Mr. Pádraig Ó Ríordáin:

That is quite a menu. I will start at the beginning. I agree entirely with what the Acting Chairman said about the potential for the new runway and the opportunity for connectivity and everything that it will give. Equally, I agree with what he said about every effort being made in that respect. In implementing the new runway, we will make every effort to ensure the impact of that on our community and neighbours in the Dublin area is ameliorated, as the Acting Chairman said, in terms of offers of house purchases and insulation where it is appropriate. We will do all of that. That is very much a central part of our thinking. I can confirm that to the Acting Chairman.

On the issue of noise regulation as we go forward, the Acting Chairman is correct in that under the new directive, there will be an active noise regulator in Dublin Airport as there will be across Europe, which will be helpful. The daa at all stages will comply with whatever those regulations are. These are imposed on an airport by external bodies and we will always adhere to those to the letter.

The initial cost €260 million for the new runway comes from the last regulatory round. That was a paper exercise essentially where we examined what it would cost to build a new runway. If we compare that figure with the current estimate, which is only an estimate, of €320 million, we are not comparing apples with apples. It is more a comparison of apples with oranges in so far as the €320 million estimate is much more inclusive of all the other work around the runway that would have to be done, such as taxiways, aprons, fire houses and all those types of facilities, which were not necessarily included in the original amount. In addition, there is cost inflation and another factor which I had not thought of, namely, that a busy airfield is a difficult place to work from the point of view of security and everything else. The busier the airport, the more expensive it is to do work in it. There are those types of pressures that are building in respect of it. Both the €260 million and the €320 million figures are still only desktop numbers. The runway will be built and, ultimately, we will get the lowest possible price we can to build it through procurement in the same way as any commercial company would. We will make sure that the costs in respect of it are kept to the minimum but, ultimately, to get there, we have to procure all the elements of it individually. Until that is done, we will not know what the final price is.

The Acting Chairman is right in that the contrast with the cost of building a new runway at Heathrow Airport would be a dramatic one. The reason it would be so expensive at Heathrow Airport comes down to the land issue in that land would have to be purchased.

With respect to our terminals, a good deal of our congestion interestingly is more on the air side - in other words, it is more in regard to the runway, the taxiways and the parking stands for aircraft as opposed to only the terminal accommodation. We are providing more gates and we are building more stands where aircraft can overnight because it is very positive to have aircraft come in and overnight in Dublin and from that base, leave early the next morning and come back. We are providing parking stands and remote stands. We have very little busing by international standards, so we are putting in buses to accommodate passengers as well. What we are doing in as thoughtful and as a forward-looking a way as we possibly can is taking account of the airport as it is and asking how can we optimise it currently in terms of the huge increase in passenger numbers that we have experienced in recent years in order to keep the entire engine working.

Those are the initiatives being taken with respect to those elements and infrastructure to meet the current demand prior to the second runway being built.

The Acting Chairman is right in that there is much more automation with the check-in process and that has gone very well. It has taken some of the pressure off the terminal building but currently, the pressure and the constraints are on the air side part of the infrastructure, on which we are greatly focused.

The Acting Chairman asked about the existing board and the combination of its members. It is a very good and open board. We voice concerns, have discussions and conclude matters. It is essentially the same board as 18 months ago with one exception. The term of one of the non-executive directors has expired and she has to be considered in terms of re-appointment or otherwise. The point regarding the board is apposite in that the mix of people on a State board is important in terms of getting the right mix of skills and the right judgment coming from the board.

Preclearance in Dublin Airport is core to the authority. It is a huge advantage to us. The gateway potential for Dublin Airport between Europe and the United States is very promising and customs and border protection, CBP, is a significant part of that. At various times we have had resource constraints, which the Acting Chairman mentioned, but this summer we have not had those. A year or 18 months ago we were in active dialogue, and we continue to engage in active dialogue, with Homeland Protection in the United States on the resources that are necessary for CBP here. Our ambition, and this is currently the case, is that every flight to the United States is covered by CBP. Once we go below those resources when people plan trips they are not sure whether they will get the advantage of CBP and that doubt dissipates a considerable degree of that advantage. It is important that we continue to have the resources we have. We are actively engaged at all stages with Homeland Security in the United States. We cannot pay for any of that because it is a security issue from the US perspective. It is a question of making sure we are speaking to the right people and that they understand what we are trying to plan for and our ambitions in regard to CBP. That is an ongoing dialogue. With the level of growth we have, undoubtedly we will need more resources in that area.

With respect to national aviation policy, the regional airports have a role to play. It is difficult for me to comment unduly on that, as that is very much a matter of national policy. From an international perspective, there are many more airports in Ireland than one would expect, having regard to our geographic area. Airports in Europe are much more dispersed. The general rule of thumb is that for the normal economic footprint - the length of time people will drive to get to a major airport - is an hour and three quarters or two hours of travel time. With have quite a few more airports than one would expect based on that rule of thumb.

Ultimately, the airlines delivering people make decisions to their economic or commercial advantage, which they should. Ultimately also, market forces will dictate where they land, where they deposit passengers and from where passengers are coming. The issue with respect to regional airports is probably more of a national policy issue.

On the issue of the proposed air route by Norwegian Air operating out of Cork, the more diplomatic efforts to address this the better. From a diplomatic or political perspective, we would very much encourage that and the more intervention and dialogue at that level, the better. Ultimately, that is possibly the only thing that will move this on and get it done within a reasonable timeframe. The Acting Chairman is right on that and we would very much encourage such an approach.

The Acting Chairman said I was not complimentary of the regulatory system. I am not. There are a few issues involved. With any regulatory system it depends on what problem the system is designed to address. The regulatory system currently in operation was designed 15 years ago.

When it was designed, Dublin Airport was a monopoly provider of airport facilities in Dublin. There were many smaller airlines and there was an imbalance between the two, but this has changed massively in the 15 years since, as have the competitive dynamics. Our two major customers are among the most successful and competitive airlines in the world. They are wonderful customers and we value them enormously. They are very sophisticated and well able to compete. The daa does not price to our cap. Commercially, we decide to price below it. This is not the behaviour of somebody with a competitive axe to wield. It is commercially rational behaviour with very competitive airline partners.

The competitive dynamic has changed enormously and other airports in Ireland could compete with us very strongly. Two are located only 100 km away in Belfast which, in airport terms, is close by. In analysing the daa's competitive position the Indecon report which was recently prepared made no reference to either of them. I do not believe they were included within its terms of reference. It is not so much that I am not complimentary about the regulatory system; all of those involved in the system are doing the job they were asked to do and in the way the regulatory system was designed, but what is wrong is that the system was designed to solve what is the wrong problem at this stage.

The regulatory system is inhibiting two major issues which will still be issues long after I have left the board and which are very important for Ireland. They are the long-term strategic element of the airport from an Irish and an economic development centric perspective and the return to the State. As we become more efficient, the regulator will come in and take these efficiencies into account and give the benefit to the airlines. That is how the system was designed. This means, for example, that we can give far lower dividends to the State. For me, a commercial company should remunerate its shareholder which, in our case, is the State. The State has a lot of capital tied up in companies such as the daa. These are the issues which are not properly addressed in the regulatory framework and the review presents an opportunity to get some of this right.

I agree that the issue of security is front and central. It is very difficult to predict events such as what happened in Nice and it is very troubling, but we are very focused on the issue. Four years ago we had an Article 50 issue, which meant that Dublin Airport had failed to meet European security protocols. In the four years since we have taken on the problem. Some of the issues had been evident for a number of years. We have radically improved the position and turned it on its head, to the extent that security is now very good. We brought in Mick Feehan, the head of the section with this function in the daa. He is a former Garda assistant commissioner and it is job to run it. We are very thoughtful in how we provide security and about the types of threat faced, but, as the Deputy said, it is difficult to prevent everything. The topic is present at board level.

I raised the issue of the remuneration of the CEO because I am chairman of a semi-State body and it is part of my job to bring to policy makers the real risks faced in the system. I agree entirely that in recent years it has been very difficult for people who have taken pay cuts. I can only speak for the daa, but when we look at what we pay chief executives in State companies generally and particularly people of Mr. Toland's ability, the difference between what he is paid and what he would be paid if he were to lift the telephone and go back to the private sector is an absolutely yawning gap. I do not state what we need to do is to close the gap entirely, but we should make movements to secure people such as Mr. Toland who do these jobs for exactly the right reasons and make an enormous impact.

It is hard to calibrate the level of value that Mr. Toland has brought to Ireland as a whole when we consider passenger growth and how the airports now function. This has a huge knock-on value for Ireland as a whole. If the daa were an unrestrained commercial company, we would absolutely be paying him more because it is a central risk to us that we lose somebody of his calibre and it would be a dreadful pity if it happened.

The Deputy asked me to be specific. At the time Mr. Toland came in, in 2012 or 2013, it was intended there would be a performance-related pay element for chief executives of State companies but this never happened. When he came, in he was on a fixed sum and he is still on the same fixed sum without any performance-related pay, although it was indicated at the time and there was an expectation this element of pay would come in. In addition, chief executives of State companies do not have any participation in equity as they do in private companies. For example, there are no share plans. While I utterly accept that when we look at the figure, the amount of money is very high in comparison to an average salary, from a business point of view we must compare it with the minimum he would be paid in the private sector and the difference is massive. The country could very quickly lose real generators of value if we do not fix this problem. I have been consistent about this from the very beginning but I raise it is today as the chairman of a State company to point out a risk in the system.