Cardiff Airport: 'Heated meeting' on purchase price

A senior civil servant has admitted having a "heated meeting" with the Welsh government team negotiating the price to buy Cardiff airport.

James Price, the top-ranking official on the economy, said the government acted reasonably when it put in offers.

He told AMs that the airport's previous Spanish owners Abertis wanted £200m for it, when the government thought it was initially worth £35m.

The airport was eventually bought for £52m in 2013.

Mr Price, deputy permanent secretary on the economy, told AMs the £35m was based on an in-house valuation of the airport's assets and did not take into account potential profits.

"In all honesty I do not believe we damaged our negotiating position by quoting prices," he said in his evidence to the public accounts committee on Thursday.

"When we were quoting thirty-five [million pounds] they were quoting two hundred, so we were miles out.

"I think probably at that stage both sides told the other to 'get lost', really."

Accountants KPMG were asked to give a valuation and suggested a range of between £25m and £35m, but with a higher valuation possible if the airport performed well.

In December 2012, the Welsh government's negotiating team made a non-binding offer of up to £55m, which Mr Price said he challenged in "frankly quite a heated meeting" with the team.

"The conclusion was it was a reasonable and a fair thing to do on the basis that Abertis wouldn't come to the table to even discuss it without doing that," he said.

Mr Price said the government's best guess of what the company paid for the airport was between £120m and £150m.

He said Abertis was "running it like a car park", by trying to make as much money as possible from the landing fees it charged airlines to use it.

The Conservatives have accused Labour ministers of paying too much for the airport.

But the Welsh government has said a later valuation of £472m - which takes into account the airport's wider value to the economy - justified the price it paid.