Manchester Airport Group should be sold for £33bn in order to pay for the radical transport improvement that the Manchester local authorities claim will give the city region a competitive advantage.
Such an investment would rule out any need for a road charging scheme, which is central to a bid to central government for more funds for transport.The claim comes from Peel Holdings, the influential property and transport company. The company has stepped up its criticism of the proposal by the Association of Greater Manchester Authorities to pursue a grant of between £31bn and £33bn from the government's Transport Innovation Fund (TIF) to bankroll improvements to the city's public transport and the implementation of a congestion charging scheme.
Andrew Simpson, managing director of Peel Holdings, has told Insider: "We agree that public transport needs to be improved, but disagree with the proposals. The sale of the MAG by AGMA provides a legitimate alternative solution to road user charging.
"It is wrong that AGMA should be investing in the airports and economies of Bournemouth, Hull and Derby at the same time as playing Russian roulette with the Greater Manchester regional economy by pioneering road user charging across the region."
The complete ownership of MAG by local authorities is something of an anathema: in recent years, Liverpool, Birmingham and Glasgow have sold off stakes in their airports, while the underperforming Leeds Bradford was sold in April 2007 to private equity firm Bridgepoint for £3145.5m. It is thought that MAG would fetch between £32bn and £33bn.
MAG has always flatly refused to consider selling off any or all of the group's assets. In February 2007, group managing director Geoff Muirhead told Insider: "This is not on the agenda at all. MAG is an acquirer, operator and developer of airports, not a disposer. We are not looking to sell any of the group's airports."
Sir Howard Bernstein, chief executive of Manchester City Council, told Insider: "This is not on the agenda at all. There is no need to pursue this option."
But Simpson claims that the values realised in recent deals by airports much smaller and less successful than Manchester Airport makes this an ideal time to sell.
"There has never been a better time to sell this asset as prices are at an all-time high. I do not know of another local authority which retains total ownership of a major airport in its own patch, let alone several in other peoples. Leeds, Exeter and others have just sold their airport interests for record prices.
"AGMA should do the same and use the money from one transport asset to invest in another - ie the Greater Manchester region's public transport network for the benefit of local people."
But Manchester City Council remains firm in its conviction that congestion charging has to be tackled by regional cities and that the best chance of winning funding is now - TIF bids have to be submitted before the end of July 2007.
Bernstein, the council's chief executive, said: "If Manchester is to make an economic step change then we have to upgrade public transport infrastructure and improve the roads. We can't access the money the government is offering without tackling congestion.
"This is the first part of a rolling programme to help us move to another level. The London style of blanket congestion charging is a blunt instrument. What we're doing is linking the plan for road charging directly with a bid for more investment on a massive scale."
Although opponents say that in the short-term new Prime Minister Gordon Brown is unlikely to introduce something as controversial as congestion charging - and that pioneering a scheme could be very damaging indeed if rivals like Liverpool and Leeds remain free to access - Bernstein says that in the longer term there is simply no option.
"Successful cities all over the world are anticipating the need to do something about increased congestion. If we don't tackle this now, then it will start to bite us. We're anticipating these charges and seeing if we can make a convergence between national and local priorities. There is a need for a road charging scheme to regulate and change the behaviour of drivers."
Although Peel is unhappy with the robustness of the independent panel's examination of AGMA's plans and the lack of guarantees over the scheme's details, AGMA has the support of several key names within Manchester's property industry.
Also in: July 2007
-
Empire builders
Peel Holdings just keeps getting bigger and bigger. Neil Tague gets his head around the powerhouse that is Peel and speaks to managing director Andrew Simpson to ask: "Where next?"
-
Money makes the world go round
The thorny topic of congestion charging is dividing the boroughs of Greater Manchester, with some seeing the benefits and others voting against it, fearing the worst. Clarissa Satchell examines who in the business community stands to gain and who stands to lose.