Separate finances of harbours and airport
IT IS interesting to see that it is only recently since the March States meeting that Deputy Roffey and the STSB are now freely admitting that the Guernsey Ports’ losses are caused by the airport and not the harbour, and that the harbours are continuously cross subsidising the airport.
Whereas the harbour and airport finances were unfortunately linked only by the ports holding account up to 2009, again to the detriment of the harbours by a one-way cross subsidy.
In 2009 the finances for the airport and the harbours were brought together, further obscuring the performance of each part.
In fact since 2009 the airport has made an operating deficit each and every year, this is now totalling £45m. The harbours have made an operating surplus in this period of +£18m. This is a serious and continuous cross subsidy to the detriment of the harbours and it needs to stop.
The finances of the harbours need to be completely separated once and for all from that of the airport, and the harbour master, a maritime person, needs to be responsible for the operation of the harbours.
The overall senior layer of civil servants managing the ports needs to be removed from the harbours.
The harbours will need to stand alone with separate finances and to be allowed to retain their surpluses.
The airport will inevitably need to be directly subsidised by the States of Guernsey directly.
There is no synergy, no efficiencies of scale, common experience or economy of scale in running the harbours and the airport together.
DAVID NORMAN
Guernsey Marine Traders’ Association LBG and
NICK GUILLEMETTE
Guernsey Boatowners’ Association LBG
STSB president Deputy Peter Roffey replies:
The harbours are not currently subsidising the airport. Rather the hefty subsidy the airport is relying on is coming from one source and one source only, which is the taxpayer.
That subsidy must be reduced, which we are looking to do through a combination of efficiencies and savings, exploiting new commercial opportunities, and realistic charging policies.
Looking at the harbours in isolation, it is very good to see a modest surplus. But it is way, way below the level required to fund the capital investment the harbours need now and in the years ahead. They still have a long way to go to reach a self-sustaining level of income.
If, in the future, we were to wean Guernsey Ports off any taxpayer support, then either the harbours would have to cross-subsidise the airport, or another way would need to be found to make the airport sustainable.
That could be through much higher passenger charges, but that would probably have a very damaging impact on the wider economy. This is why the STSB has raised the possibility of a fixed general revenue grant for the airport as one possible approach, which we would like to explore with the Policy & Resources Committee.