it's from the supplier base we're just consolidating and transshipping the semi-fabricated pieces down to Heathrow they need 15,000 people in Heathrow they can't give 15,000 people on the site so why there are 5,000 people out of these 15 that are going to come from come from Scotland maybe based in Scotland and part of the discussions have been on our offices the number of employees that they would actually put into Presswick and the facilities we have et cetera very very good Maya who is the procurement director on the project I spent two hours with last week and Stuart during the time that we're at in the facility John I think you wanted to come in on that Mr Miller that's a remarkable figure that 5,000 have you got a breakdown of how that would be made up please breakdown depends on where the supplier base are is in the Scottish production cycle that 5,000 depends on for instance people are building lifts are they coming from Scotland are they coming from other parts of the UK but in generality that's in the presentation from the Heathrow the Heathrow team and it's in the public domain forgive me I don't understand that you said 5,000 jobs in Scotland can you break down with it not not in front of me just now but that's the commitment that the Heathrow people have made to the Scottish Government and access to Heathrow slots as part and parcel of that development John, would it Andrew, if you had those figures that you could lay out on something to the committee I think if you don't have them down would be helpful I will I just have to check if I make them back yet on the issue of confidentiality because an awful lot of this seems to be around headlines and inducements I don't know if I'm allowed to use the word inducements but very clearly very clearly people can be seduced by a figure like the creation of 5,000 jobs so there should be clarity around that before that figure's been bandied about either by the Scottish Government or any of it's agency so any information that you could provide to give some clarity to that headline figure which is a very impressive headline figure I don't doubt and who doesn't want jobs created that would be very helpful Mr Miller Thank you Thank you John, let's share it briefly It was just to say I think given that Presswick is one of 10 options for those 5,000 jobs that really that's a question for the Scottish Government that we might properly address to them Richard, do you want to come in very briefly Richard, please I know a small bit about this but at the end of the day it's not Presswick it's a commitment that's been given to the Scottish Government by Heathrow that there will be a hub a hub a hub in Scotland so it's no for with the great respect Andrew Miller to give that information to us it's the Scottish Government to give that information I think if Andrew is happy to give it to us I'm happy to take it from the committee's point of view but if you're not in a position to give it to us I would understand that John, do you want to come back very briefly I'm sure Mr Miller forgive me if I've picked that up wrong but the reason I focus on the word 5,000 jobs because I thought that was what Mr Miller was saying that the potential of winning this hub was 5,000 jobs and so it was simply to ask for a breakdown Are you able to say who the other who your opposition is in Scotland Mr Miller? We're all team Scotland and nine other sites have been identified One in my area It should be helpful as well Thank you Mr Miller We're now going to come to the final of John's questions to come from the deputy convener Gail Ross Good morning panel We've touched on it a number of times in various questions I want to talk about the application to become a space port and you mentioned that the decision by the UK space agency had been delayed given a reason for that and do you know when that decision may be forthcoming? Andrew It's been delayed around 12 months part and parcel of the delay I believe is the complexity of the operators and the airports that are involved part and parcel of that delay trying to be as politically sensitive as possible part of the delay is to do with Brexit and the allocation of resources makers done in Westminster we're very well-diled in both to the House of Lords and the House of Commons in terms of the select committees in terms of the process and that has caused some delays but the technical issues surrounding the operators and the opportunity the opportunity is phenomenal but the technical issues for instance we applied with five operators space and the UK space agency had a technical panel who went through the five operators test of the P&L balance sheet technology far beyond my personal intellectual capacity and chose two operators to continue with Presswick so there's been sessions as it were in terms of phases and we're at the last phase with two nominated operators which I can't disclose today and we work with these operators to prepare and finalise the numbers so that's one issue the other issue is the regulatory environment around the licensing for spaceport in terms of the technical issues in terms of storage of fuel etc and we looked at the USFA rules for spaceports and Presswick about 90 per cent compliant storage but we don't have the rules from the Civil Aviation Authority as yet we're doing it with the DTI in terms of fixing the compliance environment around spaceport operations in the UK but we're only one of two horizontal launch applications still left in the running there was about six or seven but there's a vertical launch component to this as well which there's a lot of different points in Scotland who are part and parcel of that which a lot of members around this table will know about but I clearly don't in terms of how the markets bifurcating and the development when I started this project getting your satellite sent to space from Kazakhstan cost 30 million US dollars because of Elon Musk he's actually predicting so he says a launch cost of 7 million US dollars from his SpaceX project so there's been phenomenal change in the cost of launching so we're very expensive but now they're reducing the cost and I think the UK Space Agency to be fair to them it's a very complex area and they haven't hit their deadlines and we're supposedly told supposedly told by Jake who heads up the agency that we should know about the Farnborough air show but it's a political process and I just watch with interest a brief follow up with hopefully a brief answer as we know the air show is not too far in the distant future so we'll await that with interest can you tell us maybe some of the benefits that it would bring to both the airport and the area as a whole that's a very good question within our boundary friends obviously the commercialisation of the land the monetisation of the land and the value of the land is more and more manufacturers and people who support that industry want to take up space an opportunity for us 885 acres so there's manufacturers and industries and enterprises that are associated with that we'll get the loading and landing fees the fuel fees surrounding that and we're fully compliant in that sort of area the bigger issue in terms of the economic benefit for the UK including the Scottish economy is the manufacturing of these satellites where the people are, the supply chain where they are, we've worked with them we understand the demand requirements and they would be more than happy to come and sit in our airport enterprise rather than a three-week trip to Kazakhstan where they have to piggyback the loads on military loads etc etc and sometimes they wait three months for a launch so there's great supplier satellite manufacturing demand in our own backyard so there's great expectation of job creation I think the figure at 8GVA and this isn't my figure I can even give you the date it was 2017 and the company who did it it was 1.4 billion right no 1 at 8GVA not jobs I'm pushing you on jobs I'm nervous in jobs I've got my briefing pack oh here we are 4,617 jobs no on that note that is probably a appropriate point to end it I'd like to thank Andrew and Stuart for coming in again and thank Ian after 8 weeks for taking a baptism of fire at the committee I think it wasn't actually a baptism of fire thank you for the information we've got some bits that we're going to follow up post that and I'm sure we'll be keeping an eye on this as this session continues so thank you very much and I'm briefly suspending the meeting to allow the witnesses to depart I would ask committee members no more than five minutes please I suspend the meeting now going to reconvene the agenda sorry the committee we're going to move on to agenda item 5 consideration of subordinate legislation before I do say I'd like to ask if there are any members that would like to declare an interest and I will declare an interest that I have an interest in a farming partnership Peter I would like to declare an interest in a farming partnership also Stuart I have a small registered agricultural holding agenda item 5 is the consideration of one instrument that is not subject to any parliamentary procedure the instrument relates to TB control measures for bovine animals this is a no procedure instrument which the committee would not originally be ordinarily be required to consider however the committee was advised that both the NFUS and the Scottish beef association had concerns about certain policy intentions of the instrument NFUS also raised with the committee some concerns that their submission to the Scottish Government on the SSI appeared not to have been taken into account the Scottish Government only this morning wrote to the committee acknowledging the technical issues had led to two submissions that was the NFUS and indeed the BVA not being received and these therefore considering the information that we had before that means there were three submissions that were not being taken into account the Scottish Government has therefore in the circumstances decided to revoke the instrument consider the policy issues raised by the NFUS and the other submissions that had not been considered and to make a new order at a later date I just wondered if anyone in the committee has any comments to make Stuart? Disappointing that this has happened although I think the correct response is the one that the Government has taken to withdraw the order but I think it's important to open the question as to whether in failing to recognise that it had received these three submissions from quite important stakeholders in relation to this order a wider systemic problem that might affect other policy areas across Government and I think we should make sure that we communicate with the Government the need for them to assure us or appropriately to fix any systemic problems that may be so that we don't and other committees don't find themselves in a similar position in future. Peter? Yes, thanks, convener. I accept that the mistakes have been made and it's important that all people have a chance to comment on these documents and I agree that this is the right procedure to withdraw it at this point in time but I would like to state that I would hope that this comes forward in a very near future because this is about protecting our very precious TB-clear status in Scotland. This is about tightening up the rules and some of the compensation around that and I would love to see this come forward as soon as possible because I think it's very important that we do tighten up procedures and make sure that we protect our TB-free status. Thank you. Peter, Jamie? Thank you, convener. Just for the record from a process point of view I would strongly urge the Scottish Government to ensure that its consultation process is as robust as possible the feedback from NFUS and indeed the Scottish Beef Association was that they felt that their submissions had not been taken into account through that process and there may be other third parties or stakeholders whose views were not taken into account and it's just a friendly appeal to the directorate involved to ensure that consultation processes within such important matters are inclusive, transparent and as robust as possible. Mike? Reference to the letter that you received this morning and then we have a copy of during the 20th of June and it says accordingly this is from a civil servant according I can confirm that at the earliest opportunity we will bring forward a further instrument to revoke the tuberculosis Scotland order. The Scottish Government will seek to introduce a new order etc. Well that might be the case which really in my view form has it that this should have been a letter from the Government, from the minister from the cabinet secretary responsible I'm surprised that it wasn't sent to us the effect is the same but I think it's important that we write to the minister about this and not to the civil servants. John? Thank you. The two points that I'd hoped to make have been covered and that is one about the process to make sure that this is maybe just a blip for this instance to pick up and Mr Chapman's comment on the status which I think is important and should give a sense of urgency. I just wouldn't want it to be thought that there is any committee endorsement to the position of either of these any of these submissions because certainly when the Scottish beef associations position is that there should be no limit on compensation that's not something that I would be prepared to agree to. Thank you. Richard? I've taken on board the points that have been made but from me reading this letter I take it that the clerk of our committee, the Rural Economy and Connectivity Committee was in contact with the agricultural and rural economy directorate who is Sheila Bowes chief fit in the officer for Scotland and she's replied to it based on the fact of it. But again I take a cognisance that I'm sure the cabinet secretary will look at this situation and resolve it. Does anyone else have a comment? I think that what's coming out of this quite clearly is that the very fact that the committee has looked at this has identified that there are a few problems and the Government has responded entirely correctly by revoking the instrument and then are going to relay it. I take John's point entirely that it's not up to the committee to endorse any of the comments made in the submissions that have been left off but it should be for the committee to say that those submissions should be considered. I think that as a committee we have a right as Stuart has indicated to find out why those people have been admitted and technically they are probably three of the bigger stakeholders in relation to this and I think it's important that we make sure that that's not missed. I'm sure that people with individual comments relating to the instrument will get a chance now to feed into the Government their views. I also take on a point from Peter's point of view that Scotland has been TB-free since 2009 and the fact that John Finnie has made is that we don't want to allow TB in and it's important that whatever we do doesn't do that. Bearing all that in mind may I suggest that the committee writes to the cabinet secretary and notes our concern that first of all welcomes the action that the Government is taking notes our concerns regarding to how these consultations were missed off and writes also in that letter to the cabinet secretary asking him to explain to the committee why they were left off and ask him to reintroduce a revised SSI as soon as possible to protect Scotland's status. I actually think that this has proved just how valuable committees are and the work that's being done to make sure the legislation is being scrutinised. With the committee's approval that is what I propose to do and I assume that is what the committee is happy for me to do. Thank you. We are now going to move on to gender item 6 which is subordinate legislation which relates to negative instruments. One is the marketing of fruit, animal by-products and pet passport fees animal health fees and beef and pig carcass ski. I would ask the committee to note that no motions to null have been received in relation to these instruments. Is the committee agreed that it does not wish to make any recommendations in relation to these instruments? Yes. Sorry. I'd just like to put on the record a comment in relation to SSI 2018-177 animal health miscellaneous fees etc. Just looking at the fee structure I think there are a number of things which I find are quite welcome. There are quite a lot of fee reductions and there are some fee increases just to choose a very large portfolio and example of a good fee reduction approval of the first year of a scheme member's flock or hatchery or combined flock or hatchery on one site where the inspection is carried out by a veterinary officer that is coming down from 233 pounds to 27 pounds that is the kind of thing that reduces the barriers to entry and there are other similar reductions so I think it's a very complex order except and I'm cherry picking but I think it's quite interesting and I very much welcome the order and some of the things that I see in it. I have to say having read them all it's quite complex in the set for pet passport fees there isn't a set price for it but there is a reduction in the price of the documents that have been, sorry, a slight increase in the price of the documents being received but it doesn't reflect on how much that will affect on the passport so there's a lot of unknowns in there which I'm sure we've all picked up on but I don't think, I mean I think we can note those comments I don't think it's up to making a recommendation so can I having heard Stuart's comment ask again a recommendation in relation to any of these instruments? That's agreed. The committee will now move into private session. Thank you.