Tees Valley Combined Authority is being asked to commit £75m to the purchase of an airport, the business case has revealed.
The authority’s newly-published plans showed that a loan of £20m will be required to cover operating losses and up to £15m will be required to improve and expand Durham Tees Valley Airport, on top of the £40m purchase price.
Its business case suggested that the airport would be redeveloped into a garden village if the airport was not a success.
Conservative Tees Valley Mayor Ben Houchen is asking the five Labour leaders to vote in favour of the purchase next week.
Hartlepool leader Cllr Christopher Akers-Belcher is reported to be in favour, the only one to have made a public commitment either way.
Peel Group, the current majority owners of the airport, are likely to close the airport after 2021, having failed to extract a profit since 2003 as annual passenger numbers fell to 130,000 in 2017, down from 900,000 in 2006.
BMI Baby, Ryanair, Thomson and First Choice no longer operate or charter flights from the airport, leaving KLM and Eastern as the only airlines left.
However, the business case outlines how profit could be achieved after six years if a low-cost operator could be attracted to the airport, operated by a third party under a joint venture agreement with the combined authority.
It also calculated that the loss of the airport would cost the local economy £32m.
Although the business case admitted that risks were 'significant’. the report added: ‘The acquisition offers a pragmatic approach to the future ownership and operation of the airport and provides the combined authority with the opportunity to deliver a much stronger growth prospectus than is possible under the current ownership.’
This article first appeared on themj.co.uk,