COMMONS

£285 million airport fiasco has unquestionably failed British taxpayers

14 December 2016

The Public Accounts Committee report says that the Government must explain who is accountable for serious failings in a project to design and build an airport on the island of St Helena.

"Staggering" that Department did not foresee problems

In the report, the Committee concludes it is "staggering" that the Department for International Development did not foresee problems that prevent the £285.5m taxpayer-funded facility being used by commercial aircraft.

'Wind shear', a well-known concept in airport construction, produces dangerous conditions on the airport approach and had been observed on St Helena by Charles Darwin in 1836.

While the airport has handled a small number of flights, the wind conditions have precluded operation of the planned commercial service to the island, which is a UK overseas territory.

Doubt that airport will give St Helena financial self-sufficiency

The Report states:

"The Department was evasive on the question of who should be held responsible, and is yet to hold anyone to account, either internally or externally for the failure to identify this fundamental issue. Nor has it identified the extent or cost of remedial action required.

There is also doubt over whether the airport, when operational, will lead to St Helena becoming financially self-sufficient, due to significant uncertainties over projected tourist growth figures and a lack of progress toward attracting investment."

The Department is conducting its own review of the project and the Committee calls on it to submit a copy of its review, as soon as it is completed, identifying who was accountable on the issue of wind shear.

Scepticism of projected tourist numbers

It urges the Department to write by April setting out its strategy and the forecast costs for bringing the airport into commercial use, noting the Department is "now in a potentially difficult position when it comes to negotiating the best possible deal with a new commercial air service provider".

The Committee is "extremely sceptical" about the Department's projected tourism figures and calls for these to be recalculated "to provide an updated assessment of progress towards economic self-sufficiency" for St Helena.

Action should also be taken to help remove barriers to inward investment on the island which, the Committee warns, could be further hindered by "reputational damage…from this fiasco".

Chair's comments

Meg Hillier, Chair of the PAC, said:

"The Government has an obligation to support St Helena but a £285m white elephant serves neither its people nor the taxpayers footing the bill.

The failure to undertake robust due diligence on this project is truly appalling. I also have serious concerns about the airport’s business case, which was marginal at best.

A more modest airport could have addressed the practical needs of the Saints. Scaling up the project may have made sense were it not done on the back of such unconvincing projections.

The result is a disaster: a commercial airport that is not fit for purpose, no credible plan to salvage value for money, and no clarity on exactly who is responsible for the whole sorry mess."

Report summary

The Department for International Development has spent £285.5m of taxpayers' money on building an airport in St Helena that is not usable by commercial airlines.

It is staggering that the Department did not foresee and address the impact of difficult wind conditions on landing commercial aircraft safely.

Department "evasive" on who is responsible

The Department was evasive on the question of who should be held responsible, and is yet to hold anyone to account, either internally or externally for the failure to identify this fundamental issue. Nor has it identified the extent or cost of remedial action required.

There is also doubt over whether the airport, when operational, will lead to St Helena becoming financially self-sufficient, due to significant uncertainties over projected tourist growth figures and a lack of progress toward attracting investment.

Thus far, the Department has unquestionably failed the residents of St Helena and the British taxpayer.

Further information

Image: Paul Tyson

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