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| Cardiff Airport purchase wasted millions, Welsh Tories claim | Cardiff Airport purchase wasted millions, Welsh Tories claim |
| (35 minutes later) | |
| Ministers have been accused of wasting tens of millions of pounds buying Cardiff Airport for around double an accountants' valuation of £20m-£30m. | Ministers have been accused of wasting tens of millions of pounds buying Cardiff Airport for around double an accountants' valuation of £20m-£30m. |
| Welsh Tory leader Andrew RT Davies accused Labour of a "stunning failure to safeguard taxpayers' money" in paying £52m for the airport in 2013. | Welsh Tory leader Andrew RT Davies accused Labour of a "stunning failure to safeguard taxpayers' money" in paying £52m for the airport in 2013. |
| The estimate by accountants KPMG is in a report by the Wales Audit Office. | The estimate by accountants KPMG is in a report by the Wales Audit Office. |
| The Welsh government said BBC reports based on those figures were "entirely selective and misleading". | The Welsh government said BBC reports based on those figures were "entirely selective and misleading". |
| The decision to buy Cardiff Airport from its Spanish owners Abertis followed years of concern about its performance and long-term viability. | The decision to buy Cardiff Airport from its Spanish owners Abertis followed years of concern about its performance and long-term viability. |
| Months after KPMG gave its estimate, the Welsh government offered Abertis £41m, increasing the offer to £55m following another valuation from consultants Arup, before agreeing on a sale at £52m. | Months after KPMG gave its estimate, the Welsh government offered Abertis £41m, increasing the offer to £55m following another valuation from consultants Arup, before agreeing on a sale at £52m. |
| First Minister Carwyn Jones defended the deal at the time as a means of securing the airport's future as "a vital gateway to Wales", to be run at arm's length from government. | First Minister Carwyn Jones defended the deal at the time as a means of securing the airport's future as "a vital gateway to Wales", to be run at arm's length from government. |
| Publishing its report on Wednesday, the Wales Audit Office said it acknowledged time constraints but pointed to "some weaknesses" in the preparation of the business case for the deal. | Publishing its report on Wednesday, the Wales Audit Office said it acknowledged time constraints but pointed to "some weaknesses" in the preparation of the business case for the deal. |
| On the purchase price, the watchdog noted that "commercial valuations can vary greatly depending on the assumptions applied". | On the purchase price, the watchdog noted that "commercial valuations can vary greatly depending on the assumptions applied". |
| It said the Welsh government had undertaken a "rigorous" process of due diligence, but it said the airport's need to borrow money was "greater than forecast at the time of acquisition", and that growth had been slower than predicted. | It said the Welsh government had undertaken a "rigorous" process of due diligence, but it said the airport's need to borrow money was "greater than forecast at the time of acquisition", and that growth had been slower than predicted. |
| Auditor General Huw Vaughan Thomas said: "Turning the airport around is proving more challenging than the Welsh government expected at the time of the acquisition, despite some positive developments." | |
| Welsh Tory leader Andrew RT Davies said it was "unforgiveable" for the Welsh government to have paid so much for the airport. | Welsh Tory leader Andrew RT Davies said it was "unforgiveable" for the Welsh government to have paid so much for the airport. |
| "This is yet another example of the Welsh Labour government's stunning failure to safeguard taxpayers' money, with tens of millions of pounds going to waste - despite clear, professional advice which should have told them that the price they were prepared to pay for the airport was over the odds," he said. | "This is yet another example of the Welsh Labour government's stunning failure to safeguard taxpayers' money, with tens of millions of pounds going to waste - despite clear, professional advice which should have told them that the price they were prepared to pay for the airport was over the odds," he said. |
| Welsh Liberal Democrats economy and transport spokesperson Eluned Parrott added: "This is another huge blow to the Labour government's already tattered economic reputation." | Welsh Liberal Democrats economy and transport spokesperson Eluned Parrott added: "This is another huge blow to the Labour government's already tattered economic reputation." |
| 'Public value' | 'Public value' |
| A Welsh government spokesman said reporting of the £20m-£30m valuation was "entirely selective and misleading". | A Welsh government spokesman said reporting of the £20m-£30m valuation was "entirely selective and misleading". |
| "KPMG modelled a range of scenarios during the due diligence process," he said. | "KPMG modelled a range of scenarios during the due diligence process," he said. |
| "The resulting valuations varied greatly depending on the cost of capital applied to the calculations. | "The resulting valuations varied greatly depending on the cost of capital applied to the calculations. |
| "After taking further professional advice including a public asset valuation from Arup, the Welsh government concluded that a valuation of around £55m would be reasonable from a commercial perspective. | "After taking further professional advice including a public asset valuation from Arup, the Welsh government concluded that a valuation of around £55m would be reasonable from a commercial perspective. |
| "The public asset valuation of £472m [taking into account the airport's wider value to the Welsh economy] also justified the price paid on public value for money grounds." | "The public asset valuation of £472m [taking into account the airport's wider value to the Welsh economy] also justified the price paid on public value for money grounds." |
| Analysis by Brian Meechan, BBC Wales business correspondent | Analysis by Brian Meechan, BBC Wales business correspondent |
| The public spending watchdog, the Wales Audit Office, says ministers undertook appropriate due diligence before buying the airport. | The public spending watchdog, the Wales Audit Office, says ministers undertook appropriate due diligence before buying the airport. |
| This means they'd undertaken all the sensible measures expected of people when they take over a company. | This means they'd undertaken all the sensible measures expected of people when they take over a company. |
| Valuations, though, are not straightforward and depend on the assumptions of the buyers. | Valuations, though, are not straightforward and depend on the assumptions of the buyers. |
| The issue is that something is worth what someone is willing to pay for it. | The issue is that something is worth what someone is willing to pay for it. |
| The Welsh government made it clear that it thought the airport was an embarrassment to Wales and it wanted to take it over. | The Welsh government made it clear that it thought the airport was an embarrassment to Wales and it wanted to take it over. |
| It faced a seller who was happy to keep hold of the site. That in itself would push the price up. | It faced a seller who was happy to keep hold of the site. That in itself would push the price up. |
| It's a widely held view in the business community that the Welsh government did overpay for the airport. | It's a widely held view in the business community that the Welsh government did overpay for the airport. |
| However, since it has taken over at Cardiff, it's certainly seen passenger numbers increase and facilities improve. | However, since it has taken over at Cardiff, it's certainly seen passenger numbers increase and facilities improve. |