BAA accuses airport panel of 'red-hot' conflict of interest

Published on Monday 19 October 2009 21:03

BAA yesterday hit out at a competition tribunal over an alleged conflict of interest at the heart of a decision to force it to sell its airports at Gatwick, Stansted and either Edinburgh or Glasgow.

Nicholas Green, QC, acting for the airport operator, said one of the regulators on the inquiry panel, Professor Peter Moizer, had links with Manchester Airport Group, one of the companies that are interested in buying Gatwick.

Green told the Competition Commission (CC) appeal tribunal that Moizer was a strategic adviser to the Greater Manchester Pension Fund (GMPF), which is a Manchester airport shareholder and had been considering an equity investment to back a bid.

The CC had failed to address BAA's "very real and very legitimate concerns" that the position represented a stark conflict of interest, he said.

BAA is also appealing on the grounds that the regulator had not made a proper assessment of the negative financial impact of the requirement to sell three airports within a two-year window.

BAA said that the GMPF had not ruled out participating in a bid for the other airports involved in the CC decision if the Gatwick bid was unsuccessful, although the fund had said it was "unlikely".

Green said he accepted Moizer's statements that he had not given any advice to the pension fund about the specific Gatwick bid by a consortium led by Manchester Airport Group.

But he said the indirect links still represented a conflict of interest that was "red-hot".

Green added that Moizer had said he had refused to participate in the GMPF's involvement in any potential bid for Gatwick when he learned of the possibility through newspaper reports.

Manchester airport was seen as one of the two front-runners for Gatwick, but it is believed rival Global Infrastructure Partners has edged ahead and is expected to clinch the deal for about 1.5 billion.

Moizer had been part of the latest CC inquiry into BAA launched in 2007. The commission ordered a sale of three of the group's seven UK airports on 19 March this year. But Green revealed that in 2002 the CC published a "disclosure of interest" between Moizer and a previous BAA competition inquiry.

It concluded then that "Professor Moizer should not participate in any joint meetings of the Manchester and BAA groups, nor in any smaller bilateral group".

Green added that the CC had not addressed the issue sensibly throughout most of January, "when they should have felt the collective hairs on the back of their necks rising".

On 22 January, the CC "quarantined" Moizer from anything to do with the Gatwick bid, and stood him down from the panel on 24 February, Green said.