5:54PM, Tue Oct 23, 2012

Newcastle Airport Refinancing Deal Done 'Behind Closed Doors'

By Andy Hughes Location: Newcastle Airport

VIDEO: Cllr Robert Oliver criticises airport refinancing deal secrecy

Newcastle Airport's shareholders have been criticised once again for organising a multi-million pound refinancing deal involving taxpayers money "behind closed doors".

The airport, which is part-owned by the region’s councils, known as LA7, is in the process of refinancing its debt.

But a report into the deal, which will involve authorities borrowing several million pounds each, is being made available to cabinet members only, meaning opposition parties cannot object or have any input.

That decision is questioned by Cllr Robert Oliver, leader of Sunderland Conservative Party, who claims that the deal is "too important to be held in secret".

The news comes just weeks after the airport committee who approved the last deal, in 2006, was criticised for their incompetence. This resulted in the airport losing a multi-million pound High Court battle with a law firm.

Cllr Oliver told Sky Tyne and Wear: "The refinancing deal involves authorities borrowing huge amounts of money, and given that money is tight at the moment, the exact details of the deal should be properly scrutinised.

"We also have concerns about the recent legal case in which the former airport management, and specifically the local authority representatives were heavily criticised."

On October 16 2012 a memo was sent to councillors from all North East authorities.

It said: "In view of the commercially sensitive information contained within the report and the confidentiality obligations under the shareholders’ agreement, the report is being circulated to Cabinet Members only on this occasion."

In May 2012 Newcastle Airport announced it was seeking a new partner to take over a 49 percent share of the business after Copenhagen Airports said it was selling its shares.

On October 2 2012 Sky Tyne and Wear revealed Newcastle Airport had lost a multi-million pound legal battle with the law firm which advised on the previous £377m deal with the Royal Bank of Scotland in 2006.

The deal resulted in former chief executive John Parkin and former finance director Lars Friis to be paid £8.5m in bonuses between them simply for organising the refinancing deal.

A spokesman for the LA7 authorities said: "The cabinets of each of the LA7 authorities are meeting on Wednesday October 24 to consider a report outlining the refinancing of Newcastle International Airport, future partnering arrangements and related shareholder matters.

"As the matters being discussed are highly commercially sensitive and disclosure of those details could prejudice the refinancing and new partnership processes, each of the cabinets will consider the report in confidential session."