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TasPorts – Devonport Airport


Cassy O'Connor MP

Cassy O'Connor MP  -  Tuesday, 8 December 2020

Tags: TasPorts, Devonport, China, Privatisation

Ms O'CONNOR - Still on Devonport airport. About two years ago there were news reports of a potential flight school and partnership with Chinese state-owned airlines. Is there still going to be a flight school at Devonport Airport?

Mr DONALD - We have no discussions with any flight schools associated with Devonport Airport. We have an Airport Master Plan for Devonport However, as a result of COVID 19 we are taking the opportunity to see how our great customer in Qantas returns to service. We may take an opportunity to revise that master plan. There is an area within the land use associated with aviation related businesses. Certainly, a flight school would fit within that definition, however, we are not actively pursuing a flight school.

Mr BRADFORD - There have been no serious discussions with any party. You might recall, there was speculation in the press about the proposition of Qantas having a flight training school. That didn't specifically involve Devonport Airport, but there are lots of parties involved in that.

Ms O'CONNOR - Did TasPorts have any negotiations or discussions with International Aviation Alliance Proprietary Limited, or any of its representatives? That is the entity which is moving on the nearly identical flight school at Mildura, and the founder of which is accused of stealing millions of dollars in mainland China.

Mr DONALD - No.

Mr BRADFORD - I have never heard of them, so the Board hasn't discussed it. Whether somebody has met people and talked about the use of Devonport Airport, that is always possible.

Ms O'CONNOR -It made a splash in The Advocate newspaper at least, probably about 18 months to two years ago. At the time, there was no statement from Government to indicate that they weren't interested in a flight school or a partnership with a state-owned airline from mainland China. Can we just confirm? Is it just because of COVID 19 that there are no longer any talks about a flight school at Devonport Airport?

Mr DONALD - No, it is as a result of COVID 19 that we haven't released our Airport Master Plan. The growth or our objectives around Devonport Airport are to service the community with regular flights. A challenge to that would be the introduction of a flight school in Devonport.

Mr BRADFORD - The Devonport Airport master plan is virtually complete but it was felt that to release it when there are no flights, would be a bit odd.

So, QantasLink has returned, thankfully, and we are hoping for expansion of the number of flights. In the fullness of time, we will release the master plan. It strengthens the growth of a very important north-west regional airport.

Ms O'CONNOR - Can I make one point before we move on, just so it is really clear. My understanding is that the Office of the Co-ordinator General was involved in negotiations about a flight school potentially at Devonport Airport, and a partnership with Chinese state-owned airlines. Do you have no knowledge of that?

Mr FERGUSON - Of course I do. At this scrutiny hearing, I am not expected nor planning to talk about things in my State Growth portfolio.

Ms O'CONNOR - But it is associated with TasPorts infrastructure.

Mr FERGUSON - I am hearing the question, and I am immediately thinking of those other things that OCG certainly have been involved with. I am not evading the question. It is just that it is not applicable for this hearing. I am more than comfortable -

Ms O'CONNOR - It is. You can argue that it is not, but it is, because the Co-ordinator General is negotiating over Devonport Airport.

CHAIR - Please allow the minister to answer the question.

Ms O'CONNOR - But it is. You can't say that.

Mr FERGUSON - Let me answer, but at the same time it is no secret that OCG has been doing that work.

Ms O'CONNOR - Has it stopped?

Mr FERGUSON - I am not aware of the current status of that given the crash that has occurred in aviation around the world. I am not aware of any current work that is happening in that space, but nor is it a secret that OCG has been involved in those negotiations.

Ms O'CONNOR - That's right.

Mr FERGUSON - I encourage it to continue.

Ms O'CONNOR - You would not mind having Devonport Airport privatised to a state-owned company.

Mr FERGUSON - I certainly reject that comment. It is a simple fact, I am trying to be helpful to the committee without being drawn down a Budget Estimates style of questioning by Ms O'Connor.

Ms O'CONNOR - It is a legitimate question in the public interest.

 

Ms O'CONNOR - Minister, earlier you said the negotiations that happened with the Office of the Coordinator-General about the future of Devonport Airport were not germane to this hearing, and I am paraphrasing you, but that is actually not true because Devonport Airport is a TasPorts asset and we have a quote from the state Government last year which said:

The discussions so far have indicated the potential to train both international and domestic pilots at the school. A state government spokesperson said, 'The Office of the Coordinator-General has had discussions with possible flight schools regarding the potential for operating from Devonport Airport. It is too early to speculate at the outcome or potential jobs and investment, however the Government is of a strong view that a pilot academy in Devonport would have a significant positive impact on jobs, investment and activity in the region.

Minister, have the negotiations over the potential use of Devonport Airport as a flight school ceased, or have they been suspended?

Mr FERGUSON - I don't know the answer to that. I don't believe that they've ceased. I believe that what's occurred since my last substantial update on that task that the Office of Coordinator-General has been handling is a very exciting investment opportunity for our state. It would mean jobs in our state.

Ms O'CONNOR - The Devonport flight school, potential?

Mr FERGUSON - Indeed potential and -

Ms O'CONNOR - Notwithstanding what has been said by Mr Donald?

Mr FERGUSON - Yes, and potentially other locations as well. I am not aware of any new status on that, but it effectively went into suspension because of the pandemic and the great uncertainty that has been brought into the airline industry globally. I don't believe there's any current work on that, nor do I believe that it's been deliberately ceased. I think it's a consequence of the fact that the airline industry is having to pick itself up again and rebuild.

As to where this leads I don't have a current brief on that. As far as TasPorts is concerned there are no proposals before TasPorts that I'm aware of in relation to that.

Ms O'CONNOR - Is it still the Government's plan, though, to have a flight school at Devonport Airport?

Mr FERGUSON - It is not necessarily our plan but it is an exciting opportunity that has presented itself. We look to the Office of Coordinator-General for our investment attraction strategy to be put into place and to engage with potential investors. We would love to see an international flight school in Tasmania. That would be a great outcome. For now, the enthusiasm would need to be curbed because I am not aware of any current energy that's going into that project. The airline industry is a fraction of what it was only one year ago and people have not been able to travel in or out of the country.

Ms O'CONNOR - Given that the airport is the property of TasPorts and given what Mr Donald said earlier about the primary purpose of Devonport Airport, it seems that the Government still would like to see an international flight school at Devonport Airport. Does the Office of the Coordinator-General, when looking at proposals like this, do due diligence on companies that come forward? Regarding one of the main people involved in the flight school, there's an ABC news report here where there's a question mark over potential embezzlement of about $100 million from a bank on mainland China.

Mr FERGUSON - I agree with you that due diligence would and does need to occur whenever we're looking at potential investment opportunities for our state.

Ms O'CONNOR - Sovereign interests, too, potentially.

 

Ms O'CONNOR - Is it usual for a government GBE whose assets might be subject to negotiations with the Office of the Coordinator-General not to be aware of those negotiations?

Mr FERGUSON - I would be happy for Mr Donald as the CEO to speak further on the matter. I am also happy to speak further on the matter regarding the basic principle here as to whether this particular owner of the asset is aware of or even intimately involved in. The role of the Office of the Coordinator-General is to invite investment into the state. It doesn't mean that he has a bulldozer to go with it. It means that he is able to negotiate with government - even at times engage with GBEs - to discuss proposals. If it hasn't come before the organisation that simply means it hasn't matured to the point where that would even be appropriate.

Ms O'CONNOR - That is interesting though because he is essentially a public servant who operates outside a lot of the transparency provisions that usually apply to the public service. He is negotiating with a representative of a foreign company over a state asset - a TasPorts asset - and it's not clear to us that TasPorts even knew there were negotiations about this asset and potential trading in Devonport airport space.

Mr BRADFORD - I wouldn't go as so far as to saying 'negotiating'. The Office of the Coordinator-General as I see it in relation to the board and TasPorts is that they seek expressions of interest, and excite parties about opportunities to develop business and economic growth in Tasmania. A specific proposal involving us - a TasPorts asset - is considered by management specifically and put to the board for approval. Lots of people can talk about a lot of things and a flight training school - I guess there's four possible airports, probably five in Tasmania, where you could do it. We would consider the nature of the operation; how they would grow their business; their financial stability; and everything related to the governance; and nothing has come before the board.

Mr FERGUSON - I emphasise the point that has been made in a very articulate fashion and that is that I am aware of the OCG's work in this area, I am supportive of it.

Ms O'CONNOR - Do you have any control over it at all?

Mr FERGUSON - I certainly reject the automatic assumption that I believe was offered about 15 minutes ago that it's about selling Devonport - because that is not a proposal. There are also other locations around Tasmania that potentially maybe involved and I encourage the Coordinator-General to explore possibilities. However, nobody should pre-empt or make assumptions about where that leads. Ultimately, it has to be in the state's interest before we would even invite it to be taken to one of the GBEs for consideration.

Mr DONALD - Chair, if I may, it might be helpful to add the committee should take some comfort that the Coordinator-General and I catch up on particular matters. Consistent with comments by the chairman and the minister, the Coordinator- General has a particular role, and I have a particular role. I am aware of some of the discussions that his office has been having and -

Ms O'Connor - You are in the top 0.01 per cent of all Tasmanians who know what happens in that office.

CHAIR - Ms O'Connor, I ask that you stop interjecting.

Mr DONALD - As you are suggesting, I think it's important that the committee knows that the Coordinator-General is not having discussions with proponents without having communication with me.

Ms O'CONNOR - That was the nub of the question really. You are just one-person, Mr Anthony, with respect. So, we can deduce from that statement the CEO was aware that the Office of the Coordinator-General was having discussions about a potential flight school at a TasPorts asset. You were aware of those discussions at least as early as March last year.

Mr DONALD - I'm not sure if it was as early as that; but I have been for quite a period of time.

Ms O'CONNOR - The media reported in March last year. You would have been aware of those discussions before the media reports.

Mr DONALD - Yes.

Mr FERGUSON - I am going to break my usual rule. I have brought my State Growth brief to the committee.

Ms O'CONNOR - You have set a precedent now.

Mr FERGUSON - I am breaching it momentarily, because it's not right to explore minister's outputs outside of the GBE scrutiny process. However, because this will assist I think in answering the question in a fair, honest and robust way, I would like to share with the committee as follows.

The Government remains highly active in its pursuit of attracting a significant pilot school operator to the state. Tasmania offers a compelling and unique mix of attributes to attract flight training activities, hence my earlier answer about why we see that as a positive. A flight school with the potential to train both international and domestic pilots would bring a host of community and economic benefits to its region, including increased activity, jobs and investment.

One such opportunity is with a proponent who is working on a new offering for pilot training out of northern Tasmania, which would include an initial two years study based in Launceston as part of a bachelor degree program and the student pilots undertaking their practical pilot training at relevant airfields including Devonport Airport. The program would be a collaboration with the university to train international and Australian pilots. This pilot academy, if realised, would see students living, learning and developing their aviation careers in our region, providing more vibrancy and flow-on benefits through the presence of students and flight school staff along with their families.

Of course it adds to the international education opportunity the state has been successfully pursuing -

Ms O'CONNOR - Can I just briefly interrupt you there? You said you would partner with the university. Is that the only partnership that's involved in that proposal, or did you auto-edit? Did you leave out a company or an entity?

Mr FERGUSON - Look, I'm just answering the question as best I can, Ms O'Connor. I'm not sure what you're getting at so I won't entertain it. I will continue.

There have been recent concerns raised in the media regarding the financial status and activities of a particular flight training operator with links to China. The Government always takes such allegations seriously and is investigating to see if there are any learnings or issues for the projects currently being pursued. The discussions the Government has been having with the proponent for the Tasmanian project are still exploratory and at a relatively early stage. The Government will make further statements regarding these proposals should they advance sufficiently.

Ms O'CONNOR - You might talk to TasPorts too.

Mr FERGUSON - Should that be necessary. As I indicated earlier, it is very preliminary and wouldn't be engaging with the GBE unless it had advanced to that stage of maturity.