Budget Transfer: Jersey Airport: Cute (Common User Terminal Equipment) System Upgrade

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A decision made 11 May 2015:

Decision Reference: MD-TR-2015-0055
Decision Summary Title:	Budget Transfer from Jersey Airport Minor Capital Assets to CUTE.		Date of Decision Summary:	18 March 2015
Decision Summary Author:	Head of Decision Support		Decision Summary: Public or Exempt?	Public
Type of Report: Oral or Written?	Written		Person Giving Oral Report:	N/A
Written Report Title:	Budget Transfer from Jersey Airport Minor Capital Assets to CUTE.		Date of Written Report:	18 March 2015
Written Report Author:	Head of Decision Support		Written Report : Public or Exempt?	Public
Subject: Non-recurring budget transfer of £78,000.00 from Jersey Airport Minor Capital Assets to CUTE (Common User Terminal Equipment) for the CUTE system upgrade.
Decision(s): The Treasurer approved a non-recurring budget transfer of £78,000.00 from Minor Capital Assets to CUTE for the Common User Terminal Equipment system upgrade.
Reason(s) for Decision: Regulation 22 (2)(b) of the Public Finance (Transitional Provisions) (No.2) (Jersey) Regulations 2005 states that Money standing to the credit of the trading fund of a States trading operation may also be used, with the approval of the Minister, for a capital project of the trading operation if – the project arises from a contingency that could not have been reasonably foreseen at the time the estimates of the States trading operation were submitted to the Minister in accordance with Article 8 of the 2005 Law for inclusion as part of an annual business plan.
Resource Implications: Minor Capital Assets to decrease by £78,000.00 in 2015 and the CUTE head of expenditure to increase by an identical amount.
Action required: Head of Decision Support to notify the Finance Manager – Corporate Group, Group Financial Controller and the Head of Financial Performance Reporting that this decision has been approved.
Signature:		Position: Senator A J H Maclean, Minister for Treasury and Resources
Date Signed:		Date of Decision:

Budget Transfer: Jersey Airport: Cute (Common User Terminal Equipment) System Upgrade

Treasury and Resources

Ministerial Decision Report

TRANSFER OF BUDGET FROM Jersey Airport MINOR capital assetts TO CUTE

Purpose of Report

To enable the Minister to approve a non-recurring budget transfer of £78,000.00 from Jersey Airport Minor Capital Assets to Common User Terminal Equipment (CUTE) in order that the CUTE system upgrade can be classified as an asset.

Background to this Decision

The current CUTE system has come to the end of its original service life, 5 years. A decision needs to be made about the future provision of this service that delivers a common interface for the airline departure control systems for the management of departing passengers.

The Ports of Jersey (PoJ) are reviewing the operational requirements across the organisation as part of a master planning project which could have an impact on the building layout. The Commercial team is also looking at the check in operation and other facilities to improve the future service delivery for passengers. Extending the life of the system for another 3 years would give time to conclude these reviews and procure a replacement system to meet the future needs of the Airport.

Currently the Long Term Capital Programme (LTCP) budget for the replacement of the CUTE system is due to become available in 2017, which coincides with the life of the system if it is extended for another 3 years.

If the system is replaced next year the funds would need to be brought forward in the capital programme and, given that the reviews are unlikely to be completed for a number of months yet, there is limited time to decide on a replacement and get it implemented before the summer season of 2015.

The current version of software will not be supported beyond the middle of 2015 and it will not be possible to get it updated to work with the airline Departure Control Systems (DCS) after this time. As the airline companies update their systems in line with their future passenger handling strategies it will not be possible to alter the current CUTE system to remain compatible and compliant. The system will become obsolete.

There will also be no manufacturer/supplier support beyond 2015, therefore the full risk for failure and repair falls to the PoJ.

The CUTE system provides a common platform to manage departing passengers. Without this facility airlines would need to introduce their own systems at the check in desks and departure gates or use manual processes. If the airlines were to install their own systems there would need to be duplicate installs for each airline at common use check in desks and gates, which would reduce the flexibility of the current facilities at the Airport. Delays in processing passengers would cause delays to their departure or would require that passengers arrive for their flights much earlier than they do presently to allow extra time for processing. Flight delays would have a negative impact on the Airport’s reputation and could bring political criticism.

3. Recommendation

The Minister is recommended to approve a non-recurring budget transfer of £78,000.00 from Jersey Airport Minor Capital Assets to Common User Terminal Equipment (CUTE) in order that the system upgrade can be classified as an asset.

4. Reason(s) for Decision

Regulation 22 (2)(b) of the Public Finance (Transitional Provisions) (No.2) (Jersey) Regulations 2005 states that Money standing to the credit of the trading fund of a States trading operation may also be used, with the approval of the Minister, for a capital project of the trading operation if – the project arises from a contingency that could not have been reasonably foreseen at the time the estimates of the States trading operation were submitted to the Minister in accordance with Article 8 of the 2005 Law for inclusion as part of an annual business plan.

Resource Implications

CUTE to increase by £78,000.00 in 2015 and Minor Capital Assets to decrease by an identical amount. This decision does not change the total amount of expenditure approved by the States in the Medium Term Financial Plan 2013 to 2015.

Report author : Decision Support Officer	Document date : 30th April 2015
Quality Assurance / Review : Head of Decision Support	File name and path: L:\Treasury\Sections\Corporate Finance\Treasurer Delegated Decisions\TR-2015-DD028 - CUTE system Tfr budget from minor to major capital - PoJ