GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 1 Sustainable Mobility and Intermodality Promoting Competitive and Sustainable Growth GALILEI Galileo Organisational Scenario modelling Written by: Company Date Signature John Dewar, Anne MacPherson Milbank, Tweed, Hadley & McCloy 11/04/03 Kofi Henaku AST Legal Consultancy 30/01/03 David Wright Independent Contractor 30/01/03 James Brighton Astrium 30/01/03 Verified by: John Dewar, Anne MacPherson Milbank, Tweed, Hadley & McCloy 20/06/03 Certified by: WBS Code :I.2 Classification :PU GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 2 THE INFORMATION IN THIS DOCUMENT IS PROVIDED AS IS AND NO GUARANTEE OR WARRANTY IS GIVEN THAT THE INFORMATION IS FIT FOR ANY PURPOSE. THE USER THEREOF USES THE INFORMATION AT ITS SOLE RISK AND LIABILITY. FURTHERMORE, DATA, CONCLUSIONS OR RECOMMENDATIONS IN THIS REPORT ARE PROVIDED ON THE BASIS THAT SUCH INFORMATION IS SUBSEQUENTLY, AND PRIOR TO USE, VERIFIED BY THE PARTY WISHING TO USE THAT INFORMATION. LN1:#20065849 GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 3 CHANGE RECORDS ISSUE DATE § : CHANGE RECORD AUTHOR 1.0 21/02/03 First issue. N. deSilva 2.0 24/07/03 Second issue John Dewar, Anne MacPherson LN1:#20065849 3 GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 4 TABLE OF CONTENTS 1 EXECUTIVE SUMMARY .................................................................................................13 1.1 INSTITUTIONAL STRUCTURES................................................................................................ 14 1.1.1 Form of Public Authority........................................................................................................14 1.1.2 Regulatory functions and independent monitoring bodies................................................14 1.1.3 Ownership structure ...............................................................................................................15 1.1.4 Ownership of Assets ..............................................................................................................15 1.1.5 Security structures .................................................................................................................16 1.2 CONCESSION AGREEMENT .................................................................................................... 16 1.2.1 Revenue Risk – availability payments and sharing of revenues .......................................16 1.2.2 Responsibility for system evolution .....................................................................................17 1.2.3 Service Guarantee and performance measurement............................................................17 1.2.4 Third party liabilities ...............................................................................................................17 1.2.5 Risk management and sharing of risk ..................................................................................17 1.2.6 Relationship between the GOC and the counterparty to the concession.........................18 1.2.7 Remedies in the case of the default of the GOC..................................................................18 1.2.8 Term - Duration of the concession and break mechanisms...............................................18 1.2.9 Selection of PPP candidate....................................................................................................18 1.3 PROCUREMENT: SELECTION OF CONCESSIONAIRE.......................................................... 18 2 INTRODUCTION .............................................................................................................20 3 UK NATIONAL AIR TRAFFIC SERVICES (NATS) .........................................................22 3.1 INTRODUCTION ......................................................................................................................... 22 3.2 THE PPP PROCESS................................................................................................................... 22 3.2.1 Legal basis...............................................................................................................................23 3.3 THE PUBLIC AUTHORITY .........................................................................................................23 3.3.1 The Secretary of State for Transport ....................................................................................23 LN1:#20065849 4 GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 5 3.3.2 Civil Aviation Authority ..........................................................................................................24 3.3.3 HM Treasury.............................................................................................................................25 3.3.4 The Ministry of Defence..........................................................................................................25 3.4 NATS ........................................................................................................................................... 26 3.4.1 Selection of a PPP Candidate ................................................................................................26 3.4.2 Transfer of Assets under the transfer scheme ....................................................................26 3.4.3 The Organisation.....................................................................................................................27 3.4.3.1 National Air Traffic Services Ltd. (NATS)...........................................................................27 3.4.3.2 NATS (En Route) Ltd. (NERL)..............................................................................................28 3.4.3.3 NATS Employee Sharetrust Limited (NESL)......................................................................28 3.4.3.4 NATS (Services) Ltd. (NSL) .................................................................................................28 3.4.3.5 NATSNAV ..............................................................................................................................28 3.5 NATS LICENCE .......................................................................................................................... 29 3.5.1 Services to be provided..........................................................................................................30 3.5.2 Disposal of Assets ..................................................................................................................30 3.5.3 Regulatory Accounting...........................................................................................................30 3.5.4 Performance indicators and Standards of Service..............................................................31 3.5.5 Payment of Fees......................................................................................................................31 3.5.6 Changes in shareholdings .....................................................................................................32 3.5.7 Charge Control ........................................................................................................................32 3.6 LIABILITY.................................................................................................................................... 33 3.7 MONITORING AND ENFORCEMENT........................................................................................ 33 3.7.1 Regulatory Instruments..........................................................................................................34 3.8 CONCLUSION............................................................................................................................. 34 4 NAV CANADA.................................................................................................................36 4.1 INTRODUCTION ......................................................................................................................... 36 4.2 THE PUBLIC AUTHORITY .........................................................................................................36 4.2.1 Ministerial Authority ...............................................................................................................36 LN1:#20065849 5 GALILEI REF : Gali-Mbank-dd121/122 DATE : 24/07/03 Galileo Organisational Scenario modelling ISSUE : 2.0 PAGE: 6 4.2.2 The Canadian Transport Agency...........................................................................................37 4.3 THE CORPORATION.................................................................................................................. 38 4.3.1 Governance..............................................................................................................................38 4.3.2 Ownership and charges .........................................................................................................39 4.3.2.1 Benefits of non-share capital/trust model .........................................................................40 4.3.3 Monitoring................................................................................................................................41