Supplementary memorandum by the Department
for Transport (NAT 2C)
NATS FINANCES INQUIRY—TUESDAY
11 JUNE
At the above hearing we undertook to provide
the Committee with information on the cost of external advisers
employed by the Department in relation to the NATS PPP, and the
cost of any ongoing advice.
The Department's lead advisers, the investment
bankers Credit Suisse First Boston, were appointed in October
1998. To date the Department has paid them fees totalling £9.9
million. We expect to incur a further £0.8 million before
terminating their contract in the autumn.
The legal advisers are Slaughter and May, who
commenced work on the project in November 1998. Expenditure on
their fees to date totals £6.7 million. We estimate that
we will spend a further £0.2 million on their services.
In addition, there were a number of minor consultancies
where advice was provided on accounting and property matters and
a range of technical issues. The total expenditure on these contracts
was £2.9 million. No further costs are expected to be incurred
under this heading.
Under the Civil Aviation Act 1982 the Civil
Aviation Authority is entitled to recharge the Department for
services Ministers have requested. These provisions enabled the
CAA and NATS to reclaim expenditure that was attributable to the
PPP process—principally costs for professional advisers,
and for splitting accommodation and services between the two bodies.
Costs repaid to the CAA totalled £5.7 million, and to NATS
£17.5 million. In addition, costs amounting to £2.8
million have been paid to the Civil Aviation Authority Pension
Scheme for the costs of splitting the scheme as a result of the
PPP. A further £2 million expenditure is anticipated under
these arrangements.
In summary, the Department has incurred costs
totalling £45.5 million to date, including some costs incurred
since completion of the PPP. It expects to incur a further £3
million in helping to secure long-term financial stability for
NATS.
David Jamieson
Parliamentary Under Secretary of State
1 July 2002
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