The public examination into the development consent order application for the Manston airport site reopens next week.
Hearings resume on Monday (June 3) at Discovery Park with the hot topic of compulsory acquisition -as well as funding and funders –being heard on June 4.
The DCO bid is being made by firm RiverOak Strategic Partners with the aim of acquiring the site and creating a cargo hub and associated aviation business.
However, the land is owned by Stone Hill Park which has submitted a planning application to create up to 3,700 homes, business and leisure and associated infrastructure.
One of the major questions posed has been how the project, which RSP say will cost in the region of £306 million, will be funded and by whom.
RSP says the airport project has “attracted significant interest from a wide range of further institutional investors based in the UK, the Far East and North America.”
The company has not named the investors, saying this is due to: “unavoidable constraints of commercial confidentiality, particularly in the context where private individuals are involved in funding the project and investing in major infrastructure.”
RSP says it will provide examiners with a statement identifying the individuals who have invested and are committed to further investment, together with a version where the confidential information is redacted. They want a redacted version to be made available to the public.
SHP, who would be forced to relinquish the site if the DCO is granted, has accused RSP of a ‘Wild West’ approach to the examination.
The SHP response says: “The applicant has consistently failed to provide the examination with the requested information. In its answer, the applicant appears to be advocating for a “Wild West” approach, whereby any legitimate concerns and the ExA’s commitments to openness, transparency and impartiality should be put to one side so as not to risk investment in the UK from anonymous “non-dom” investors. These “investors” are seeking to deprive another party of its land.”
RSP say: “Business Investment Relief is an HMRC-approved scheme introduced to encourage non-domiciled UK residents to invest in the UK and does not require those using it to be disclosed. For the ExA to insist on full disclosure of those individual investors has the potential to undermine this type of investment in the UK.”
RSP suggests that if examiners do not wish to take information into account that is not openly available “then it leaves the issue to the Secretary of State to decide.”
SHP has branded that suggestion as “ludicrous” and demonstrating “arrogance.”
A revised funding statement submitted by RSP is an updated version of the original made in July 2018.
Changes have been made to the costs, with the submission now stating:
Noise mitigation costs have been reassessed as £3.85m rather than £5.6m;
Construction costs have been reassessed as £306m rather than £300m;
The first phase of construction has been reassessed as £180m rather than £100m.
On the question of capital funding the RSP statement says “RiverOak Investments (UK) M.I.O Investments Limited (“RIUMIO”) is a UK registered company whose ultimate beneficial owners are resident in Switzerland and the United Kingdom. RIUMIO is managed and administered by Helix Fiduciary AG, a Swiss registered and regulated fiduciary company on behalf of the beneficial owners.
“Helix also manages and controls all the investors’ funds that provide the funding for the Manston DCO.”
It adds that a revised joint venture agreement has “access to committed and unencumbered funds to fund compulsory acquisition and noise mitigation required by the DCO (totalling £11.35m, but in fact £15 million has been committed).”
The statement says: “Full cost of the project will be met by private sector investors once the DCO is granted, “ but adds “such details cannot yet be finalised.”
RSP says: “It is important to note that the funding of the project is not dependent on any public funding, government subsidy or guarantee, or any access to borrowing or grants from UK or European funds.
“Should the project receive development consent, RiverOak can immediately draw down the land acquisition and noise mitigation costs from its current funders under the terms of its joint venture agreement. To meet the capital costs of construction, RiverOak will select one or more funders from amongst those who have already expressed interest and others that are likely to come forward, to secure the best deal for constructing and operating the project.”
An explanatory letter has been provided by Helix about its role in the funding of the project, together with a confirmatory letter from PwC, dated July 2018, although the Helix letter is not currently visible on the published document.
Revised costs for the initial phase of the project are £186 million; developing the remaining phases of the project over a 15-year period £120 million, making a total of £306 million.
RSP say so far, £15.92 million has been expended on the DCO process.
‘No assets, no intrinsic value’
Landowners SHP say the revised Funding Statement “is wholly underwhelming and adds nothing of any substance that would allow the applicant’s application to be fairly and adequately tested.”
The firm says there are no assets in RiverOak Operations Ltd and the shares have no intrinsic value. It adds: “It is important to note that all the funding has been provided by the Belize based MIO Investments Ltd on which no relevant information has been provided. The applicant intends that MIO will continue to provide funding but provides no evidence to support its assertion.”
SHP has also questioned the status of RSP holding companies as to whether they are dormant or trading, saying they appear to be put forward as both. They have also raised questions about the separation of liabilities and assets in RSP’s subsidiary companies -one of which holds the title for the Jentex site which RSP acquired for £2,418,185 in September 2018.
RSP says the companies are not dormant. The firm says RiverOak Investments (UK) Limited and RiverOak Manston Limited are holding companies that own RSP Limited which holds 100% interest in four subsidiary companies; RiverOak AL Limited, RiverOak Operations Limited, RiverOak Fuels Limited and RiverOak MSE Limited.
M.I.O Investments Limited was the funding vehicle for the airport project. It held 90% of shares in the company but was registered in Belize.
RSP has since restructured to ditch the Belize connection with RiverOak Investments (UK) Ltd showing 400 shares in UK ownership. However, 600 shares are registered under HLX Nominees Ltd in the British Virgin Islands (BVI).
SHP has criticised the move to a BVI, saying it provides no more transparency than the previous arrangement.
The restructure will be one of the areas examined during the June 4 hearing.
The hearing will also help examiners establish whether there is a compelling case in the public interest for the land to be acquired compulsorily, whether there are reasonable alternatives and whether agreement has been reached over plots of land that belong to the Crown.
Hearings for the Development Consent Order resume on June 3 at Laurence Suite, Building 500, Discovery Park, Sandwich.
Landscape, design, archaeology and heritage
3 June, 2.00pm (seating available from 1.30pm)
5 June, 10.00am (seating available from 9.30am)
Habitats Regulations Assessment, biodiversity and other environmental issues
5 June 2.00pm (seating available from 1.30pm)
Traffic and transport
6 June, 10.00am (seating available from 9.30am)
Draft Development Consent Order
7 June,10.00am (seating available from 9.30am)
Compulsory Acquisition Hearing 2
To include funding
4 June, 10.00am (seating available from 9.30am)