 Rwy'n ddod i'n fwy o'r 16 ystafell yn 2017 ar Y Llywodraeth Rwro i'r ddweud iawn. Wrth gwrs, rym ni'n fwy o'r ffordd i'r ffordd i'r mae'r ddweud iawn yn fwy o'r ffordd i'r ddweud iawn. Foddwch i'r ddweud i'r ddweud iawn i'r Ffulton Magrega i'r ddweud iawn i'r ddweud iawn i'r ddweud iawn i'r ddweud iawn i'r ddweud iawn i'r ddweud iawn. No doubt, like everyone else, this morning he's been walking into work as today is Walking Into Work Day. So agenda item one, we're going to receive an update from the Scottish Government on the high-level output specification strategy for rail infrastructure in Scotland. I'd like to welcome Hamza Yousif, the Minister for Transport and the Islands, Bill Reavie, from the director of rail at Transport Scotland and John Proven, the head of rail strategy on funding at the Scottish Government. I think that you are going to make an opening statement. Thank you, convener. I can confirm that I did walk into work this morning. Publication of an age loss is a regulatory requirement under UK railway law. It sets out at a high level, our day-to-day requirements for the Scottish rail network, from the period 2019 to 2024, and how we plan to address future capacity constraints. It is accompanied by a statement of funds available, which outlines the level of public funding available to support our requirements. Although the age loss is part of a regulatory process, it enables us to provide renewed focus on a high-performing, resilient rail network in Scotland and an opportunity to challenge the rail industry to deliver improved benefits for passengers and, indeed, for freight customers. Development work on the age loss is at an advanced stage. We have consulted extensively with both public and, indeed, the Scottish rail industry, receiving well over 100 responses to our future infrastructure strategy consultation. Based on that and our experience of the current and previous railway control periods, the age loss will have a particular focus on maintaining the current high levels of performance, which is among the best across the UK railway. Improving journey times and connectivity for passengers and freight users continue growth in the rail freight sector and, indeed, improving rail's green credentials. The age loss will also drive positive behaviours across the Scottish rail industry, while it primarily lays out our expectations of network rail. It will also ensure that network rail will pull together in alignment with the wider rail industry, with a clear focus on delivering our priorities for Scotland's railways. We have made considerable investment in Scotland's railways since 2007, with new lines and new stations such as the Borders Railway, Airdrie to Bathgate line, Lord It's Kirk stations and many others. This investment continues with major projects such as Egypt, the redevelopment of Queen Street station and others in a £3.5 billion capital investment programme to 2019. However, it is no secret that there has also been significant challenges with the cost and delivery timescales of some of our major rail projects. We have been working closely with the rail industry in Scotland and, indeed, the regulator to help them to manage them more effectively. We have also challenged the industry in areas where there has been a clear need for improvement. The result of this work is there for all to see. We have not cancelled or deferred any of our committed scheme, any delays to projects are measured in months rather than years, and we remain with the financial headroom set by the HM Treasury. That is a considerably different picture compared to other parts of the UK railway, not where we want it to be but considerably better. However, we cannot have a repeat of project overruns in the next control period, particularly at a time when public finances are under unprecedented pressures. That is why the HLoss will signal a move towards a pipeline-based approach to the delivery of major capital schemes. That was supported by 63 per cent of respondents to our consultation. That will bring significant improvement in project specification, development and governance, but, importantly, greater oversight and discipline around the cost and delivery timescales of such projects. Just to conclude, convener, the timescales for the publication of the HLoss have been affected by the UK general election, as we will require certainty from Her Majesty's Treasury on the future funding arrangements for railways. However, we are working towards meeting the statutory deadline set by the ORR for publication no later than 20 July. The details of the pipeline approach will be set in our future rail enhancement capital investment strategy, which will be published by the end of 2017. Of course, I am always happy to take questions. The first question that the minister is going to come from Stuart. Thank you very much. Before starting, I make two declarations. I am the honorary president of the Scottish Association of Public Transport and honorary vice-president of Rail Future UK, both of which are relevant to the subjects before us today. That is a very good point, and thank you for reminding me. There may be other members who would like to make a declaration at the start before we go any further. The deputy convener. Yes, thanks. I am honorary vice-president of Friends of the Four North Island. I am co-convener of the cross-party group in Rail. I am also honorary vice-president of the Friends of North Island line. I think that that concludes all the declarations. Sorry, Stuart. Please continue. No, I am sure that the minister is now well aware of our keen interest in committee and elsewhere in the subjects that were before us today. Let me—I have three questions on slightly different subjects. The first of which is basically how does the HLOS tie in with wider policies and practice for transport in Scotland, because we always don't stand alone from other modes of transport? Okay, integration between modes of transport is hugely important. HLOS, as the name suggests, the high-level output specification, specifies what a high-level expectation is in terms of performance. That includes, of course, journey time improvements, as well as improving the passenger experience. Now, a key part of improving that passenger experience, of course, is the integration of transport. You are absolutely right that people taking their journey will often go from, you know, thinking about the service that runs from Addrossan to Brodic, for example, will often take the railway down to Addrossan to then go across to Arran. So the integration is an important part, but it is set at a very high level. This is where some of the conversation is going around performance. PPM is a good measure. It is one that we could look to supplement and complement. When it comes to other forms of transport, we will look at how to improve the passenger experience, and part of that may well be how we better integrate modes of transport. Can I just pick up on that, minister? You chose to refer to integration between ferries and railways, but, of course, the majority of the ferries are controlled by the Government, so I suppose, therefore, you have both sides of the integration at your hand largely. In the case of buses and, indeed, cars walking and cycling, it is more fundamentally difficult. Do you have anything useful to say about how HLOS might support wider strategy in relation to those modes of transport? Yes. HLOS could do, but it is important to mention the fact that, under the franchise agreement, ScotRail is required to work with Transport Scotland and other stakeholders, such as RTPs, local authorities, ferries, subway, trams, airport operators, taxi associations for the purpose of improving transport integration in Scotland. That includes delivering of course integrated ticketing, which is a huge piece of work that has been taking forward with local authorities, with bus companies on stop locations. For example, funding of £200,000 has been made available to ScotRail to work with a wider transport integration group. Examples of projects being delivered, for example, would be wayfinding and multimodal screens at Oben, Elgin, Inverness, Thurso. There is a lot that is going on in terms of integration with other modes of transport. HLOS will set the kind of high-level specifications, but the franchise agreement actually compares the train operating company to already do that. My colleague Rhoda will come back to that in more detail. Let me just move on to the responses to the consultation. In particular, in your preliminary remarks, you highlighted that there was broad agreement to the consultation on the pipeline approach. How are you going to respond to other areas that arose in my consultation? We were pleased with the level of response and the fact that we went out to various communities. Members of the Scottish Parliament felt that we weren't going to their particular communities and got in touch with me and said that we want you to come to our constituency, so we did our best to do that as much as we possibly could. The first thing to say is that we are pleased at the level of engagement. On the 114 consultation responses received, as you said, there is a large agreement on the pipeline approach. 72 per cent of respondents also agreed our vision for rail as well, which is pleased about it. I think that where there is work to do and where we are examining further what we can put into the age losses around climate change and clear strong support for rail being parts of the emission reduction targets. It is also clear from the industry that they felt that governance and transparency were an issue. I think that there is some work for us to explore about how we do that and how our frustrations around governance and transparency around major projects have been well rehearsed at this committee and that I have made mention of in public as well. That is why we would want to move towards that pipeline approach. The last thing that I would say is that there was clear support also to ensure that rail freight was part of the conversation, but not just part of the conversation that there was ambitious targets for rail freight. Again, that is something that we will be considering in the age loss. For my part, Minister, I am easily pleased to progress on the buck and link to Ellen first, and then on to Peterhead and Fraserbaugh, which will keep me well chuffed for the next while. However, there will be other competition. Speaking of competition, in particular, the Government has made substantial commitments to invest in dualling trunk roads. In your opening remarks again, you made reference to the increasingly restrictive access to capital. How do you think that the focus that there is on the trunk road investments is going to play out against the much-needed investments in rail? As a minister, you have to find that balance. People understand that. If we look at some of the numbers and the figures, we look at the 1718 budget. Transport Scotland budget for 1718, £748 million spent on rail, £823.3 million spent on motorways and trunk roads. That compares to 4 per cent of commuter journeys done by rail, where 66 per cent of commuter journeys are done by car or van. We are spending considerably on rail to encourage a modal shift from the road to rail. That does not mean that we stop investing in our trunk roads. The committee and other committees have noted the Audit Scotland report on the condition of our trunk roads. Although they are a better state than local roads, the Audit Scotland report rightly says that they need some attention. We cannot take our eye off on maintaining our current assets, plus adding to them where necessary. The dualling of the A9 and the A96 is going to be a huge benefit to have our trunk roads—all of our cities—connected by trunk road as something that is going to be good for our economic growth but will tackle many other issues along the way. It is about finding a balance. During the consultation, several respondents raised concerns that capacity improvements appear to be focused on the existing network, rather than reopening some of the old lines. For example, to St Andrews north of Aberdeen to Helen and Peterhead, for example. I would welcome your comments on that. Are there any plans to reopen some of those lines that were closed several decades ago? I was reflecting yesterday—the Government was appointed a year since I have been in the role—and I have managed to meet a number of very dedicated, passionate campaigners about the railway in the local community. It is unfair, because they sometimes get a bit of a bad press, but they are real, real enthusiasts. Their energy—some of them—has dedicated their whole lives to see certain lines open, as the member mentioned. For me, there has again got to be a balance. We absolutely have to strengthen the existing assets where they exist. I think that renewing existing assets is important, but, at the same time, we should absolutely not be closed off to investing in new lines at all. We have a good track record in that Airdrie to Bathgate line in 2010—for example, the border line in 2015—a total of 14 new stations that have been open since 2007. We have shown that there is a commitment or a track record to opening new lines. I know many campaign groups will be very interested in their rail projects. What you will not see in each loss—if I can make that very clear, what you will not see, because each loss, again, by its very nature, by its name and its high-level output specification, is not going to have detail in each loss. I am keen to detail every single project that we fund in the control period, because what I am keen to avoid is a prescriptive list that has very early, unrealistic cost estimates—only then for Network Rail to come back three years later to say that the cost of this is doubled or tripled or quadrupled, because it was a very early cost estimate. What I am keen to do is have a pipeline, so there are a number of projects, some of which you have already mentioned, are in that, but saying to those projects, once you have a robust business case that has been developed to a stage that we are satisfied with, whether that is grip 3 or 4 or some other part of the process, that is when we start to release the funds, because we have a better idea of the cost. The projects that the member mentioned are all ones that have come to my desk before and are ones that we would not discount from that flexible pipeline-based approach, but I hope that that gives them some kind of reassurance. A wee bit, but it is obviously quite a bit down the line, if you pardon the pun. How do you intend to balance value for money between the taxpayer and the fair payer, and do you intend the fair payer to fund a greater proportion of rail operating costs in the future in Scotland? No, that would be the short answer to that. When it comes to fairs in Scotland, we have taken action on fairs and I am very proud of that. The majority of fairs, for example, do not rise above RPI, and it comes to off-peak regulated fairs that can only rise 1 per cent below RPI, so fair rises, although nobody welcomes them. Of course, if you are travelling the railways, you do not want your fair to increase. That is a general common sense that you hear from people, but if they are going to rise, they are capped here in Scotland. In addition to fairs initiatives, the free week that many passengers have claimed this month, we would not expect that burden to be on fair paying customers. Just a follow-up on how projects get in. Obviously, there are things that are missing in Glasgow Crossrail, and there are things in my constituency where the Kyle line is maybe looking to share road and rail. How do those projects, and I suppose how do local campaigners know that those are actually part of being in consideration? If it is that flexible, how do people have an idea of what is going to happen and where it is going to feed in and when it is going to become a priority? That is a really good question. I hope that the flexible pipeline approach shows that we are not going to discount any projects. If you had a prescriptive list X, Y, Z, then there is absolute certainty that other projects cannot get in. You are very, very prescriptive, rigid and narrow, whereas a flexible pipeline essentially says that there are a number of projects that we can consider that we should not discount any of them. However, where we come to funding them when it comes to making the final decision, they have to go through a process. On the lines that you have mentioned, my advice would be to follow the advice of many other campaign groups would be to get the stakeholders together. That is usually the regional transport partnership, the local authority or authorities that may be involved in this. Work with Transport Scotland in relation to the STAG process to get that transport appraisal done through the guidelines that we have. Get that business case worked up, and where Transport Scotland can help to guide through that process. There is only so much that we can do, of course, but if we can help and Transport Scotland can help to guide campaign groups through that process, I would be more than happy to do that in Transport Scotland, I would be happy to do that. My only point with the pipeline is that we want to have certainty over the robustness of the business case plus certainty of the cost, or as much certainty as we can get the cost, so that we know how much we are going to commit. I guess that if people are looking for solutions to issues, and the kyle line is one of them, where the stone ferry bypass has been a problem pretty much all my life, if people are then looking at that as a possible solution to the problem of sharing road and rail, they work up a proposal and then it falls way down in the list of priorities. It is very difficult to put a timeline on that when a road becomes safe again. I do not know if there is a way of prioritising urgent cases where something needs to happen quickly. The member is right to highlight that there is a limited part of funding. I will come to the statement of funds and how much funding is available later on. Clearly, we have a limited part of funding. There is a debt that we cannot go over, or the debt ceiling that we cannot go over. Therefore, there will have to be a level of prioritisation, but the stag process can help to make that case. It will look into things, not just the robustness of the business case, but, as a particular error, remote is it isolated? Will it help with the social economic conditions in that particular geography? I do not know the intricacies of the line that the member is talking about, but if Transport Scotland can provide further guidance on that and how to make that case in line with stag regulations, we would be happy to provide that advice. I move on to my substantive question, which is about integration of transport forms following on from Stuart Stevenson's question. Examples of where Government is involved, for instance, kind of the Malig line. The ferry comes in 20 minutes after the train leaves Malig, which should be somewhere within the gift of Transport Scotland to do something about two places where it is dependent on privately operated bus companies to wait for ferries, and the same with buses and trains, because in my constituency and my region it is buses and trains and sometimes local buses. How can we make transport more integrated? How can we allow especially people who are tourists to the area to know how they travel about? How do we stop when bus systems are subsidised and some of those contracts are lost and some add-on services are then lost? It seems that the whole system is relatively chaotic at the moment. I have had a lot of correspondence with those who are involved in the Malig armadale route and select transport forum and many others who have been involved in that service. I share a lot of the frustration, so we are looking for solutions where we can better integrate transport. What I would say is that when I asked the question, I was taken into the control room that ScotRail has in Glasgow. I was shown how just altering one train by a few minutes what the impact on the entire rest of the network it can have on journey times, even in parts that are not connected to that particular service. Although the solution might seem fairly simple and I respect the absolute reason why the member is asking that question on that particular route, it can have a big impact on the rest of the network that is undesirable. However, I agree with her overall thrust of her question that integration of transport is a vital part of the work that I do and that we do in Transport Scotland. Smart ticketing is an important part of that agenda. The ability to be able to use one ticket in multi-modes of transport will help with that integration and will force some of those commercial operators to talk to the likes of ScotRail and CalMac. That conversation is taking place. However, if there are specific areas, geographies and constituencies where integration between the various modes of transport could be done better, I would urge members to contact me. I will certainly sit down and speak to the relevant transport providers and we will try to work up a solution as best we can, but sometimes the solution that might seem obvious can have a detrimental impact on the rest of the network. If that is the case, I would be very upfront with members and say that that is the reason why it cannot be done. However, it is a huge frustration that I know for commuters and passengers and I would be happy to see what we can do to mitigate some of the negative effects of that. I can understand that rail times are difficult because you are dealing with a railway and there are knock-on effects. However, things such as ferry timetables are very much in the gift of Government transport Scotland and ferry companies. Surely that could be changed relatively easily by a matter of minutes to allow connections to happen because it is really frustrating for people to then have a very long journey that could be much more dovetailed. It is fair to say that when we make ferry timetables changes to summer and winter ferry timetables, we consult extensively with local communities. We engage with them, the ferry user groups on those islands in particular, but also including groups that are on the mainland, so there is a lot of consultation that goes into that. It would be unfair to think that CalMac also does not have some sort of restrictions, for example, when it comes to crew numbers, the hours that they work, rest hours and so on and so forth. However, where adjustments can be made again, my offer is a genuine one. If the member thinks that tweaking a timetable by a couple of minutes could make a huge difference to those that she represents, I would be happy to look into that, to have a conversation with CalMac and see what can and cannot be done. However, there may well be very good reasons why certain things cannot be done. CalMac is not in the business of trying to be unhelpful. They are very, very helpful in terms of a company. They look to engage. They have a community engagement officer and director, Brian Fulton, who will meet communities to have a conversation with them. If there is something that we can do, I will be open-minded to looking at it. Minister, I am sure that you will get lots of letters as a result of that, not only from members, but from members of the public to try to make sure that services are interconnected. Before you do, I think that John Scott has a question, and then we are going to move on to Richard. Thank you, convener. Morning, minister. It is just a supplementary on that. That on the surface is a generous offer, minister, that put people to get in touch, but surely it is self-evident. There is a lot of planning that goes into these timetables. It does not need concerned citizens from the Western Isles to explain that there is not co-ordination in some of these instances. Is that something that officials... I mean, it may be that there are limitations and nothing can be done, but it should not have to be explained, I would have thought. There has been a rigorous assessment prior to the compilation of timetables. When it goes back to my previous answer, it goes back to my previous answer that there is extensive conversation with the communities before both the summer and the winter timetable are published. Can you keep everybody happy with the limited amount of vessels that CalMac have? Of course not. Some of those cases are well-known, well-documented in the public domain, but the popularity of our islands and the accessibility and affordability to many of our islands as a result of RET, for example, but also because of the great marketing that islands have done themselves is a good thing, but let's not pretend that that doesn't have challenges. The popularity with a limited number of vessels that are aging, and we have two vessels that are being built at the moment of Ferguson's. We know that, but they won't come into service until 2018, so we have a limited amount of vessels. Some of them are, of course, nearing the end of their shelf life. We do have constraints, so we have to manage the network CalMac, particularly in the summer. In the winter, it's a little bit easier, of course it is, but in the summer time, we have to manage that network and cascade vessels. Of course, the member will be fully aware that some vessels only fit in certain ports because of tidal restrictions or not, so there's another conversation to be had about how we standardise some of that. So there are constraints that would be unhelpful to suggest that there aren't constraints, and what I would say to the member is that extensive consultation is done. In terms of this summer timetable, the vast majority of those that we consulted with were pleased with the summer timetable. There were some that were absolutely not, and again, they're probably well known to the committee, but we're still continuing to work with them to tweak what we can. So no, you're right, it doesn't take concern because, as we do at CalMac, there's a lot of extensive discussion with community groups, but keeping everybody happy, with everybody's ambitions and desires, sometimes can be constrained by the capacity constraints, the vessel constraints, that we have. Minister, I'd like to bring in Richard now with some questions on that. Good evening, good morning, minister. Can we turn to the reclassification of network rail? What impact do you see might the reclassification of network rail as a public body have on the availability of funds for future expansion and enhancement of the Scottish rail network? The reclassification of network rail is a decision taken by the UK Government and the HMR Treasury and DFT at the time of September 2014, when the decision was taken. There's a couple of obvious points, but they're worth reiterating and re-emphasising here. Obviously, that resulted in network rails financing and debt being transferred on to the public books, as opposed to lending coming from the market, so lending is having to come from the Treasury. So there's obviously a number of criteria that have to be met now that that debt is on the public books. The mechanics and the funding arrangements, therefore, I mean, is from a Scottish perspective we receive, and I'll look to my officials to keep me right here, but we essentially get 11.17 per cent of the debt financing, which is an arrangement that we currently have. We're within that headroom at the moment for control period five. The general election means that we can't have conversations with the Treasury at the moment and the DFT about what their plans are for the next control period, but it's fair to say that we would look for a fair and equitable settlement for Scotland, just as we have. We'll continue to meet our statutory obligations to fund us a high-performing railway while continuing to invest and, as I said, discussions with the Treasury continue, I don't think. From the conversations that I've had with the DFT, I don't think I'm speaking of turn, but they also have their frustrations with Network Rail, despite it being reclassified. There's a number of projects that have been cancelled, that have been deferred south-south of the border, and this is not just about reclassifying Network Rail as a public body under Department for Transport. It's about how do we improve Network Rail's governance, transparency and accountability? The Scottish Involvement, Management and Funding and Network Rail operations are currently governed by the memorandum of understanding. Between the UK and the Scottish Government, along with inkfence, borrowing arrangements that expired in 2019, how well has that worked? Has it been good in practice and what arrangements are being made for borrowing in the post-2019 period? Not to go over my last answer, but, in fairness to the Department for Transport, the relationship between the DFT and Transport Scotland is very good and it works very well. It doesn't mean that there aren't tensions, there aren't difficulties, but generally that relationship works pretty well. My own relationship with my UK counterparts is fairly positive, fairly constructive. Again, we don't always agree and we'll always push further. They'll often push back, but generally speaking, the accessibility, the conversation and the engagement are constructive around the issue of Network Rail. They work well with the arrangements through the MOU. I reiterate my previous answer that there's a general election at the moment. There's no progress that can be made on the statement of funds available. Now, hopefully, that's not going to impact on our publication of age loss, but clearly not knowing what the funding mechanism is going to be, so I know that the DFT is exploring various options. Is it debt financing? Is it grant aid? Is it whatever? Is it exploring a variety of options that will be for the DFT and, of course, ultimately the Treasury to make a decision on that? All we will continue to ask for is a fair and equitable settlement for Scotland. Thank you, convener. You've asked for full devolution of rail to Scotland. How might that work in practice and would the UK's Office of Road and Rail remain the economic and safety regulator and, indeed, would the RAIB remain the investigation on accidents? Is that the way in which you would see things? Even if we can't get political consensus around the full devolution of network rail, then I'm hoping that members from across the political spectrum would see that there is value in exploring whether or not the infrastructure projects element of network rail, plus probably the timetable element of it, should be fully devolved to Scotland. That's not just our view. Members will be fully aware of the report from Reform Scotland, which strongly backed network rail devolution co-authored by the UK Government, Tom Harris. There was a strong view there that, because network rail is funded by the Scottish taxpayer to develop projects, to take forward projects on our Scottish railways, they should be accountable not just to this Government but, essentially, to this Parliament. I don't know how many times, if at all the head of network rail has appeared in front of this committee, I have no idea, but I suspect probably not very many times. I don't know how accountable network rail is, if a body necessarily is. I feel that that devolution certainly should happen, even if members don't agree that it should be fully devolved, at least of the infrastructure projects and preferably the timetable elements that are currently done at Milton Keynes. On the wider questions around the ORR, again, we have a very constructive relationship with the ORR and the regulator. The regulator has, as they often say, two main functions. One is the safety regulation of the rail, the safety critical role of the ORR. In my perspective, taking a GB-wide approach is not something that I am opposed to. Again, we would see how far we would get in conversation with the ORR about that. We have a number of cross-border routes, so it might well make more sense for the ORR to remain the GB-wide regulator of the safety critical role on the economic side. Economic regulation should be, in my opinion, anabler for an efficient, high-performing rail industry, which is focused on the maximum benefits for passengers and freight users. It might be sensible to evaluate whether the system of economic regulation is fit for purpose. I have already mentioned the fact that there are some real issues around project delivery or whether that is devolved closer to Scotland. In terms of rail investigations, I would be open minded to having a conversation with the appropriate bodies about whether that is a function best served UK-wide or devolved to Scotland. I am not politically sensitive about those issues. For me, it is about getting the maximum accountability and transparency for the Scottish taxpayer. The Northern Irish model, where Belfast and Dublin have been able to co-operate, for example, redevelopment of the line between the two cities, is very effective. Is that a model worth looking at where the responsibility lies for the Northern Ireland network in Belfast? John Swinney is the next question. You have mentioned the pipeline approach a number of times already. Have we looked at that in more detail? How is that different from what we have had before? Can you give practical examples of different decisions that might be made because we are using the pipeline project rather than what went before? The current system, where there is a prescriptive list of projects, we last network rail to give us an early cost estimate of those projects, will be signed off and, lo and behold, a few years later, the network rail will come back. Those projects will often be overrun and overpriced, but they will come back asking for more money for those projects. That, to me, does not seem like an efficient way of doing real investment projects. Generally, there is a consensus around the political spectrum that things can be done in a much better way. That is not to excuse network rail. I am extremely disappointed in any of the overruns that happened. I will not go back into what has been well rehearsed, but I think that a lot of the issues around regulatory compliance in particular could have been foreseen. That being said, the pipeline approach essentially—a recent experience on project delivery plus the feedback to the consultation—showed that there was a good level of support for that. The pipeline would, hopefully, give far greater certainty over costs, timescales that will ultimately benefit the passenger-free user, but also, importantly, the taxpayer. The pipeline approach will bring greater focus to the industry, working together to examine all the options for improving capacity, such as exploiting timetable, rolling stock options to get more. When it comes to real investments, there are a number of projects that are under development at the moment. If you think about resting in East Linton stations, working at Aberdeen to the central belt improvements that would have an addition to the city deal money that was given, working in the far north line, which has been done by the Far North Line review group, as well, projects that come with enhancements that they wish to make, or, indeed, robust business cases on the stations that they wish to open. All we are saying is that, instead of at this stage closing off what can and cannot be funded, we should work with them. They should develop the robust cost estimates, the robust business case, and if they come back with a level of detail that gives us confidence, they should progress to ultimately being funded, if that is the right thing for us to do. No project at all should be disadvantaged by the changes in fact of anything. It may result in projects being agreed midway through a funding cycle or a control period, but no requirement is now being placed on. If you are not in the HLOS, you are not in XYZ document, then you will not be funded. It is more flexible and more open, but it is very much based on the need for robust cost estimates. If we take something like the Edinburgh Glasgow improvement project, which has had a problem with price uncertainty, under the pipeline scheme, would you then delay the start of a project like that until there was more certainty? I do not like comparing projects that are already under way, though I understand the reason why the member asked the question. Essentially, the projects that are currently taking place, if we were given if we had agreed to fund them when more detailed work had been done around the potential costs, particularly around projects that rely on electrification, such as the EU, the SDA and many other projects, we would not have been as surprised at some of the cost increase and some of the delay. That is not to excuse Network Rail at all, because, as I said, there are some things, for example, the regulatory rail safety compliance that was used, the issues around that that caused delay and cost over, in my opinion, could have been overseen. It is not to suggest that the pipeline approach is going to mean that Network Rail is never going to delay another project. I think that there are some, as I have already said, some questions and conversations that we have to have with the DFT and that we continue to have with Network Rail around its ability to develop railway projects and to see them through to conclusion. I am still struggling, frankly, and I accept that you do not want to revisit old projects, but unless we get examples of how the pipeline project scheme would be different from what we have done in the past, I am struggling to understand what decisions might be made differently. If we take another example such as Borders Rail, that has been very successful and I am very supportive of it, but some people might feel that Borders Rail went ahead because local politicians and groups shouted very loudly, rather than because it was the best project in Scotland at that time. Would the pipeline project again make any difference to that kind of thing and maybe somewhere else that was not shouting so loudly like Leave and Mouth or Glasgow Crossrail? Would they get a better chance under the new system than they did under the old system? I would say that you do a disservice to the campaigners at Leave and Mouth who shout very loudly about their campaign quite understandably, quite rightly, and they have come to meet me on a number of occasions. I have had members of the Scottish Parliament who represent their case, and I should say on Leave and Mouth that conversations continue between Transport Scotland and the council on that one. Again, through our flexible pipeline approach, that is the type of project that working through that pipeline can develop cost estimates that are robust, a business case that is robust and, if so, should be able to progress to the next stage. There are some specific examples of where we have done delivery of slightly different Winchborough Queen Street tunnel closures that have represented two of the most significant planned disruptions since the current Scottish Alliance became operational. Both major works were delivered on time and on budget, with the experience gained on both from those closures. They show that a unified approach by the industry is much better than perhaps the model that has been used in other projects. Paisley Canal electrification project is again deliverable under the original ScotRail lines, involving first deliver three years ahead of the original plans in less than half the anticipated cost. There are projects that we can learn from that have been delivered well. When it comes to the pipeline approach, it allows a controlled release of funds, and that is where we want to be. It is not about projects shouting the loudest or not, as the member categorised. It is about the robustness of a business case, which is not just about pure economics and numbers. It is also about regeneration, the social impacts that it can have, as well as the economic case. They have to be robust before we release funds. We have not released the age loss, so it is fair to say that we are still exploring how we do that internally. However, once the age loss is published, we will be able to give greater detail on that. Once the rail enhancement and capital investment document is released at the end of the year, that will give further detail on the pipeline approach. The next question is Mike's question. Before I go to that, you have been giving very full answers if I could encourage you to be as detailed, but as brief as possible. On record, my thanks to the minister for facilitating a meeting that I had on Monday at the railway station with Nestron's officials to progress the issue of disabled access. That is my question. I know that the minister is keen to make sure that this facility is progressed, and I appreciate that. However, my question therefore is concerning the consultation, proposal or consideration emerging several of the separate rail investment funds, such as the Scottish stations fund, into a general capital budget. Those funds were developed to address particular issues such as disabled access at stations. Can you give us an assurance that, if those separate funds are abolished, it would not lead to the issues being somehow lost or subsumed into the generality? I feel that, as the member started with my praising, I should just retire, to be honest, and call it a day. I should end on a high. I just know that I have to be confrontational. I also reciprocate by saying that I know that the member has long championed accessibility issues particularly at the station, so I am pleased that the meeting yesterday went well and I hope that it comes to a fruitful conclusion. In terms of the substance of his question, I am very aware of some nervousness around amalgamating all the funds into the kind of general pots of the Scottish stations fund, accessibility and other funds that we have, freight funds. I do not want to prejudge the publication of the HLOS, but because of those concerns, I would say that I am personally minded and sympathetic to ring fencing, because I can see the importance, the confidence and the reassurance that that might give people. However, there are also dangers with ring fencing. Ring fencing, of course, can be too rigid, so we need to see how we increase the flexibility around some of those funds, but on balance, again, without prejudging, because we have to have the conversations that are going on internally. On balance, I am somewhat minded to ward ring fencing, but I would be keen to hear members' opinions on that as well, because there are good arguments on both sides of this debate. A few occasions in response to earlier questions that you used in the phase of a noted to correctly, or variants of it, robustness over the business case, emissions from rail account for 1 per cent of all transport emissions. Can you outline how rail will contribute to a reduction in greenhouse gas emissions over the five years from 2019, please? Yes. I think that it is going to be an important part of our HLOS document, specifying new emissions reduction targets, which I will, of course, link to our own climate change targets in the Government. There will be a requirement for a continuous and sustained carbon reduction per train kilometre, which is a line with appropriate ScotRail franchise agreement targets. How do we monitor those as well? We know that the shift from road to rail in the passengers is hugely important, but we are putting a lot of work, investment and conversations into freight as well. We are moving freight from road to rail. There are some exciting projects that are very close to being materialised. If we can pull them off, I think that there will almost be a kind of domino effect. We are looking at a variety of sectors. The two most exciting sectors, I have to say, are the freight side from me and the whisky front and the timber front as well. Those could hopefully help to reduce our carbon emissions as well. There will be new emissions targets in the HLOS. I cannot say what they are yet, because we have not published a document, but they will be there. Can we turn to deciding what rail we should deliver? To me, a rail we should deliver a good passenger experience, a seat to sit on, arriving time for stopping at a station that I, as a passenger, want to get off at. The current consultation proposes the introduction of new ways of measuring rail performance, rather than replacing or supplementing the current public performance measure. What might those new measures be, and how would they be used in monitoring rail performance to give me a good passenger experience? It is a really good question. Passengers will often say to me that their PPM stats might be very high, but there is big frustration about skip-stopping that you are talking about. That is completely understandable why they would be frustrated. Previous director of ScotRail Alliance, Phil Wester, took credit to him for putting a lot of effort into trying to reduce skip-stopping, particularly during peak times. Even if you reduce it to 1 per cent of trains, if you are on that 1 per cent of train that is affected, you will be understandably miffed. What I would say is a couple of things. I still think that PPM is the right overall industry measure. That five-minute destination is important. Some people suggest moving to on-time arrival, but that gives serious impacts to those with mobility issues. There has to be some flexibility around timing so that those with mobility issues can get safely on and off a train. PPM, generally speaking, is probably the right measure, but there is clearly a desire from the public for that to be supplemented or complemented. We can look at PPM not just at the end destination but perhaps as a member suggests at intermediate stations as well. The performance is measured. Improving journey times is important as well. The way to attract more people on to the rail and help with the modal shift would be to improve journey times. If there are other measures—there are KPIs, of course—that are part of the ScotRail franchise, but if there are other measures, we are looking actively at them. I think that the main point that the member makes is absolutely the one that hits the nail in the head that that has to be about the passenger experience rather than just numbers on a board. Anytime I have travelled on railways, I have enjoyed it and I hope to do that during the summer. Consultation indicates that the Scottish Government will review incentives for network rail to improve journey times, capacity and connectivity. Can you outline what the current incentives are, whether they are working and how they might be improved? It is the role of the ORR to determine the incentive framework for network rail, as informed by the HLOS of the Scottish Government and the UK Government. It is the ORR's extensive consultation process. There are a number of incentives, outputs and metrics in place for control period 5, but one area that I think is alluding to the member's question is that one area that needs more focus in the next control period is one that I have alluded to already, which is journey time improvements, in particular those that can be secured by network rail working with the industry through pretty routine practices such as timetabling better, timetable development and network renewal. I do not want to prejudge the document before it comes out, but we are likely to include a requirement for a regulated journey time output in the HLOS. Journey time improvements will attract more people to the railway. It is common sense. Thank you very much. I want to ask a few questions about ERMTS, the new management system, which has of course been running for a few years now in the Cambrian network. It has yet to come to Scotland. I understand that it is also going to GWR and London Crossrail. In particular, we would see benefits in better capacity utilisation, but I wonder whether, in particular, it might be appropriate to consider introducing it north of Inverness, where there are signalling issues, and where, like Cambrian, it is a relatively detached part of the network that could perhaps pilot what we need to do. Of course, we have one-half of what we need for it, the GSMR communications system, which is now more or less universal. Is it time we started to introduce it in Scotland? I can hear my director of rail to my left saying heavily, as you spoke, Mr Stevenson. I am sure not for any personal reasons, but I think that he might have something to say on this, so I will hand over to him in just a second. From our experience of the ERTMS, although the progress or the uptake of development and implementation of it across the UK and across Europe generally has been quite slow, as yet we do not believe that there is necessarily a robust business case for it and what would be a potentially significant investment in Scotland. Therefore, we would not recommend it at this stage, however. We are working closely with Network Rail on further developing an appropriate signalling strategy for control period 6, but I might just hand over to Bill Reeve if he wishes to supplement that answer. Not much more to add to that, minister, than to say that the European Rail traffic management system is a tantalising system because it takes the control of trains from drivers having to look at signals on the track and puts the authority to proceed at speed into the cab, which is eminently sensible, but its track record of implementation has not been great to date. I have lost track of the number of project managers around Europe that I have talked to who have been tearing their hair out and crying into their beer over how long and how much it has taken. I think that we maintain a close interest, but it is a system that was designed originally for very high-speed lines. A lot of the problems have been adaptation of that technology for railways more like those that we have in Scotland. On a Cambrian line, after a lot of cost and a lot of time, it successfully introduced a signalling system that extended journey times and increased costs. I am not sure that we want to rush to do that just yet. I understand that the UK expects to implement it by 2044, so we are clearly not rushing in the GBN epoch. I think that that brings us to an end of our questions. Is there anything that you think we have missed that you would like to quickly sum up? No, I am sure that there is anything that has not been covered, but I do not think so. We did not really go into freight as much as perhaps I would like to, but again, when the HLOS is published in future committee appearances, I will be happy to come back in and have a conversation around that. I thank the members for their questions and their feedback. We are determined to publish the HLOS by the statutory date deadline, but hopefully before that, if we are able to do so, if members have further comments that they wish to feed back, the sooner, the better would be helpful. I am sure that the public will be taking you up on the offer to receive letters on how things could co-ordinate better between the different types of transport. I would like to thank Bill Reeve for attending this morning, and John Provinter, who unfortunately did not get to say anything, but thank you very much for attending. I am briefly going to suspend the meeting to allow witnesses to change. I am going to reconvene the meeting now to take a gender item 2, which is on Presswick airport, where we will receive an update on the progress of Glasgow Presswick airport and its financial management. I would like to welcome Andrew Miller, chair, Ron Smith, the chief executive, and Derek Banks, a financial and commercial director. Would you like to make a brief opening statement? I would. Thank you, convener. I will keep it short. I and the chairman of TS Holdings Limited and also the chair of the operating board of Presswick. To my right, we have Mr Ron Smith, as you said, the CEO and to my left, Mr Derek Banks, who is the finance and commercial director. This is our first appearance in front of the Scottish Parliamentary Committee, and I am pleased with the timing of this, because it coincides with the launch of our five-year plan, which covers the years 2017 to 2022. It sets out the action that we are already taking to turn the business around to become a privately owned but profitable and sustainable airport for generations to come. The document is based on a considerable amount of analysis and hard work, and it articulates upon a significant amount of work that is already under way, but the plan is credible and we feel comfortable that we can deliver. At the heart of our strategic plan is the determination not to see only to see the airport return to private ownership, but to drive to create a long-term sustainable business for generations to come and also playing a wider role in the airshare economy and the Scottish economy in general. The airport employs over 300 people and we facilitate a 365-day, 24-hour-day operation at Presswick, and we further support four and a half thousand jobs in the region, a large proportion of those jobs being very high value in terms of average salary and GPA created. In 2014 Audit Scotland reported that the airport contributed to 61.1 million to the Scottish economy. Our strategic plan maps out how we can build on this significant contribution and increase employment opportunities within the region, but also to help the Scottish economy in areas of tourism, in terms of exports and, of course, the aviation industry in general. We face a number of challenges. For example, there was a major reduction in passenger numbers from 1.1 million to 624,000 in 2014, and there had also been a lack of significant investment with the previous owners. However, we are working to address the under spend of capital. Since joining the board, I have been focused on bringing a team together with the knowledge, expertise and experience to have good governance processes in place and to use our resources effectively and to harness the goodwill of the stakeholders and drive the business forward. It should be noted that, under the direction of the board, the executive team has exceeded expectations on budgets each year for the last two years, and although the financial accounts, as of 31 March 2017, are unaudited, it will show that we have achieved a substantial reduction in our operating losses. The turnaround will however be challenging and it will take time, but it has started and we are moving in the right direction. We operate in a dynamic and highly competitive environment. There are a further unknowns ahead for us, such as Brexit and, for instance, the outcome of APD discussions. We take that into consideration in our plans and we believe that our strategic plan is measured and resilient. Glasgow Presswick Airport has a phenomenal amount of potential and we have a clear plan and we strongly believe that we could offer excellent value to potential investors. We have the most diverse service offering of any airport in Scotland, including passenger, fixed-space operations, large-scale and specialist cargo operations, aviation emergency receipt and, in the future, hopefully access to space flight. We offer a number of unique advantages. Those include the only airport in Scotland, which has two runways, one of which is the longest in the country, which allows us to handle aircraft of any size. We have abundant land over 850 acres and the ability to adapt our operations as quickly as we can manage in terms of the future ahead. We are also the only airport that is accessible by rail directly to our door, providing easily affordable and sustainable access to air travel and makes us the only airport that has fuel delivered by rail direct from the refinery, which provides national aviation resilience. We operate 24x7 and we have the capacity available, which ensures that Scotland does not have constraints in its ability to connect with the global market. We operate the airport on a commercial basis and arm's length from the Government. However, we are cognisant of the fact that the lender is the public purse and the level of transparency and accountability that comes with that is critical to us. We welcome your questions and will endeavour to provide as much information as possible. There are quite a few questions on a variety of subjects, and they could move around the whole remit that you cover. John is going to be the first person to start off. Thank you for your opening statement as well. Could you give us an overview of the performance of the airport since two years now, since the Scottish ministers bought it, and just to feel for how it is done? You said that the losses are less than they used to be. As an accountant, I do not like hearing about losses anyway, so we are still making losses about passengers and freight over the past two years. John Deyra? Certainly in terms of performance over the past couple of years, they have been better than forecast, although there are still losses and significant losses within that. Part of the issue, obviously, is the impairment of assets as we spend throughout the year. I will try and explain impairment, if you bear with me. Normally, you would appreciate assets over the life of the asset, and that can range from three years to 40 years, depending on what it is, but we have to write that off within the year. That is roughly about £4 million a year, which is exacerbating losses or apparent losses. If you are trying to compare them, it is quite difficult to do that, albeit that we can do it in terms of the adjusted EBITDA, which is looking at the operating losses. Those operating losses have come down not significantly, but have been progressing downwards over the past couple of years. Is that the most positive thing that has happened is that we are making less loss than we used to? I think that just because of the challenging environment that we are in, we are always going to find it difficult, and we are looking at everything that we can do to reduce costs, but also increase the income. For instance, over the past three years, military income has increased by 37 per cent. Property is now, in terms of occupancy, going from 58 per cent a couple of years ago to 95 per cent. Cargo is still a struggle. It has maintained its levels, but it is not improving. However, over every income stream, we are slowly progressing. In terms of passenger numbers, we have dropped from the £1.1 million down to £624,000. That increased to £678,000 just last year, and we are projecting forward to about £710,000 for this year. I think that some of my colleagues will ask more detail about cargo and passengers and so on. The final one for me would be, can you explain about the board? I understand that there are two boards, and how that works, and who does what? I will answer that question, if I may. The two boards were created to keep the stakeholder at the shareholder at arm's length because of EU rules and because of state-aid rules. The Scottish Government followed the model that was undertaken at Cardiff, when the Welsh Government took ownership of Cardiff Airport. There was some good work done there that the Scottish Government decided to follow to keep the business at arm's length. The whole call represents the shareholder, which is the Scottish Government, which has two civil servants myself and Ron on the board. They deal with the long-term strategic direction of the business and make sure that the business adhering to the financial plans at the operating level. We have all the functions covered as a normal board, and we have the non-executive directors who have the correct experience at that board, and I chaired both boards. It is a compliance issue from a EU perspective and from a state-aid perspective. Good morning, gentlemen. My question is about the new strategic plan. The real question is why it was a new strategic plan required, given that the last one was only published in late 2014. How do the two documents differ? That is a very good question. It is worth noting that with the tremendous reduction in passion numbers that fell very quickly around that time, we all realised that it was a necessity to take a far more realistic view about the new numbers and go into a reset position, which will become a very realistic base. It was also the view of the non-executive team and the executive team, that a new realistic forward look at all of our aspects of growth, all of our revenue streams, should be attacked, and that we would set a new strategy that would be geared very heavily and try to win more business across all of our revenue streams. The new team put together a new plan, with a highly realistic basis, with a highly refined focus on what was achievable, and with a view to driving the revenue streams to get us into profitability for the long term. Given that we have seen the threat, the tonnage drop, we have seen passenger numbers drop, we have seen the number of aircraft movements drop, so that was what drove the new plan. The original plan, for instance, had 1.1 million passengers, which was the running rate at the beginning of 2014. When I joined the business on 1 December that year, the running rate was 620,000 passengers roughly, so we had to reset the business, both in terms of the future think, but also in terms of cost control as well, as one said, reset. I am assuming from that that the question would be what progress was made in meeting the goals set out in the original strategic plan, and I suppose the answer to that is that they would not be met at all, in other words, they would go in the wrong way. I would characterise it as the patient was bleeding and we had to stabilise the patient. The reset was the stabilisation of the business given the change in economic factors that were driving the issue of the following numbers. As a follower to that, you are saying how difficult things are. In some of our papers, it says that the capital plan does not include the cost of replacing the existing primary radar, which must be done within the next five years. How much is that likely to cost and how are you proposing that you will be able to finance that, if that is something that needs to be done in a fairly short time scale? In terms of the radar, we have started the implementation of the radar, so the tower has been built and the equipment is now being tested. That has been primarily funded by the wind farm development funds, which we have to maintain that radar for the next 25 years in terms of recognising those funds. If anything goes wrong with it, we have to then maintain or repair or replace that. That has been funded by wind farms. You are well on the way to replacing that. It will be operational, I think, by later this year. You just clarified it. I am sorry, but I am confused. Is that from a community wind farm fund, or is that from a wind farm that you own yourself? No, it is wind farm developers. So it is a development fund that wind farmers have paid in? Yes. Wind farms come with a risk in terms of radar, in terms of the old technology, and the turning blades stop the radar working to try to get it right. Can you just give me an indication of how much that actually was, just because I think that people would want to know how much was contributed? In terms of contribution or the cost of the radar? Cost of the radar. Cost of the radar, I think, I believe is about £3.2 million. I have a question that I would just like to ask about staff. There have been a series of senior staff changes at the airport since 2014. Do you think that that is going to have a positive effect or a negative effect on performance and returning to profitability in 2022-23? You have got to consider that, when I joined the business, early question about the numbers surrounding the 2014 plan and the current performance, we had to make some changes at the senior level to put the right people in the right slots, and we made some changes. Some of the people concerned had contractual contracts from the previous owner, and we had to fulfil the legal obligations within those contracts. I would like to set the scene before I ask my questions. I live in Motherwell. I have travelled to press week on several occasions to pick up relations. Excellent journey time, excellent roads, excellent rail and excellent airport. The only problem was that, when I arrived at half past 10 or 11 o'clock at night, I was the only person in that airport, apart from the staff, waiting on my relations. Other people then arrived at about 11 o'clock, because I was very early. I got there earlier because of the excellent travelling roads to your area. Why is it that such an excellent airport, and I remember flying out of your airport a number of years ago and going to America, why have you lost so much of airlines? I think that there are only a few flights a day, one flight at night, three or four flights a day, going into press week. It is a national scandal that an airport such as Good Is Yours, with all those excellent things that are going for it, is not vibrant as much as I was in Glasgow on Sunday, and that was bursting at the seams, taking my son to he was flying out somewhere. Why is it that the last time, when was the last time a new scheduled passenger airline chose to operate from press week, and why is it proven to be so difficult to get people to come? It is a fantastic airport. Why is it so difficult to get airline people to come to your airport? I would like to take that one, please. It is a very good question. It is something that has been at the root of my whole thought process since joining the business. We certainly understand that, from the good old days—let me just say that the good old days at its maximum, the airport would still fall under the classification that the CAE put on small airports, because at 1.2 million passengers or 2.4 million passengers in its head that would still be regarded as a small airport. We have lost some business there because of strategic plans with some of the airlines. Some people have run errors—a good example—where they wanted to move. Keep in mind that they are the largest people moving over in Europe these days. They have part of their evolution. They see themselves as competing with a different set of competitors. They see themselves as challenging the major airlines these days and want to be alongside the major airlines in many cases. We have worked hard with Ryanair, certainly within the last few years, about getting alongside them to stop any further erosion of their passenger numbers and to restart building passenger numbers with that airline to some degree of success, as Derek alluded to earlier. That is not the end of the story. We are working very hard now with a whole raft of airlines that we have identified where we can offer something fairly unique in terms of capacity, in terms of time slots, in terms of ease of access to Glasgow and the rest of the south-west of Scotland and even into Northern England, in terms of the Lake District. That is the type of approach that we are making. We are looking towards airlines and routes that currently do not exist in Scotland or certainly in the west of Scotland to try to offer the uniqueness that we can handle and give the capacity and the excellent service levels that those people would expect from us. A lot of the problem comes from the history. The days of British Airways and the transatlantic and the war days and some of the people that you probably referred to going to the US in Canada, they are no longer with us. There is a new generation of operators. Low cost is now the dominant factor in airline development. We know that it takes around 18 months to 36 months to get a passenger airline committed to a route and an awful lot of work in between times to massage it across the line. That is exactly what we are doing now. We have a number of very strong possibilities for new routes and new airlines, and that is exactly what we are following up on. Our plan takes a conservative but realistic view of how much of that business we expect to land. Are you securing new airlines and how important is this in meeting the objectives of the strategic plan? At the end of the day, I think that Ryanair only flies to Barcelona? No, no, no. Are they doing other ones? There are more areas of people who can open up their airlines to you. How much are you sitting down to talk to airlines and convince them to come and press them? It goes, I think that it is a really excellent airport. I will compliment you on it, but we have to get our finger out and get something done about it. Well, if you read the forward of the strategic plan, my own forward, you will see that the first thing identified when it took on this role was the fact that we were not putting enough effort into winning new business. That is really where I made some major changes to the structure of the organisation to bring in specialists in passenger development, route development manager, in cargo and freight development, in FBO and military-type business. We now have people managing those revenue streams and attracting new business that are the lifeblood of the airport and are the biggest part of the strategic plan. Page 25 of the strategic plan shows all the destinations that we fly to. Actually, we have one or two exclusive destinations that we serve from Glasgow Press week that are not actually served from other airports in Scotland. We are making that progress. We have got far closer alongside Ryanair than possibly we have ever been, and we are now very close to the number of other airlines on those new routes. Sadly, because of the very strong commercial restraints put on us by those negotiations, it would be very unwiservable to give any further details on who we are talking to, because the easiest way to lose a new route is for that type of information to enter the public domain and to scale the airline, or perhaps the shareholders. Many of them are PLCs and it could actually have an effect on the stock value. We can and are delighted to come back to this committee and give further details when we can, and then we can certainly give the full details of the successes that we have achieved over the last 12 months or the next time we sit in front of committee. It is true, Ron, that Ryanair announced a new route to Poland about two weeks ago. It is to the city of Ryskow in south-eastern Poland. It has been booking remarkably well. It is a fantastic set out there, because not only is it a high point of aviation engineering in Poland, and it will match very nicely with our aviation manufacturing business in Scotland, but it is about 100km from the border with Ukraine, and it is about 80km from the border with Slovakia. We know that some of those bookings are already to the citizens of those countries, so we are using that as the entry point into the UK and through Glasgow Presswick. It is an excellent opportunity to show Ryanair exactly what we can do when we are given that table of opportunity. It is only Ryanair that fly out of Presswick, or is there more? It is only scheduled to carry out other flights from Presswick today, but we do have other services that fly out of Presswick. I will bend your airport in a couple of weeks' time and I will pick up a couple of relations again. I may see you around. Derek, if you can, there are a few questions piling up on the back of that. In terms of the airline traffic as well, it takes a length of time to get that business in anything from 18 months to 36 months, so we are not sent back waiting for that to happen. We are actually being active in progressing other income streams as well. Ron, I think that we all appreciate that the last thing that this committee wants to do is frighten potential customers away. Jamie is going to come in with a question on the back of that. I appreciate that many of these discussions are sensitive commercial discussions, but, in the Audit Scotland report from 2015, it stated that the airport is not viable without Ryanair. I come from a commercial background, and that sounds to me like a tremendous risk to business when it has pretty much a sole customer who is essential for the success of the business. My experience of Ryanair falling out with airports has happened in other parts of Europe. For example, I recall when they pulled out of the Granada route from the UK, and the devastation that it had on the local tourist industry and the local economy. What are you doing to address the fact that this is such a huge risk that you have a sole airline who is perhaps somewhat notorious for falling out with airports? I think that Ryanair is a hugely successful airline, albeit an unusual one. One point that is very worth while making is that Ryanair started its overseas business at Glasgow Press Week, when it was still a very fledgling airline. As part of that launch into the UK, it is only, in fact, a heavy maintenance base at Press Week, which it has since expanded, and we are in discussions with it again about further expanding. The commitment to Press Week is very strong. There are 350 or 300 jobs at the Ryanair maintenance facility, plus a very high number of apprentices employed in that maintenance and overhaul operation, which, as I said earlier, is the only one of its type anywhere in the Ryanair network. The fact that we are having this discussion with them about further expansion and the creation of more jobs is a very strong indicator to the fact that they see a future for the Press Week facility. It also means that every Ryanair aircraft in their fleet, which is rapidly expanding, comes to Press Week for heavy maintenance and sea check overhaul. There is a very strong bond there that is assisted by a whole new attitude from the senior management team and the executive team at Glasgow Press Week these days in terms of working alongside Ryanair. It was a long time when there was a vacuum. We have certainly plugged that vacuum when we now have a very strong working relationship with the senior team in Dublin at Ryanair. Mr Quickie, flying these days commercially is the most miserable experience in earth, and it is all down to airports. When I started flying 50 years ago, you parked at the front of the airport, you were in the air 20 minutes later, and the hassle was almost nil. Is that a huge advantage that Press Week has in terms of relatively small throughput at the moment and relatively capacious facilities? We have talked about airlines. How are we energising passengers to demand services from what is actually—let me be as good as I can—a relatively stress-free departure experience? It is a good point that you raised. Obviously costs associated with compliance, for instance, security-related issues, have fundamentally changed. They work against calm passenger experience, but that is legislated. However, I take your point. The other areas are obviously the retail experience or the spend-by-head experience that all airports are trying to achieve because it is the best way of making the airport profitable. When the airport at Press Week was designed, and we will get on to your point, the passenger processes were completely different in the 60s than they are today. You had paper tickets, and the allocation between airside and landside was 70 per cent landside, counting the paper tickets, checking in the bag, checking passports, and no technology. Where we are today, which is the exact opposite, all the space has to be airside, because that is where you make the most money. Unfortunately, in the history of Press Week Airport, that dynamic in terms of switch of land allocation within the building has not taken place. It is one of the projects that Ronny's team is working on in terms of what we do if we have more money in terms of our increasing profitability and how we address that significant problem. The USP that we have is that we are very quiet, and we can give a very hands-on experience to the passenger. The downside is that, to achieve that, we have to create an environment that is conducive to that good passenger experience, but at the same time be very careful in how we spend our money. The management team does have plans in how we can address that, but it is very much that we perform and we get more money. That is exactly what we have been doing. We have had generalised upgrades in the building, but it is a very good point that you raise. It is not a comfortable experience, nor a Press Week. It is a very good experience at Press Week. I mean it at other airports. John, I think that you have got the next question. I do realise that you answered Mr Lyle and that you cannot say too much about detailed routes and all that kind of thing. In the strategic plan, it did specifically mention London as you would be hoping to get a route there at some point. Can you give us any comment on that at all? Yes, I would be delighted to. London is a vital hub for any airport in the UK, and we are working very hard and with a great deal of focus, prime focus, on making London a priority. London is served by many airports. We would have a preference of which one we would like to establish a route with, but we are working tirelessly to try to establish that London connection to serve the people of the west of Scotland with an alternative and to give the local catchment area a direct connection to the world. People use an airport when it has a flight going to where they want to go to or if it goes to a hub where they can transfer to where they want to go to. That transfer connectivity is vital to us and there is no better place in the UK to have that with than in London. We are working tirelessly with a number of the airports in London to set that up, and we have conducted some modifications and improvements to our both land side and the earth side infrastructure of the airport to cater for a domestic route or routes once we can actually get one over the line, but it is certainly our prime focus. It is UK domestic connectivity through London and also European and long-haul connectivity through other airports and airlines that we are targeting around Europe and in North America in particular. All of that is important, but London still remains our prime focus as a UK connecting hub. Before you move on to the next question, I was going to ask something else on that. Yes, absolutely, and then I will bring John Finnie in and then bring you back in. That is great. To be slightly devil's advocate, we have three airports in the centre of Scotland, central belt. Why would I, as a passenger, want to go to Prestwick when I have Glasgow and Edinburgh? Why would an airline want to go to Prestwick when it has got Glasgow and Edinburgh, which are closer to the population that both have either got or are about to get rail links? Is there anything unique about Prestwick that you can offer? John Finnie was talking about the market in terms of demand. The CAE stats say that the London catchment area is the biggest market available to the natural catchment area of Prestwick, which is basically Prestwick, the nearest airport. We are talking about the natural catchment area, and we know that it is over 200,000 packs a year by past Prestwick to get to another airport to travel to London. They would prefer not to do that. It is about us securing an airline that sees that opportunity, which may or may not have duplicated assets in the other two airport locations that you have alluded to, but to try and cut down the travel time, carbon footprint, et cetera, that is all part and parcel of the analysis. Can I just bring John in and then it may, Ron, tie in to the answer that you are going to give? Thank you, convener, and good morning panel. It was October last year that the Scottish Government very enthusiastically lent their support, her third runway, at Heathrow. They were positively salivating about all the benefits that would come to Scotland from that. I have the press release here, and we will now work with both Heathrow and the UK Government to ensure commitments made to Scotland are followed through. One of those commitments was in relation to, I quote here, the potential for a logistic hubs to be based at Prestwick airport is also an important part of the Heathrow offer. Can you outline what discussions you have had with the Scottish Government around this particular aspect of the work, please? Yes. In fact, there is a photograph and say the strategic plan of the very incident of the signing of that MOU, which took place at Glasgow Presswick airport. It is a commercial understanding that Heathrow will set up a number of supply hubs to support the construction of the new north runway and some of its additional terminal requirements for the extension of terminal 2 and further satellites of it. They learned, I think, within the construction of terminal 5 that that is a very congesting type operation. In order to meet some of the lessons learned in that issue, the supply hub approach is something that they are looking at in terms of spreading the supply chain around the UK to get better value for money and to reduce congestion by bringing componentry for the construction process and using alternative methods. We are certainly very much part of that. We were very early contenders in talking to Heathrow at a very high level. We had a stakeholder review with him in terms of the local stakeholders in South Asia. We have been to several events whereby we have followed on that interest as part of the process. We see that this is something that we are working closely with the Government in terms of following that opportunity. It only suggests in the MOU that it should be a supply support hub in Scotland. Presswick airport would be, in our opinion, an ideal location for that, and it seems that Heathrow will share that view. However, we are not the only bidding party, but we are in a strong position, we believe, and we will continue to drive the process to allow it to be a very suitable candidate in the selection of a supply hub for Scotland that has been guaranteed as part of the MOU. Do you want to give us some more details on that, Derek, in terms of the— Derek Mackay Sarah, you are coming in then, John. I think that it has got a full up. Yes, just very briefly. In terms of the process that we are having to go through, we have to register an interest by 31 July. We are currently working with stakeholders, including the South East Council and the Scottish Enterprise, to get a bid together. That is credible. As Ron says, Presswick is one of the options, but it is a very strong option in terms of our linkage with both marine, rail and air travel and road travel. As a logistics help, it makes a lot of sense to be there. You maybe don't, but perhaps you will sense my cynicism about the whole project. It is predicated on the assumption that a third one way would go ahead. Can you see what prominence you give the potential in your future projections for business? In my opinion, it would be wrong to put too much emphasis on it. There is nothing in the five-year plan of this document, although the MOU does talk about preferred access and slot access for any Scottish airport into that new facility. I do understand that it is not a done deal, but all those big projects have to plan well in advance. However, there is nothing in our five-year plan in that regard, other than we see the opportunity to provide a prefabrication hub, as Ron mentioned, for air, sea and road and rail, because Presswick is very near a very important rail outlet. I will grant a supplementary schedule. I may have noted you incorrectly, but in relation to military income, 38 per cent. Is that 38 per cent of the income or an increase of 38 per cent? Which military and what do they get? That is in terms of income generated. As increased by 38 per cent over the last three years, unfortunately, we cannot divulge the flights that go in and out of Presswick from a military point of view. Are you co-operating fully with authorities on the issue of rendition, albeit that that is perhaps from your perspective a historic matter? I think that Derek has given you an undertaking that he cannot really discuss it. I understand your point. Derek, if you are uncomfortable answering any further than you would, I am happy. I would say as the chair that all military aircraft, including civil aircraft, have to comply with the CAA and the Department of Transport rules. Any aircraft that complies with those rules can fly to any airport in the UK. I am not sure that you might be able to follow that up with the minister. If you want to. John, I think that you are next question. My other question was an area of freight and I understand from the strategic plan that the freight market has changed quite a lot in recent years. I wonder if you could explain that to us and how that is an advantage or disadvantage. The freight market that we talk about at Presswick is the market for dedicated freight. That is aircraft that are built or converted simply to become freighters and carry specialist freight and cargo. That market is probably in long-term decline, so we can sense it. However, we have a plan to cut ourselves a much bigger slice of the market by offering those very specialist services that are unique to Scotland at Glasgow Presswick. We have talked about experience in terms of ground-handling services, in terms of the right equipment to load very unusual and heavy cargo, and the ability to turn around very large freight aircraft such as 747s and 777 freighters. The bulk of the freight market that is booming is coming in the form of belly hold freight, which is basically the freight that is carried in the whole of a passenger aircraft, mostly flying long-haul. For example, it throws rapidly expanding freight business, which is due to the massive capacity that it has for aircraft with belly hold going all over the world and carrying freight with it almost as a by-product. The low-cost carriers do not like to use freight as an income stream because it slows down their turnarounds. The whole of the low-cost aircraft or airline industry is based on the flying years of the aircraft and maximising the hours in the sky. The last thing that they want is to reduce the turnaround time by taking on freight. As part of our new business focus of winning new airlines, passenger airlines, we are picking very closely some targets that would be very interested in carrying belly hold as a targeted market. We know who those airlines are. They probably have dedicated business themselves but are swinging more on to belly hold, and those are the type of knock-on effects that we see as good passenger development. However, we are also following up some airlines, passenger airlines, just because we can offer them a specialist freight facility as part of their belly hold programme. It is not as simple as it might seem, but we are trying to cover both markets by, A, attracting new airlines that would be interested in belly hold freight, and, second, by curing ourselves a much larger slice of the traditional, dedicated freighter market. Food exports would be a big thing for Scotland, and we are hoping to expand that further. Is that the kind of area that you are looking at where it has to move very quickly to another market? Anything high value with a shelf life has got to be the main target, and a prime Scottish export that meets those criteria is seafood and salmon. Those are the types of markets that we are looking at. We have opened up some dialogue with Food and Drink Scotland about the potential to have specialist facilities and really tap into that market. It is currently handled by road, excessive road transport down from Scotland to Heathrow, where, very often, it is exported right over the top of Presbyter as we enter North America. We have analysed the market and the potential, and we are trying to tap into it. Before I pose my question, I should start by expressing my support for the many local jobs that Presbyter Airport creates across the west of Scotland as a West Scotland member, and particularly in Ayrshire. I think that there is no doubt that there is a lot of good will across the country to see the airport succeed and grow successfully, but naturally to do so in the best value of the public funding that it is receiving. I have a specific question about Presbyter Airport. We have heard quite a lot about that in recent months and indeed years, and it does raise its head often, but very little detail is known around it or awareness of where we are at with the potential of using Presbyter. I wonder if the panel might want to elaborate on where we are at with discussions, who is making decisions on that, the sort of numbers that are involved, etc. Can I just ask you to be as brief and focused on it as possible? I will try my best, convener. We commissioned a report a couple of years ago to look at the feasibility of developing Presbyter Airport. That feasibility study came back with figures on the development costs to take that forward. In that, we have been given an estimate of about £5 million to build the infrastructure that is required for the first launch with one operator. That is relatively low sum of money in terms of developing a spaceport, and therefore we believe that it is a viable option to go forward. The issues that we have now got is obviously a matter for the UK Government in terms of taking that forward, and the funding requirements as well. We have submitted five applications to the recent UK Space Agency funding route. Unfortunately, that has been delayed because of PURDA in terms of the general election, but we are hopeful that at least one of those applications will go forward. Obviously, I cannot talk too much about it because it is commercially sensitive in terms of those bids, because it includes the operator's costs as well and income levels. Is the space tourism or what type of use is it? I will try to answer that question. It always gets in the papers that way, but the real demand is satellite launchers for GPS applications. The market is growing three or four times a year. We have a very major manufacturer in Glasgow in terms of Clydesat. All the satellite manufacturers have got to truck their goods to Eastern Europe in the main and wait on the space to go up on a vertical launch. This is a horizontal launch with a pod that goes up to about 55,000 feet. It launches the pod that way—a phenomenal reduction of course, but also a phenomenal demand. What the satellite industry is saying to us, we are looking for a low-cost launch facility like a low-cost airline. The £5 million that is required in capital investment to allow this to happen, is that money that you are applying for from the UK Government, from the Space Agency, from the Scottish Government? I am unsure as to where that money will come from. We have put in submissions to the UK Space Agency programme to try and recover some of that money. Okay, thank you. I will move on very quickly and briefly to some of the other sorts of revenue that you have, such as fixed-base, business aviation and military. How do you plan to grow those revenues? Excellent question. It is part of the overall growth process. Military is a very good example of something that can happen quickly. I said earlier that gaining new passenger routes can take anywhere between 18 and 36 months. Military business winning can be substantially shorter than that. It can be days or weeks. In fact, we have found that our new business development manager for fixed-base operations, which includes military, has been in North America talking to some potential customers and the flights that he has managed to win have actually landed at Presswick before his return. It is a much shorter lead time in terms of winning that business. Some of the figures that DEC told in terms of the improvement in the earnings from military reflect that. We will continue to work on the military side on that basis. It is all about contacts and meeting people. It is all about reassuring people that we have in place the ground services, the technical capability and the fueling capability that attracts that type of business. A good example of that would be us working very closely with a hydro entertainment facility. We had a star—I will not mention the name—but we had five, seven, four, seven aircraft—free aircraft—that were dedicated to a two-night performance at the Scottish Hydro. Previously, that business would have gone to another airport down south. We worked tirelessly with the Hydro management team to secure those aircraft, which was for costumes only for that period of time. It is a very good example of how we have improved the revenue streams through better business development processes. Richard, you have the next question. I will try to be brief. I have got an additional one. You mentioned Ryanair service facility in Presswick. Do you not interest other companies to bring in? You get long runways, two runways, and do you get other people to come and serve their planes in Presswick? That was certainly part of our ambitions at the start of last year. I am really pleased to say that we have been very successful in doing that. We have attracted the very well-known aerospace maintenance and overhaul organisation Chevron into what was our largest vacant higher facility at Glasgow Presswick. It was vacant for a long number of years—10 years, I believe—when we were paying rates on an empty property and now we have no rates to pay an attendant to pay us rent, so the swing has been enormous. We are certainly putting more and more of that infrastructure developed into focusing on maintenance repair and overhaul to drive that income stream that we see is very good. We have a natural attraction for airlines based on the fact that Presswick has a long history of aviation maintenance and manufacturing, if you go back far enough, and that is a very big interest to the airlines in terms of their maintenance programmes. That is certainly a part of our focus. Rhyon Ayr had expected to carry 675,000 passengers from Presswick in 2017, but my calculation is over 13,000 people a week. The new strategic plan predicts 710,000 passengers, which is nearly 700 people per week. It is only equivalent to, if possible, depending on the size of the plane to extra planes. Why is the difference between what you are predicting and what Rhyon Ayr predict? In terms of Rhyon Ayr prediction, that was for 1617, the 675,000, which achieved 678,000. The 710 is actually for this financial year. Rhyon Ayr, because you are bringing on this new route to Poland, you are going to predict, plus the fact that you have all these extra slots that other airports do not have—it is a bit like the beer advert—you can reach other places that other people cannot, so you are predicting that you can do better this year. We will take any activity that Rhyon Ayr will give us in addition to all the earlier lines that we are approaching. The communication and conversations that we are having with our liaisons is really positive and I am progressing well. The strategic plan talks about harmonising pay and conditions for staff. What impact is that going to have on staff's salary and conditions? I can tell you that it is a very good question indeed. The situation at all airports is quite complex in terms of the number of positions in the salary spine. The one that we have at Glasgow Press week was particularly complicated. It has been operating on the national living wage standard for some of those levels for some time. We are trying now to simplify that. We have a process just launched that will simplify and make the salary scales far more transparent. We are looking at taking on board all of the pledges that are required under the Scottish Government's ideals. We are not quite there yet, but what we want to try to do is get a very clear, structured salary spine that everyone fits into and everyone can see what they fit into. We have taken a very strong programme where we have actually had what we have called our internal roadshow. Glasgow Press week is a very big site. The management team has gone out to various parts of it and presented what we are trying to do in consultation with our staff and our unions to make sure that they understand exactly what we are trying to do to get everyone into a far more simplified system and move everyone forward. It is our objective to move to the Scottish living wage, but because of the complexity that is going to take some time, but we are sharing that as part of our engagement process with the staff and our unions and making good headway with it. It is something that we see as vital. It is complicated. It will take us time. We are trying to make sure that we have the amount of funding available to cover that without spending any more money from the public purse. That itself is a complexity because to move today to the Scottish living wage would be some of the money that wages can afford, but our staff understand that. They understand that we are funded by the public purse and we have a very strong communication programme with them as part of our staff engagement policy to make sure that everyone knows what is going on and the fact that we are trying to move to that within the next three years. It is not good to mean any wage cuts for staff, given that a lot of the support for the airport is about its economic impact on the local community and taking home wages is very much power of that. We understand that very clearly, naturally. Of course, as I said, a lot of our staff are already on the UK living wage, and therefore cutting it would not be an option. We are trying to get better efficiencies from our staff. We are starting to look at any savings that we can make from our employment costs. However, any move to reduce salaries or to reduce contracts to zero hours or that type of thing is not something that we are looking at. We want to be a good employer, and we want to be a model around, but within our affordability, within the public sector. We can now move more into Derek's thing on finances, Mike. It would be very interesting to hear what is being said and the information that we have here, but I have to say that I am focusing on the airport, as we have already heard, is not viable without Ryanair. Ryanair are expanding their routes from Edinburgh. Flights are down, passenger numbers are down, freight is down—that is the information that we have got here. Mr Smith said earlier on that passengers want to fly from where they want to go. You have got to be where the passengers want to be. With other airports expanding, I have to ask a fundamental question. Is it not simply that the airport is in the wrong place to attract new business, whether it is passengers or whether it is airlines? I think that it is depressing reading, quite frankly. My question is therefore focused on the finance. As a taxpayer, when will we ever get the money that has been invested in your company back? I will clarify some of the issues here. In fact, passenger numbers are growing, and it has been growing for the past couple of years in terms of freight that is stabilised. It has fallen, has it not, from one point on? It has, but since Government ownership, it has increased from 624 up to predicted 710 for this year. Cargo numbers are static—it is around 11,500 tonnes per year over the last couple of years. We are doing as much as we can to turn around the business, and we are looking at every opportunity within that to look at our different income streams. For instance, in terms of property, that accounts for almost 20 per cent of our income. Passengers and the indirect impact of passengers only account for 33 per cent at this point in time. A large part of our business is around other income streams, and that is what we are trying to grow. We are growing them all at the same time, and some are being more challenging than others. That does not agree with, I have to say, the private papers that have been given to us about annual passenger numbers and the millions that have fallen, annual air transport movements have fallen, annual freight handled is plummeted from a few years ago. I am not confident that we are going to get our money back. I can confirm that the passenger numbers have increased and the caravan numbers have stabilized over the past couple of years. I would be happy to write the figures to you. Well, if you can provide more figures than we have got. For certainly the graphs that we have been producing show, as Mike has suggested, that transport movements have decreased. I think that passenger numbers would be difficult to tell exactly from the graph, but it is just above a flat line, but it is not much more than that. Freight handled is definitely down, according to our figures. I think that what would be helpful is that our accounts will be published this year around about September, and that would demonstrate a lot of those figures, but I would be happy to write it in advance of that. I am asking a more fundamental question, which I think has been skirted around so far this morning. We have two major airports and three airports in the central belt, and people spend their money on a service and they want to go to an airport and get on a flight to where they want to go to. The problem seems to me, and I am being radical here, I seem to be the only one voicing it, that you are in the wrong place. Can I just answer that question, Derek? If I may, I go back to the definition that Presswick is the closest airport to my home, it is where I would like to fly out of. Last year, there were 1.6 million passengers that fell into that category, so we only have roughly between six and 700,000 of that, so there is a potential of one million that currently is not exercising that catchment right to fly out of Presswick, and that is the number one macroeconomic dynamic that we are following. The management team, the business development team, their job is to find that 1 million incremental packs is part of the process, so airports are big to differ, and airports are not in the wrong place. I am hopeful that that is correct, and my impression is not the right one. When, therefore, I go back to my fundamental question about finance, if you are so positive about the future of Presswick, when, as a taxpayer, are we going to get our money back? It is partly tied into the question that I want to ask, and maybe we could just clarify this, just for us. The 2017 accounts are unaudited at the moment, I think, is what you said, but you will have a book value for the airport, is that correct? A book value for the assets? We do, yes. Can you disclose the book value of the assets? I would rather not do that at this point in time. Can you give me the book value of the assets in 2016? That asset is very low, it depends if you are talking about the assets within the accounts or the perceived assets, as would be valued at a later date. There must be a way of me being able to get the answer to the question of what is the value of the asset in 2016, not on income stream, on a book value. In terms of that income, that book value, because of the issue of impairment, the book value does not recognise fully the assets that have been purchased over the last few years, so all the last three years that we have spent, roughly £12 million in the airport, that is not recognised as an asset within the business. I am not trying to avoid the question, it is just that it is very difficult to give an appropriate answer. I think that the question that Mike and I are both trying to get to the bottom of is that, if you have a book value of the assets, when it is disclosed and we understand what the book value is, if you add £39.6 million, which is the loan up until 2022, my understanding is that the value of the airport should be in excess of those two figures. My question is, and I guess what Mike is asking, is that in 2022, will the value of the presswick airport exceed the £39.6 million plus the current value of the airport? If it does not, then one has to ask whether it is an investment with a viable proposition, just from a business point of view. It certainly has the potential to do that. Sorry, I think that every business would like to think that it has the potential to do it. Is it realistic that it is going to happen? With the plan in place in its over the five years and looking at the market at this point in time, we believe that it is possible. I would like to respond to my question, which is, when do they think that the taxpayer, what year do they think that the taxpayer will get their money back from the investment in your company? In terms of the strategic plan, we returned to profitability within 2022. Thereafter, depending on cash flows, we would then look to start repaying the loan. Start repaying the loan? In 2022, your cash flow is going to be warped, so I understand that. That is the point where we break even beyond that period. How long will it take to repay £39.6 million, which is the investment between now and 2022, based on your strategic plan? Based on the projection that we have, and we have done that for 25 years, we reckon that it will be able 10 years after that date. 10 years, and in those 10 years, post 2022, the airport will generate 39.6 million plus interest plus running costs. Gosh, that is a lot of money. Sorry, John, do you want to come in on the back of that? Stuart? Just one advantage would be helpful to confirm. Presswick has the lowest impact of weather of any airport in the UK. Is that correct? We were asked earlier about attracting the supply of presswick to airlines. One of the things that we have is capacity. You are saying about why would people want to go to presswick when they can catch a flight from other airports in central belt. The simple is that a lot of airports in the UK, and those two in particular, are in a fast train of capacity. It is something that we have in abundance, and it is certainly one of the things that is starting to attract the airlines so that we can not only give them the landings that are required, but the timings of those slots, because right now it would be very difficult, and it is not for me to say, but for an airline to get a new slot at Edinburgh today would be pretty difficult. Particularly at a time slot that they would prefer. We do have that advantage, and that is what we are trying to exploit as part of building the attractiveness of Glasgow Presswick to the airlines. I will let Richard come in very briefly before I ask Gail for the final question. I agree with you that you have the slots and you have the time, and the other thing to go back to Mike Rombol's questions, if I stay in Murdoll and I want to fly to Edinburgh, it takes me some time to get there. If I want to go to Glasgow, it takes me some time to get there. The new M74 extension, the MA upgrade, it takes less time to get to Presswick. That is where you are falling down, guys. You are not advising people that you can get to Presswick quicker than what you thought you could a year ago. We have gone down the path of launching a new campaign of communications about travelling times, both on the rail network and the national coach network, as well as driving it. All of the things that you have said come into play. We have things such as half-price rail travel from anywhere in Scotland to Presswick airport, but getting that message across has been quite difficult. We are redoubling our efforts to try and really communicate with the market to make sure that people understand it. A lot of the catchment that Glasgow sees as its own—South West, Glasgow, Newton, Mernswick, etc.—is much, much easier to get to Presswick. That is to get to Glasgow. Despite Glasgow being a bit closer, so it is getting that message across as a challenge and certainly one more very focused on that. Ron, thank you very much for that. I am going to give the final question, if I may, to the deputy convener, Gail. We spoke a lot about Ryanair and, certainly, Michael Leary has been very vocal on how he thinks that Brexit is going to affect Scottish aviation. Can you tell me how leaving the European Union is going to affect Presswick airport? That is a very good question. Obviously, we have a Brexit risk overly in the business. It was not something that we had planned for in the previous plans for the business, and it will have significant impact. Clearly, no one individual is absolutely sure what the outcome is going to be. If we go back to the dark days of bilaterals, where there is restricted access in terms of duality of one country providing capacity and pricing against another country, it will significantly reduce the size of the market. Ryanair and, indeed, EasyJet have capitalised on the freedom within the EU, any airline, any nation can fly anywhere they want. That turned Ryanair into the biggest airline in Europe for a smoother advantage, along with EasyJet. The low-cost businesses are somewhat exposed, one could say, in terms of the way forward. Both airlines have taken measures to mitigate that. It is in the public domain. Caroline McAll, the CEO of EasyJet, suggested that they are incorporating the operating licences of their whole fleet in the German domain so that, through German location and air operating certificate licencing, they can access the other markets. A lot of airlines are actually working around the outcome or the issues for Brexit, but no one individual knows. It is just a matter of looking at all the issues and preparing robust plans forward. That is before we even consider the issues to do with US dollar to UK pound currency denominations. Airlines cost about 75 per cent, if your low cost, are denominated in US dollars, so a reduction in currency between 20 per cent adds 20 per cent to 75 per cent of the cost base. That is an impact that we are feeling just now, just in foreign exchange. That is before you can consider things like fuel. It is a very difficult way to navigate forward. Ron and his team are in a very broad range of experiences and dialogues that I have with people in the aviation industry, which is my background. I know a lot of people and we are in dialogue constantly to see how they are looking towards the way forward, but nobody knows the one and only path. That is the issue that we have here. That is all the questions that we have for you. I suspect that we will be asking you to come back. I think that you said that it was your first visitation to the committee. I am pretty sure that it will not be your last visitation to the committee. I suspect that, when the accounts are audited and published, the committee may wish to see again. I would like to thank you for coming and for being so open and honest where you could be and to bring us up to speed on what is happening at press week. I would like to briefly suspend—well, no—actually, that concludes the committee's business today, so thank you very much for attending. To anybody or all of you on the committee to visit press week to give us a three-dimensional understanding of the business, we did offer that to the previous committee that we reported to the ICI committee. They were planned to come down, but we are open and transparent. If you want to visit, we would welcome you to come. I am sure that members of the committee would like to come down and the clerks will tie it up and try to make it at a time that suits the majority.