Revealed: Swedish firm's £70m Prestwick Airport development plan rejected by Scottish Government

The company chosen to buy Prestwick Airport before its bid was rejected by ministers is a Swedish freight firm off-shoot that planned to spend £70 million developing the site with new rail links and hangars, The Scotsman can reveal.

Train Alliance UK (TAUK) was selected as the preferred bidder for the South Ayrshire airport, but its undisclosed initial offer was rejected last April, according to a source with knowledge of the sale process.

The subsidiary of Train Alliance Sweden subsequently lodged a lower bid last summer, believed to be less than £10m, after discovering the runway and other infrastructure were in a poorer state than it had been led to believe.

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In July, the jet blast from a Boeing 747 freighter tore chunks from the surface as it was preparing to take off.

Prestwick Airport has been owned by the Scottish Government since 2013

The source said it was unclear why TAUK’s initial offer was rejected, while the company did not receive a response to its second offer.

A concern may have been the repayment of Scottish Government loans totalling £43m – reported to have reached £50m with interest – which was not included in the offers.

They were provided to keep the airport going after it was bought by ministers for a nominal £1 in 2013 to avert collapse and the loss of hundreds of jobs.

TAUK had argued the money would be returned indirectly through its investment boosting the local economy.

The source said: “The bid was rejected at the end of April for reason(s) which are still unclear.”

TAUK planned to develop freight with a new rail link to the south east of the airport.

Additional hangars and a new business park beside the secondary runway would have included large-scale facilities for aviation training and aircraft maintenance, repair and overhaul (MRO).

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The source said: “There was a significant investment plan of around £70m, which would have effectively created a business park with its own runway.

"Passenger flights would have continued for a minimum of five years.

“If they made commercial sense, it would have been supported.

"However, the strength of Prestwick lies in specialist operations such as freight, MRO, military support and other engineering.

“TAUK would have committed to maintaining the airport operating as such for a minimum of 20 years, so regardless of the ongoing position regarding the loan, the Scottish Government would, over the course of future years, have recouped the investment in Prestwick many times over from taxes and benefits to local and regional supply chains.”

TAUK said it was unable to comment.

Transport Scotland declined to comment on the sale process.

Finance secretary Kate Forbes told MSPs last month the Scottish Government, “having carefully considered bids received”, had decided “not to proceed with a sale”, but still intended to return the airport to the private sector “at the appropriate time and opportunity".

Scottish Conservatives transport spokesperson Graham Simpson said: “The Scottish Government needs to come clean on why it has rejected two bids which would have taken Prestwick Airport off their books – something they say they want to achieve.”

South Scotland Labour MSP Colin Smyth said: “It’s time for an end to the secrecy from Government ministers. They have serious questions to answer over why yet another bid for the airport has collapsed on their watch after months of failed negotiations.”

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