David Learmount/LONDON

The UK's air-traffic-control system made its first steps towards independence on 29 March as the National Air Traffic Service ceased to be a government department and emerged as a limited company.

National Air Traffic Services (NATS) now becomes a wholly owned subsidiary of the UK Civil Aviation Authority, but the move has come under fire for stopping short of full privatisation.

NATS chief executive Derek McLauchlan complains that the compromise leaves the new company unable to raise badly needed finance on the open market.

He says that NATS has seen its share of public investment fall by around £250 million ($380 million) over the past three years, under a development budget which has been cut by one-third. That would have led to a decline in the standard of ATC services around the next century if unchecked, he says.

Instead, NATS is being asked to raise funds through the Government's private finance initiative (PFI) scheme, under which ATC centres and equipment would be owned by private companies, but leased to NATS.

McLauchlan fears that this could lead to fragmented ownership and less control over future development. He also points out that under the previous system, NATS was required to make an 8% profit which was to be reinvested in the system. Under the PFI arrangements, he warns that site landlords could eventually begin to demand higher returns.

McLauchlan says that NATS intends to "...make the best of the PFI" but would much rather have gone direct to the market for finance, following the example of the state-owned German ATC.

The only project so far up for provision under the PFI is the new £200 million Prestwick-based Scottish en route ATC centre (SCATCC) and the co-located Oceanic control centre (OCC). The deadline for bids is set for the end of April and May respectively, but only two bidders have so far emerged. Hughes has combined with UK construction company Laing, while Loral has linked with UK builder Bovis.

Source: Flight International