Mr. Ronan Gallagher:

I will touch on the risks and threats presented by reducing capped charges. To help the committee understand the regulatory process, the mechanics of which will not change under this proposal, the DAA and the airlines make substantive submissions to the CAR on their five-year or medium-term development plans and their forecasts for passenger growth. The regulator takes account of the existing capital stock, what it takes to maintain that stock, and the DAA's returns on it. It also takes account of depreciation. It estimates future operating expenditures and what an efficient operation would look like. It then subtracts the commercial revenues the DAA can make from car parking, retail and so on. This, combined with passenger forecasts, gives the CAR a basis for determining a reasonable revenue and income stream to allow the DAA to provide facilities for the identified passenger growth into the future. It determines this for a period of five years but, if things happen in between that run counter to some of those assumptions, it can go back and look at it afresh.

The points of disagreement between the regulator and the regulated company centre, as these things do, around the margins, that is to say, around how much the company believes it needs to grow and how much the regulator does. That kind of tension is a good thing. In a way, the whole point is to replicate competition. There is no doubt but that the CAR's job is to put downward pressure on the DAA's costs. That is what it is trying to do but, at the same time, it is statutorily required to make sure that the airport succeeds. Over the period of all the determinations the CAR has made, the cap has fluctuated. It has been as high as more than €11 in 2010 and has been as low as €5.50 in 2005. It varies depending on the airport's capital projects and on what passenger growth is set to be. There is no risk of the CAR having a medium-term or long-term impact on the DAA's ability to do what it needs to do for the economy. It is about the nature of the regulatory debate and the argument around the margins. That is probably a healthy thing for the DAA to be run through.

With regard to resources, there is ongoing engagement with the CAR. It has carried out a general review, which it is discussing with us, of its capacity and resilience both in the context of this Bill and the broader context of the CAR's consumer protection functions. That work has been done by the CAR. At the moment we are in discussions and are seeking to determine what extra resources it needs. It is a small unit. Mr. Hodnett may have a different view, as he is entitled to, but I do not see the proposals in this general scheme driving a huge demand for resources, although the CAR faces a challenge with regard to resources generally. We are looking at that.

With regard to a timeframe, we would like to have this in place before the end of the year with, perhaps, a draft Bill in autumn. It would be good to bring the Bill to Second Stage at that time. Obviously, there are other Bills which are a priority so we will have to see where we end up on the list.