Fergus O'Dowd (Louth, Fine Gael)
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The purpose of our meeting is to hear from the chairpersons designate, their approach to undertaking the role of chairperson and their vision for the company. I welcome Ms Fiona Ross, chairperson designate of CIÉ and Mr. Basil Geoghegan, chairperson designate of DAA.

I draw the attention of witnesses to the fact that by virtue of section 17(2)(l) of the Defamation Act 2009, witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by the committee to cease giving evidence on a particular matter and they continue to so do, they are entitled thereafter only to a qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and they are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against any person, persons or entity by name or in such a way as to make him, her or it identifiable. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the Houses or an official either by name or in such a way as to make him or her identifiable.

I now invite Ms Fiona Ross, chairperson designate of CIÉ to make her opening statement.

Ms Fiona Ross:

I thank the Chairman and members of the committee for the invitation to attend today. I am honoured that the Minister for Transport, Tourism and Sport, Deputy Shane Ross has nominated me to serve as chairperson of CIÉ for a three year term.

With the permission of the joint committee, I will abbreviate my statement - members have a copy of it - and speak on the salient points. Before I start I wish to acknowledge the hard work and dedication of my predecessor Ms Vivienne Jupp, who held office for two terms during a particularly turbulent time in CIÉ's history and helped to deal with the implications of the economic downturn.

Following my graduation from Trinity College in 1987, I moved to London where I began what was a 25 year career in financial services. During that time I worked in a variety of roles in London, Dublin, Eastern Europe and the United States and returned to live in Ireland in 2002. From 2002 to 2009, I worked with Bank of Ireland and finally Goodbody Stockbrokers as a director of corporate broking. In a change of career in 2010, I was appointed by the then Minister, Mr. Jimmy Deenihan to serve as director of the National Library. I served two terms as Ireland's national librarian and on completion of that tenure took up a number of non-executive directorships in Ireland and in the UK. These included the UK national archives, the registers of Scotland, the driver and vehicle safety agency in Bristol City Council. In Ireland I served for three years on the board of the National Transport Authority, NTA. I am also currently the chairperson of Mental Health Ireland, Ireland's oldest mental health charity with a large nationwide network. I sit on the board of the Seamus Heaney Trust.

In addition to my undergraduate degree, I also have a business masters from UCD and was awarded a law masters and corporate governance and public policy from Queen's University in 2007. I have since maintained my interest and expertise in governance and currently teach that subject at the Irish Management Institute, IMI.

As most of the committee members are very well aware, under legislation, CIÉ has devolved certain of its statutory functions to three operating subsidiaries: Dublin Bus, Bus Éireann and Iarnród Éireann. CIÉ's role now is therefore to foster the autonomy of its operating subsidiaries while providing the necessary co-ordination in regard to shared issues and shared services. The group's shared services are provided by the CIÉ holding company, and these include Treasury, IT, legal and investigative services and the management of the commuter advertising network contract. As members will know, the group operates a number of defined pension schemes, which in common with schemes of this nature generally face serious challenges in relation to solvency in the long run. These challenges have been the subject of much internal debate and indeed were subject of a recent committee hearing in March. In my tenure, I will seek to encourage all stakeholders to actively engage in seeking a resolution to the challenges which the schemes face.

CIÉ also owns CIÉ Tours, an innovative and highly respected tour operator in North America, the UK and mainland Europe. CIÉ Tours is the largest single generator of inbound tour customers to Ireland from North America.

In terms of the role and the path ahead for me, I see six key issues, which I would like to address with members today. The first is around mobility, accessibility and social integration. Public transport is a key enabler of social integration. We should also recognise in addition to those with mobility issues, and that is a topic for conversation later this morning, that the majority of us have faced or will face mobility or accessibility issues at some point in our lives, whether it with children, and the buggy on the bus or later in older age. Therefore supporting the development of the network which always has regard to minimising issues associated with mobility impairment will continue to be a focus from CIÉ during my term of office.

Financial sustainability is a key issue for me and one that I will focus on during my tenure. In order to deliver on a statutory mandate and to effectively support its operating subsidiaries, CIÉ must operate in a financially sustainable manner while keeping focus on the evolving needs of our customers. In this regard a principal issue that we recognise is that the regulatory environment in which CIÉ operates removes control over many of the levers one might use to manage financial sustainability. Setting up levels of funding, fares, routes, timetables and PSO contract are not within our control. CIÉ will continue to address this challenge. Since 2008 Exchequer-funded PSO contract payments to the CIÉ group of companies have reduced but at the same time passenger numbers have increased and are now up to 2008 levels. Achieving a reasonable level of return from its PSO contracts is essential to the continued financial sustainability of the CIÉ group.

As the economy develops we will need to ensure that the public transport service contract model operates to effectively support the delivery of public transport. CIÉ has a significant role working with the NTA and the Department to determine appropriate levels of funding for public transport.

The PSO contract renewal process which is about to commence is a great opportunity to link improved levels of funding with improved performance for the public in terms of continuous improvement in availability and reliability of all services.

As I have touched on previously, providing appropriately for the pension promise that is made to CIÉ employees in a manner that is affordable in the long run is a key element of achieving financial sustainability. I will encourage a collaborative approach to addressing this challenge with all relevant stakeholders.

As a former board member of the National Transport Authority, NTA, I am conscious of the degree of commonality in the objectives of both the NTA and the CIÉ group. Therefore a key aspect of my tenure will be to support the further enhancement of effective co-ordination between these two State bodies for the benefit of the travelling public in delivering on public service obligations. The long-term effective and efficient delivery of public transport services will be enhanced through a focus on ensuring that as public transport services evolve, we maintain clarity in the roles and responsibilities of CIÉ vis-à-visthe authority.

CIÉ will continue to work to the standards of corporate governance that have been set for State bodies. As Chairman I have a responsibility to ensure that our shareholder, the Minister, as a representative of the people is informed of the key strategic issues and challenges we face. CIÉ will continue to be open and transparent with the Minister and his Department officials and ensure they have all the necessary information to make policy decisions.

The recent round-table discussion on public transport policy was a welcome initiative through which all stakeholders were given an opportunity to feed into a review of public transport policy. This discussion provided an opportunity for all stakeholders to contribute to the ongoing formulation of national transport policy. We at CIÉ look forward to working with the customer, employee and other stakeholder representatives and the Minister and his officials to chart a path for sustainably-funded customer focused service continuity with enhanced capacity across our publicly owned public transport providers.

The national development plan has outlined significant objectives in the public transport sphere. In the context of the plan, CIÉ group again in collaboration with the NTA will strive to achieve greater stability and predictability of funding to facilitate the effective and efficient delivery of large scale infrastructure projects. Programmes such as BusConnects in Dublin, development of bus networks in our regional cities, DART expansion, fleet renewal and capacity improvement programmes for public transport will add tens of millions of additional journeys by public transport annually in the coming decade.

This leads directly to environmental sustainability. Public transport can play a significant role in helping to offset the growth in emissions that inevitably occurs as economic activity intensifies. The more people who choose to travel on public transport the better it is for the environment and society in general. CIÉ will continue to strive to achieve a lower environmental impact from its services and advocate modal shift towards public transport. Electrification of rail operations and the greening of the bus fleet can further enhance the already significant benefits that public transport provides in the context of environmental sustainability.

I thank members for their time and attention. While at this stage I do not have many answers to the questions they may ask, I look forward to working with them, as public representatives, and with other key stakeholders, including the Minister, public transport customers, CIÉ employees and their representatives and my former colleagues in the NTA, to develop answers and solutions to the challenges that may face me during my tenure.

Fergus O'Dowd (Louth, Fine Gael)
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I thank Ms Ross for a very comprehensive statement. Her qualifications are outstanding in the context of the challenges facing public transport. I will call members from Fine Gael, Fianna Fáil, Sinn Féin and Independent in that order if that is agreeable to everybody.

John O'Mahony (Fine Gael)
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I thank Ms Ross for appearing before the committee and for her comprehensive opening statement. I wish her well in her new role. I am reminded of the old adage, "If you need something done, ask a busy person." Based on what she has outlined, she has not been hanging around.

Ms Ross mentioned CIÉ's role in a sustainable public transport system. She also referred to finance and to the pension issue. The latter is a long-running issue that did not emerge today or yesterday. What does Ms Ross see as the solution to the pension issue? What does she see as the solution to make CIÉ play its full role and continue to grow? What advice would she give to the Minister for Transport, Tourism and Sport? I ask her to expand on some of those matters.

Ms Fiona Ross:

While it might be easy to say at this point that my focus would be helping to resolve the pension issue, I agree that it has been a long-running and challenging matter for the organisation. We have a couple of things in our favour. We have buoyant economy, which means that additional funds are available for investment in the public transport system, and we should take advantage of that. The Government is making some great investment in improving the infrastructure, which allows us to have a better and more profitable service. That will certainly help with financial sustainability.

From briefings I have received, I understand some good progress has been made on the pension issue in recent weeks - even since the meeting in March. I am very hopeful. The only way forward is through considerable communication, collaboration and meetings. We need to get all the relevant stakeholders in a room to work it through. There may be a greater sense of urgency on it, certainly in relation to the meeting in March. I would like to proceed on the basis that time may be of the essence and to move forward from there.

John O'Mahony (Fine Gael)
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Would Ms Ross be confident of resolving it?

Ms Fiona Ross:

At the outset of my tenure, I have to be confident that progress can be made. It must be achieved at some point. I would like to think I could make a difference in moving it forward.

John O'Mahony (Fine Gael)
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What is Ms Ross's view on the role of freight for CIÉ? It would make environmental sense to expand the freight business.

Ms Fiona Ross:

It is one of the matters that does not get much attention. When receiving briefings from Irish Rail, freight is something that comes through more laterally. There was a meeting this week about improving activities at Rosslare. There is much discussion about freight and what might be done there. I will ask for a detailed briefing from Irish Rail on its plans and might get back to the committee. I will certainly take note of that.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I welcome Ms Ross. As the Chairman and Senator O'Mahony said, she seems very well qualified for the position and I wish her well in the role.

Ms Ross alluded to the CIÉ pension issue. What is her understanding of the statutory role of CIÉ since the establishment of the NTA? CIÉ seems to own property and be responsible for pensions. Outside that, however, its statutory responsibility is minimal. Can Ms Ross provide an assurance that CIÉ will pay for an independent legal opinion for the pension holders and that there will be no strings attached? Is she prepared, in her new role, to meet the trustees of both schemes? Is she aware of the 2009 document prepared by the CIÉ group which outlined the difficulties in the scheme at the time? What is her opinion on that?

Can Ms Ross confirm whether CIÉ is subject to freedom of information? She might not be able to comment on that.

Is the board of directors full or are there any vacancies at present? What is the annual remuneration for those who serve as directors?

The three subsidiaries, Irish Rail, Dublin Bus and Bus Éireann, are all experiencing huge difficulties with capacity and funding. As Ms Ross said in her opening statement, even though the numbers of passengers have increased significantly in recent years, there has not been a corresponding increase in State funding. Therefore, they are effectively doing more for less money. She quite rightly referred to social integration and that good public transport is essential for a thriving economy and social mobility. Each of these companies faces huge challenges. The Government will undoubtedly state that the national development plan is coming on stream. BusConnects was announced for the second time yesterday. In the short term, how can we ensure that people can have a reliable and efficient public transport service? The only way to encourage people to leave their cars and use public transport is by having an efficient, effective, reliable and affordable public transport service.

The PSO contract will come up later this year. Does Ms Ross favour PSO services being provided by State-owned transport companies or would she favour putting them out to tender?

Ms Ross mentioned that CIÉ Tours is a very profitable arm of the organisation. How profitable is it?

In her reply to Senator O'Mahony, Ms Ross referred to Rosslare Europort. That is also very profitable. There would be opportunities there if the ownership model was changed somewhat.

As a result of the profits derived from that service, if the ownership model was changed and it was jointly owned between Rosslare Europort and the CIÉ group, it would be able to use that funding stream to extract, borrow and invest heavily in Rosslare port, which would be a major benefit to the general and local economies and, in turn, to the CIÉ group.

Ms Fiona Ross:

I hope I can do justice to some of the questions today, and if I cannot give a full answer today I will certainly report back in due course.

I referenced the commonality of interests between the NTA and CIÉ. Throughout my short months since the Minister made the appointment and appearing today something of interest to a lot of people are the roles of CIÉ and the NTA relative to each other, and it is something that needs further thought by all of the relevant stakeholders to understand and have the CIÉ group and the NTA work better together. I look forward to doing some work in this area.

With regard to the pension issue the Deputy mentioned, I read the transcript of the meeting here in March and I realise how complex the issue is and how much detail was provided to the committee at the time. I feel I am ill equipped to give any detailed guidance on the pension issue. I understand some meetings are due to take place this week, which will move some of the issues forward, in particular with regard to the legal opinion. I do not know the outcome of those meetings as they have not been held yet, but I am hopeful they will move forward in a positive direction along the lines the Deputy indicated.

The board will soon have three vacancies. We have three independent non-executive directors, two of whom have indicated they will not serve a second term and one of whom will. That will create two vacancies and I already had one vacancy on the board. I have already communicated with the Department my request for additional independent non-executive directors. I also have four worker directors and I believe there will be one change there. The answer to the question is my board is not fully constituted and I look forward to getting some support from the Minister in filling these very important roles, in particular relating to the audit committee.

I believe CIÉ is not subject to freedom of information legislation but I could be incorrect on this. I will come back to the Deputy if I am wrong on this.

With regard to the challenge to all of the operating companies, one can learn quite a lot in a month but not enough to give a very considered opinion about how I might improve the financial sustainability of all operating companies at this particular point in time. They have all looked hard at their operations and funding levels. In the immediate timeframe, they are working through as many productivity improvements as they can to improve services for the travelling public. Again, this is something we should come back to with more details on how in the short term we can improve things for the travelling public ahead of some of the bigger infrastructural projects which, of course, will make a bigger difference. They are challenging and the organisations are challenged, and it is about figuring out how best to do this.

With regard to the PSO contracts, the timeline is imminent and there will be some announcements in the autumn from the NTA on how it will approach this. I do not want to pre-empt any of these discussions or decisions because I am just not aware of how the NTA will approach it. Certainly the CIÉ group will be ready, willing and able to take our share of any of the PSO contracts that come our way and we will seek actively to do so. This is clear from our point of view.

I believe CIÉ Tours is in single digit millions profitability and that is the answer to that question.

I was briefing myself on Rosslare Europort on the back of the speech of the Commissioner, Phil Hogan, this week. I will have to return to the Deputy on the possibilities for Rosslare Europort and I apologise for not having more details to share with him today.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I welcome the fact Ms Ross is committed to actively seeking to retain as much as possible of the PSO contract. That is positive. How long have the vacancies on the audit committee existed? There should be no ambiguity in the relationship between the CIÉ group and the NTA. It should not be open to interpretation.

Ms Fiona Ross:

Yes.

Robert Troy (Longford-Westmeath, Fianna Fail)
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It should not need greater collaboration. To my mind, there should be quite clear distinctive demarcations on CIÉ's responsibilities and the NTA's responsibilities and how they work together. If this is not the case it needs to be addressed as a matter of urgency.

A point I forgot to make in my opening contribution relates to property owned by CIÉ. Some of the properties, quite frankly, are an embarrassment. Busáras is an embarrassment to the country for tourists coming in and commuters who use it on a daily basis. It is a dump. We would not see it in some Third World countries. I ask Ms Ross to prioritise investment in upgrading our assets. Do we have landbanks that could be utilised in the provision of housing at this time of national crisis?

Ms Fiona Ross:

With regard to the audit committee, the vacancies will arise in July. The audit committee was fully constituted. It is only as we go forward from July that it will become a problem with the non-renewal of a member who chaired the audit committee. That certainly will be an issue starting in July. The Deputy also asked about fees. Board member fees are in the region of €15,000, as a ballpark figure. The Deputy asked me that previously.

With regard to property at Busáras, I take the Deputy's comments on board and certainly will reflect them back to the teams. Those of us who know Busáras will accept it would be a good opportunity to prioritise it perhaps, but I need to know what Bus Éireann intends for Busáras and I do not have that information to hand.

With regard to property, CIÉ has an extensive property portfolio as the Deputy knows. A lot of it is operationally important but, obviously, some of it is not. I will certainly ask that we take a look at the full portfolio in light of the issues around landbanks and the potential for additional development. I will certainly come back on our plans around that in future.

Robert Troy (Longford-Westmeath, Fianna Fail)
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What about the relationship between the NTA and CIÉ?

Ms Fiona Ross:

I agree with the Deputy there should be absolutely clear lines of demarcation between the two entities. What was reflected to me in the past had a little less clarity and it is an opportunity to make clear what each organisation does, and I will take this forward.

Kevin O'Keeffe (Cork East, Fianna Fail)
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I welcome Ms Ross. It is my first time to meet a chairperson from the group. I do not believe Ms Vivienne Jupp came before the committee. From the information Ms Ross has given us, she is a competent person for the job and I hope she brings a bit of positivity to the position. To go back to what Deputy Troy said, does Ms Ross feel her position is compromised as she was on the NTA for a number of years? Recently we had the College Green debacle with the new Luas line and the loss of some important bus access routes. With regard to PSOs, obviously Ms Ross sat on the other side of the fence for a number of years when CIÉ could have done with more money. I know some of it is down to Ms Anne Graham, but does Ms Ross see her position as being compromised in these ways? Is she favourable to keeping in place the free bus pass for elderly people and those who are eligible for it?

Ms Fiona Ross:

I would like to think that my time on the NTA has prepared me for my time as chair of CIÉ, and that I will be able to bring some of the knowledge from, as the Deputy said, the other side of the fence to bear on this side with CIÉ. It has given me a great insight into Government policy and funding. I think I understand the dynamics on both sides a little bit better having had that opportunity. I hope I can make the transition appropriately and I look forward to doing so while bringing with me some good knowledge and experience, which I hope I can turn into a positive benefit at CIÉ in terms of my role at the NTA.

With regard to the free bus passes, I do not have a direct answer on this because it is subject to something on which I need to get a better briefing, so I apologise for not having a specific answer for the Deputy on it but I can get back to the committee on this particular point and I will do so.

Kevin O'Keeffe (Cork East, Fianna Fail)
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One of the concerns I have is with regard to expressway routes. As a result of the competition issue with the EU we could lose some express routes if we allow private operators to take them over.

Ms Fiona Ross:

Yes.

Kevin O'Keeffe (Cork East, Fianna Fail)
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Many private operators do not accept the free travel arrangements. That is my concern.

Ms Fiona Ross:

I appreciate the nature of the problem.

As there are new providers in the market, it is something in policy that the State and its Government will have to take care of. I will report back.

Kevin O'Keeffe (Cork East, Fianna Fail)
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I thank the witness.

Imelda Munster (Louth, Sinn Fein)
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I thank the witness for the opening statement. Much of what I was going to ask has been covered. What is the effect of the loss of Dublin Bus and Bus Éireann routes on the business? Does Ms Ross intend to take on the privatisation agenda? It is fair to say it is possibly the biggest threat facing the public transport network so what is her opinion on that? Has she had meetings with the Minister or the National Transport Authority about it? We know the tendering process is private and there is only limited information that we can get in that regard. It is predictable that lucrative routes are going to private operators and Dublin Bus and Bus Éireann in particular have been left with those which are least profitable.

What do the witnesses think about the public service obligation, PSO, funding not being increased to what has been required over the years and the problems or other effects of that? Deputy Troy mentioned CIÉ funding and the legal opinion from unions but the response was not clear. It was indicated that CIÉ committed to funding of up to €30,000 but that is nowhere near sufficient, given recent developments. I am seeking Ms Ross and the chief executive officer to give a commitment to provide that funding for the legal opinion and not put a limit on it. I would greatly appreciate it if the witnesses would confirm that.

Ms Fiona Ross:

The Deputy asked about the loss of the contracts. In a buoyant economy we have seen there is continued demand and there have been no job losses, for example, as a result of the award. It is early days in considering the impact of the loss of those contracts on the operators. We have not yet seen the new operator take up the role just yet. The jury is out on the long-term impact of privatising routes or awarding the contracts to other providers. It is a buoyant economy currently and Bus Éireann is seeking additional drivers. I am hoping there will be good job security and progress in that direction. We will need to come back to it at a later stage once we see how the operations have done over a period.

There is concern around the so-called privatisation agenda and from the operating company's perspective, we must be ready to tender and, I hope, compete effectively. This goes back to some of the earlier points I made about ensuring the operating companies are as efficient as they can be in order to win the tenders when they emerge. It is something I know is of prime importance and a focus for the operating companies. It is something I would like to get a much better handle on personally once I am in post in terms of how they can compete for those contracts in future under the new PSO awards in the next year. I am hopeful that will be the case and they will continue to win awards. I am not yet in post and I have not met the Minister or people from the NTA. I have not met anybody in an official capacity just yet. I look forward to doing that and I have had some informal conversations. I would like to come back to the committee in due course when I have had those official engagements around some of these key matters.

I wish I could give assurances on pension funding. I am informed things are progressing well with meetings that are due to take place tomorrow with some of the employee representatives around securing some of that funding for the legal opinion. It is all I know at this point as those meetings have not yet taken place. I understand it is looking positive. That is all I can say today.

Imelda Munster (Louth, Sinn Fein)
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The decision on funding will ultimately come to Ms Ross's desk. Will she give a commitment, as the amount originally committed to is insufficient, to provide what is necessary for the unions to get that legal advice? It is a straightforward enough question so would the company cover the cost?

Ms Fiona Ross:

I understand from preliminary briefings that the additional cost is also quite modest. I support the provision of funding to get us to the next stage of the discussion.

Pádraig Ó Céidigh (Independent)
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An bhfuil sé ceart go leor má chuirim an cheist as Ghaeilge?

Ms Fiona Ross:

Tá mé-----

Pádraig Ó Céidigh (Independent)
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Tá sé ceart go leor. The most important indication in the comments from Ms Ross was that there would be open and honest communication, with listening as well as talking. I get that and I wish her very success. She is bringing a breath of fresh air to all of this. I have not met Ms Ross before but I echo what my colleague, Senator O'Mahony, said about her CV. She has a background in the private sector, finance and the public sector. She has been chair of Mental Health Ireland. Those are key ingredients and will be essential in looking at the future of the CIÉ group. I wish her every success in that, and I am sure all my colleagues would support me in that.

Recently a man called Mr. Jim Meade was appointed as chief executive officer of Iarnród Éireann. I have not met him but I have heard some really good things about him. He is from Bunratty and he started out as a fitter at the age of 16 or 17 at Iarnród Éireann and he is now CEO. It is inspirational that we can have people who can work up through the ranks and end up as CEO of an organisation, and do this purely on ability and talent. I recognise that and perhaps CIÉ can do more of this while blending in a certain amount of outside knowledge, which will help in future. Companies do not grow but people grow. The people in an organisation can make it great or, unfortunately, break it sometimes.

I have a couple of questions, although some have been asked and I will not go back. The first relates to the difficulty in getting non-executive directors. My understanding is that this is really difficult, primarily because of the responsibility involved, as well as the accountability. It is not worth the effort for many people. It is a big challenge and I would like the thoughts of the witness in that regard.

Partnerships or relationships with private operators are essential. I know from my involvement in aviation years ago that Aer Lingus could not continue to be all things to all people. It was a big organisation and it realised what it did really well, along with what it might not do really well, before forming partnerships. What is the view of Ms Ross on that type of model or strategy? She has a financial services background and I am sure she saw a number of such structures where companies did not want to be all things to all people.

CIÉ and its group are very much in a competitive environment. I was very strongly encouraged by the reply to Deputy Munster about competitiveness. It is critical and I would love, at some stage, a report on how Ms Ross sees competitiveness being structured. Property is important. The company has two income sources, which are PSO and passenger income. Would the group consider spinning off other companies or businesses to generate significant extra benefit? For example, there are tourism elements already in place and that is a very successful public company generating significant revenue.

I am sure there may be other areas in which, from an entrepreneurial perspective, potential exists. The company could see how to do something differently and form these kinds of relationships. Perhaps a sub-committee of the board, with some senior management involved, could be formed to discuss, for example, blue ocean strategy.

Salaries and wages, as well as pensions, are a large part of operating expenditure. I was delighted Ms Ross said that she will support the trade unions' modest cost proposal and bring it to the next stage. That is positive and important for trust.

Will she give us a brief outline of her, capital expenditure, capex, requirements for the next five, six or seven years, as well as the potential sources of that funding?

Fergus O'Dowd (Louth, Fine Gael)
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Dúirt an cléireach liom gur thosaigh an cathaoirleach nua atá ar Dublin Bus, Ultan Courtney, mar thiománaí bus. Things have changed.

Pádraig Ó Céidigh (Independent)
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That is inspirational. It is people coming from the grassroots up, making a real difference and being recognised for the talent they posses. It is wonderful that the CIÉ Group has recognised that in many people.

Ms Fiona Ross:

Ultan Courtney started out as a bus driver and was then a contemporary of mine at Trinity College Dublin. He came through that way.

Great credit is due to the Public Appointments Service. Great improvements have been made in the recruitment of non-executive directors to State boards and in the process in general. Mr. Geoghegan and I are here today because of that process. It has improved significantly in recent years. Having served on various public sector boards, both here and in the UK, I am a great advocate for it. I spread the word as much as I can in encouraging people to take up places on State boards. It is hard work but it is challenging and important. We need to get the word out a little more about those opportunities. Many improvements have been made. I certainly look forward to engaging in an active recruitment process to replace some of the board members we have lost. I know the operating companies also face similar challenges.

On the partnership and relationship models, from my career in general I would have seen multiple different operating and business models in operation in many countries over the years. We are evolving to that a little bit more in the public transport space in Ireland. That is a challenge but it is also to be welcomed. It is a necessary part of the future. Everyone cannot do everything. We certainly need to have some competition, efficiencies and alternative sources of funding in the system. We need to be open-minded to what might be possible alternate ways of delivering services. The challenge for the operating companies, which are willing and able to take on that challenge, is to look at how best they can do that. I certainly look forward to working with them. They are fairly autonomous in how they approach these matters but, from a group point of view, we hope to work together.

I will come back to the Senator on capex. I do not want to give any false or ballpark information on this. Between the NTA and the Government, we are aware of significant capital funding being made available to the sector as a whole. Somewhere in the region of €8 billion has been announced for big projects such as MetroLink and BusConnects. Yesterday, €2 billion was announced for the latter. We are certainly seeing welcome significant capital investment from the State into the public transport network. Our job at CIÉ and the operating companies is to make best use of the funding available to us and come up with some innovative ways of achieving those goals.

The property portfolio in CIÉ generates a small amount of money and a good income. It has certainly been subject to review along the way. I look forward to having another look at that to deal with the points made by Deputy Troy in respect of landbanks and ensuring that we make the best use of our property portfolio.

Fergus O'Dowd (Louth, Fine Gael)
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I welcome Ms Ross’s appointment. She will be dynamic. As other members said, her qualifications are excellent and wide-ranging.

The economy is doing well. For the first time in many decades, there is significant investment in public transport. It is important that the public transport companies will be changing. Competition is good. I welcome it because it gives choice to consumers and puts competitive pressures on State companies. This is good because the taxpayers’ interest ultimately becomes the primary one. The CIÉ companies must have the capacity to meet the problems with our expanding population and economy, as well as the transport issues relating to Dublin. The DART expansion, MetroLink and BusConnects will be transformational over the next seven years.

I live in a wonderful place called Drogheda. We look forward to the DART being connected to our town. It will make a big transformation. One DART will be able to carry all of the passengers who currently travel over this route over a 24-hour period. Obviously, the town will grow then. The key to developing our economy is by developing the nubs around the city which can reverse the flow of people travelling into Dublin.

BusConnects should be an opportunity for investment by private and public companies to provide a much better transport infrastructure.

We are at the crossroads and we have to make the right decisions. The way in which Ms Ross has answered our questions gives us confidence that we can interact with the company. Deputy Troy suggested that we visit Busáras. It is a fine building from an architectural perspective and it was built for its time. It might be important that the committee visit CIÉ’s headquarters to look at issues there. One of the keys issues for me is that of Connolly Station. I would like to get to know more about it and how will CIÉ deal with the pressures of commuters getting through the city.

Robert Troy (Longford-Westmeath, Fianna Fail)
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On Deputy Munster's question, Ms Ross said she is willing to ensure that necessary funding will be made available for no-strings-attached legal advice to the unions. Is she prepared to meet the trustees of both schemes when she takes up her position?

Ms Fiona Ross:

Absolutely. I look forward to doing so. There is no issue with that. I have already made arrangements to engage with many other stakeholders on this and other important issues. My door is open. No one will find me shy in meeting people in order to try and progress the agenda.

Fergus O'Dowd (Louth, Fine Gael)
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I invite Mr. Geoghegan to make his opening statement.

Mr. Basil Geoghegan:

I am delighted to have been appointed as chairman designate of the Dublin Airport Authority, DAA, by the Minister for Transport, Tourism and Sport, Deputy Ross. As part of that appointment process, it is my pleasure to be present for this meeting. I will provide some detail on my professional background and outline why I applied for the position of DAA chairman. I will also set out my initial impression of DAA and how I believe I can support its chief executive, management team and staff to grow the business, both at home and abroad, for the benefit of the State.

I am from Dublin. I attended Trinity College Dublin where I obtained a degree in law.

After graduating from Trinity College Dublin in 1990, I left Ireland and completed a masters in competition law at the European University Institute in Florence. Following a short period as an intern in the European Commission, I qualified as a solicitor with Slaughter and May, a leading English law firm, in London. In 1995, I changed career and started work as an investment banker at Goldman Sachs. Since then I have worked in London and New York and during that period I have also worked with Deutsche Bank and Citigroup. Most recently, I became a founding partner in a new advisory firm called PJT Partners. We were established in 2015 and are listed on the New York Stock Exchange.

During my career I have spent a lot of time advising companies in the broad aviation sector. My clients have included private aviation companies such as Pembroke Capital in Ireland and Fairchild-Dornier and public companies such as Rolls-Royce and BAE Systems. Those roles have spanned placing equity for companies such as Avolon and Ryanair and raising debt for IAG and Garuda. In Ireland, I advised the Department of Transport, Tourism and Sport, and later NewERA, on ownership options for Aer Lingus. I also defended Aer Lingus from two takeover bids launched by Ryanair.

I have been a director of the Irish Aviation Authority, IAA, since 2012, a position which has given me further understanding of the Irish aviation sector, and particularly the challenges of developing operations, the new air traffic control tower and the new runway at Dublin Airport. My intention is to step down from the IAA board before taking up my role with the DAA.

Ireland is an important place for me. I travel through Dublin Airport most weeks, so know it well as a passenger. I have first-hand experience of the improvement in the passenger experience over the past 20 years. I have had the opportunity to compare it regularly with the many other airports around the world I travel through. At least as a passenger, I have seen the good and the bad in airports and airlines.

Despite leaving Ireland in 1990, I have maintained close links throughout my working life. In business, I have worked with clients such as Eircom, C&C Group, Elan Corporation, the Government and several of the banks. I have worked with large overseas purchasers of Irish companies and have also helped many Irish businesses invest and raise funds outside Ireland. I was involved for more than 12 years in the Ireland Funds of Great Britain, including several years as its chair. I led, with others, the Forgotten Irish Campaign to assist the vulnerable and elderly Irish community in Britain. We focused particularly on helping the survivors of institutional abuse who now live in Britain, especially women from the Magdalen laundries. I was honoured to do that work and to support those women.

My reasons for applying for the role as chairman of DAA are straightforward. First, DAA plays an increasingly vital role in the Irish economy. Dublin and Cork airports are essential connections with the global economy upon which Ireland depends, but on which we have also built our strength. I understand this connectivity first-hand. Dublin Airport is Ireland’s largest airport, handling almost 30 million passengers last year. Passenger numbers at Dublin have increased by approximately 50% over the past five years and it is now the 11th largest airport in the European Union. Cork Airport is the second largest airport in the Republic of Ireland. Passenger numbers at Cork are up 11% over the past two years, and it has further strengthened its position as the key gateway to the south of Ireland region.

Aside from its two Irish airports, DAA is also something of a hidden Irish multinational. Its travel retail business Aer Rianta International, ARI, manages stores in 12 countries on four continents that collectively employ approximately 3,000 people and have a combined turnover of more than $1 billion per year. The group also manages terminal 5 at King Khalid International Airport in Riyadh, Saudi Arabia through its DAA international subsidiary. To put this in context, terminal 5 is about the same size as terminal 2 in Dublin, so it is a sizeable business in its own right.

While Dublin and Cork airports welcomed almost 32 million passengers in 2017, DAA’s overall business provided services to more than 135 million passengers last year, through its airports, airport management contracts and retail outlets. The financial impact of DAA to the State is also important. Dublin Airport supports and facilitates €8.3 billion worth of economic activity which is equivalent to more than 3% of Ireland’s GDP. Cork Airport supports and facilitates a further €727 million of economic activity, which equates to 2.2% of the total south west economy.

Although it is owned by the State, DAA receives no funding from the State. The authority's investments in new facilities in Dublin and Cork airports and in its overseas business are funded through its own resources and borrowings. The authority is instead a major contributor to the Exchequer, paying €432 million to the State in dividends and taxes since 2014. Growing DAA’s business both at home and abroad has a twofold benefit for the State. The connectivity delivered by Dublin and Cork airports is a vital enabler for the economy. Growing the business also generates additional revenue for the Exchequer in direct taxes and dividends paid by the group. Continuing this balance of domestic and international investment and return will be important.

My second reason for applying for the position was the national importance of developing the north runway. Given the growth at Dublin Airport, the successful development of the north runway, in a way which increases the airport’s capacity and flexibility, is of huge importance. Having the opportunity to develop, finance and operate such an important element of national infrastructure on time and within budget is a very exciting prospect.

Dublin Airport’s existing main runway is operating at capacity at peak times and the new runway is vital to allow the economy to grow. The current plan is that DAA will award the main construction contract for the new runway this autumn. Construction is due to be completed by early 2021, after which there will be a nine-month commissioning phase before the north runway can be brought into service. However, significant issues are still to be addressed regarding the new runway and these are not widely known or understood.

Under the current planning conditions, as soon as the construction of the new runway is complete Dublin Airport would have to introduce an airport-wide reduction in the number of flights during the night and first thing in the morning, which is its busiest time of the day. The airport currently caters for approximately 100 flights between 11 p.m. and 7 a.m. every day. The restrictions would cut this to 65 flights, causing an immediate and negative impact on flights, jobs and connectivity for Ireland. The airport could lose up to 3 million passengers in the first year due to the restrictions. By 2037, the restrictions are estimated to cost the economy more than 17,000 jobs, which to put it in context, is a greater level of employment currently offered by the combined operations of Apple, Dell, Google, Facebook, and Microsoft in Ireland.

The DAA is seeking to amend these restrictive conditions, but to do this, we need clarity urgently on the new system for noise regulation at the airport. The Government has said that establishing the new noise regime is a priority and that Fingal County Council will be the new independent noise regulator for airport. In due course, DAA will make its case to the regulator; other stakeholders will also have an opportunity to have their views heard and ultimately the regulator will make its decision. However, without the enabling legislation and an appropriate amount of time, there is a risk of the undesirable situation I outlined crystallising. That would mean that despite having built a new runway, Dublin Airport would have fewer flights and reduced connectivity. As a country we have a great opportunity with the north runway to be on the front foot and to show how we can develop our infrastructure efficiently and quickly. I would ask members to do everything they can to progress this matter and ensure the timely enactment of the legislation and establishment of the noise regulator.

I am also mindful that the new runway is understandably an important issue for some of the airport’s neighbouring communities. The DAA is continuing to meet local groups and individuals on an ongoing basis and I support this dialogue. Since the north runway was announced in April 2016, the authority has held more than 125 meetings with approximately 1,500 local residents, either individually or as part of residents’ groups. That dialogue will continue.

At the same time as the authority proceeds with the new runway, we are facing potential upheaval with Brexit. In my business in London, I am focused on this issue. Planning our way through Brexit, and optimising the DAA for the post-Brexit environment, is a vital endeavour. The new runway will enable Ireland to better compete in that post-Brexit world and it is essential for Ireland’s economic well-being that the delivery of the runway allows Dublin Airport to continue to grow.

As chairman of the DAA, ensuring the proper functioning of the board will be an important focus of mine. As the board evolves through new members and reappointments, it will be crucial to have the right balance of skills, views and diversity and we will work in co-operation with the Department and the Public Appointments Service to deliver this balance. Having watched the DAA develop, from the perspective of a regular passenger, from my role in the IAA and with my various aviation clients, the opportunity to be its Chairman and to work with the board and staff of the authority is both a great challenge and an honour.

Again, I thank the committee for the invitation to attend and I am happy to answer any questions that Members may have.

Fergus O'Dowd (Louth, Fine Gael)
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Before I open the debate up to Members, I congratulate Mr. Geoghegan on his nomination. Like Ms Ross, Mr. Geoghegan is highly qualified. In fact, both of the chairperson designates are exceptionally qualified to carry out their new commitments. Their comments are so important that I think we should immediately forward them to the Department of Transport, Tourism and Sport and the Department of the Taoiseach, particularly their concerns.

Kevin O'Keeffe (Cork East, Fianna Fail)
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The Minister probably saw newspaper articles about the issue this morning.

Fergus O'Dowd (Louth, Fine Gael)
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I hope so. As a committee, we will formally forward the comments.

Robert Troy (Longford-Westmeath, Fianna Fail)
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The Chairman can forward them as he is a neighbour and, therefore, can complain.

Fergus O'Dowd (Louth, Fine Gael)
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It is hugely important that we forward the comments. I do not mind a joke here or there but this important matter is a serious one. I know that Members will wish to comment on it. It would be a good step for us to forward the comments; I do not mind if we convey them using a paper aeroplane, a paper trail or an electronic flight but they should be delivered immediately.

John O'Mahony (Fine Gael)
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I thank Mr. Geoghegan for his presentation. I wish him well with his nomination and new appointment.

Mr. Geoghegan raised serious issues in his presentation. It seems incredible that one could have an extra runway but fewer flights and I am at a loss to comprehend such a situation coming to pass. He might speak some more about the seriousness of the issue.

I note that Mr. Geoghegan has said that he will step down as director of the Irish Aviation Authority once he takes up his role with DAA. Will his past role representing certain airlines and knowledge of the aviation industry help or hinder his new role?

Mr. Basil Geoghegan:

I thank the Senator for his good wishes.

In terms of the runway situation, there is a long history associated with the planning permission and how that has developed. In the meantime, the EU has promulgated a regulation for how noise should be addressed at airports in Europe, under what it calls a balanced approach. That allows all interested parties to put their views forward and allows the regulator to make an independent decision based on EU standards. From our perspective it is very important in terms of the decisions about planning permission that were made a long time ago that we evaluate them in light of how airports operate today. This is particularly important in light of advancements made in aircraft technology, routing technology and noise abatement procedures. It is not a question that we want to change the conditions just because we do not like them. We want to have the new noise regulator in place. We want to put forward our case and we want everybody else to put forward their cases. We want the regulator to decide how the airport should operate. We would like all of that to be well in place before the new runway is due to open. As Members will know, in the context of airports, airlines must have notice as to where they will fly to and base aircrafts because that has a knock-on effect on time. Also, lots of people around the airport want to know the answer so that they can decide what they want to do in the context of the development of the new runway.

From our perspective, it would be particularly helpful if we could move forward in parallel with both the legislation and to give Fingal County Council, which has been established as the regulator, the funding and basis upon which it can set itself up. That would ensure it is immediately up and running and prevent having to come at this situation following a delay.

In terms of my past roles, the educational experience that I have received is far more of a help than a hindrance. I have advised a number of airlines that were sometimes in complete opposition to one another yet I have managed to work on one side and then on another side at a later point. The focus on giving good advice is really what has enabled that and I hope that is the type of advice that I will be able to drive through the board of the DAA.

Fergus O'Dowd (Louth, Fine Gael)
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Did Senator O'Mahony ask about a conflict of interest?

John O'Mahony (Fine Gael)
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My question was in the context of past advice. Mr. Geoghegan has answered my question.

Fergus O'Dowd (Louth, Fine Gael)
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Yes.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I welcome Mr. Geoghegan. I welcome the fact that he has spelled out the stark challenges associated with the second runway that face the Dublin Airport Authority. I am not being flippant when I say that I have consistently beaten this drum for two years. Unfortunately, the Minister has not taken the issue as seriously as he should have.

In the context of Mr. Geoghegan's new role, has he received a briefing on or clarity as to why we were informed, for two years, that legislation was being drafted to make the Irish Aviation Authority, of which he was a board member, the competent authority for noise regulation? The primary legislation was promised repeatedly in the Dáil. Has the Minister explained why that legislation was not delivered?

Mr. Geoghegan has outlined that if a new runway is not delivered it could cost anything in the region of 17,000 jobs. Is Mr. Geoghegan concerned that the Minister seems more preoccupied with providing a third terminal for Dublin Airport than a much needed runway?

Is Mr. Geoghegan aware of Brexit plans that would allow the airport to deal with the fallout from Brexit?

The Dublin to London route is the busiest city to city aviation route in Europe and the second busiest in the world. Without an open skies policy there is the potential that aviation companies will cease using the route if an agreement is not put in place. Has background preparatory work been done on this matter?

The ownership model for Cork Airport prohibits the airport from setting its own fees and charges. Does Mr. Geoghegan feel that situation constrains Cork Airport's ability to formulate a pricing structure and aggressively pursue more business? Would he favour a change in that situation?

I accept that Mr. Geoghegan has previously worked for various competitors at different stages. Will he cease to be a consultant for the aviation sector given his new role as chair of the DAA? I believe there would be a conflict of interest if he continued to provide consultancy to airlines that could be potential customers of the DAA. Will he cease consultancy work when he takes up his position?

One of the key points that Mr. Geoghegan made in his submission was about a second runway. The Minister for Transport, Tourism and Sport has not met the CEO of Fingal County Council. He confirmed that fact to me three weeks by way of his reply to my parliamentary question that I tabled in the Dáil.

Fergus O'Dowd (Louth, Fine Gael)
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We should invite the Minister to attend a meeting.

Robert Troy (Longford-Westmeath, Fianna Fail)
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In terms of the committee issuing a letter to the Minister, we were promised that draft legislation would be in the House before the summer. I believe that it is highly unlikely that will happen.

From my perspective and that of the committee, Mr. Geoghegan is pushing an open door in respect of this necessary legislation to make Fingal County Council the competent authority. However, what engagement has he had to date with the person who can really push this, accelerate it and make it a reality?

Fergus O'Dowd (Louth, Fine Gael)
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Just before Mr. Geoghegan answers and in order to be helpful, I suggest that we ask the Minister in to answer this question separately. Perhaps we will ask him to come in as soon as possible - in addition to the other communications we will be having with him - because this is a hugely important issue.

Mr. Basil Geoghegan:

I will try to get through Deputy Troy's points in order. On what has happened in recent years regarding the choice of regulator, I understand that different advice was given and that there was a conflict with the IAA and so on. I am aware of the issue from the outside, not from the inside. Obviously, I have also read what has gone on at meetings of this committee and the questions that have been asked. From my perspective, what is now most important is how we move forward from the point at which I take over as chair. I understand that there is a significant cross-departmental effort to move the primary legislation forward and that the intention is to have it enacted by the end of the year. What is equally important, but which grabs fewer headlines than primary legislation, is the statutory instrument that would enable Fingal County Council to be set up as noise regulator and to carry out all the work it needs to do in terms of funding, personnel, expertise and all of the usual things that a regulator needs to do. From the time I have spent on the board of the IAA, I have seen that running a regulator is not an inconsequential matter, particularly if one has not done so before. This one is being started ab initio. That is my understanding at the moment.

I will also answer the Deputy's final question. I have not yet had a meeting with the Minister to discuss what the next steps are with regard to the runway. I expect that will happen shortly. Obviously, I have been in contact with him and his officials regarding a number of matters. I understand that he will also give me my mandate when I am appointed as chairman. I have no doubt that is number one on the priority list. That is where I am on that.

On the third terminal, Departments can cover many issues and I understand that the runway is one, that what happens in the context of the terminal is another and that there are many other issues which will be before the Department. In respect of the third terminal, the question of whether one is needed is interesting. On the other hand, it is not really about terminals. The issues at Dublin Airport, other than building a new runway, are actually stands, gates, taxiways, and the ability to move aircraft around efficiently. That actually has very little to do with a terminal. A terminal is where people arrive, get processed and move through. In fact, using terminal capacity in the correct sense of the term, there is a huge amount of terminal capacity at Dublin Airport. As I said, it is more about the infrastructure of stands, gates and taxiways. That is important.

I agree with the Deputy that the issue of aviation after Brexit is incredibly complex. It is not just about the ability to fly under the EU Open Skies agreement, but the regulation of those flights through the European Aviation Safety Agency, EASA, which has knock-on effects in the context of insurance and many other things. The negotiations are being run at an EU level. I am not aware of any but, equally, I have not asked the Department what special thought is being given to Ireland. I am clearly aware that there are issues from an air traffic control perspective because we share a functional airspace block with the UK. There are many issues relating to Brexit which are unclear because there has not been that much progress in those negotiations over the past two years. As I find out more, I will be very happy to discuss the point further. It is a very important point.

The Deputy asked about Cork Airport. I do not think that Cork is restricted in competing due to it being part of the larger DAA. It is interesting that the charges at Cork Airport have been flat for more than ten years. Indeed, Cork Airport is also able to offer pretty attractive reduced charges to airlines that want to start there. Over the first five years of a route being in place, the airport is able to offer very good fees. Some of that is evident in the fact that there has been growth at Cork Airport in the past two years. It has grown by approximately 11%. It has an incredibly good terminal building. It feels very good to go through it as a passenger. An airport does not exist on its own but as part of a community. There is a big effort on behalf of the DAA, with the local Cork management team, the development council around the airport and with local people in the region - both people in the community and business people - to try to drive traffic through the airport. We are absolutely focused on doing that. Cork is the second biggest airport in the State. That cannot be gainsaid.

Finally, on conflicts, in my business we have always had to address conflicts ranging from who should be advised to where there may be conflicts with other parts of the business. We would never accept any business which would put either us as a firm or any member of the firm in a conflicted position. We would absolutely address that.

Robert Troy (Longford-Westmeath, Fianna Fail)
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I do not for a minute believe Mr. Geoghegan to be a naive man. If, however, he thinks that just because the Minister or the Department say something will be done by December it is a fait accompli, he needs to wake up. For two years we were told that the legislation relating to IAA was imminent. We were told it was due in a matter of weeks or that it would be done before the summer recess. Mr. Geoghegan is right. It is not just about the primary legislation - although that is the headline item - it is about the statutory instruments and ensuring that Fingal County Council, whose current biggest noise issue to deal with is rifle noise in its area, can upskill people and that it has adequate personnel and resources in place. The man in charge of delivering that has yet to meet the CEO of Fingal County Council. I do not expect Mr. Geoghegan to comment on this but to me that speaks volumes about the Minister with responsibility in this area.

Fergus O'Dowd (Louth, Fine Gael)
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In fairness to the Minister, if we are to ask him in to answer questions on all of those issues it would be fair, appropriate and proper that we do it as soon as we can. It would be fair to make those points to him directly. I do not expect Mr. Geoghegan to make a political comment on it. Glaoim ar an Seanadóir Pádraigh Ó Céidigh arís.

Pádraig Ó Céidigh (Independent)
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Gabhaim buíochas-----

Fergus O'Dowd (Louth, Fine Gael)
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Not as Gaeilge though.

Pádraig Ó Céidigh (Independent)
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The Chairman is always slagging me. I cannot help it. It is not my fault. I thank Mr. Geoghegan for attending. I wish him every success in his role. I am sure he will do a very good job. He certainly has the business background and experience that I hope will support the DAA going forward. I am not going to go back over questions people have asked. One of the advantages, or disadvantages, of being last is that most of the really good questions have already been asked. The issue of planning is something of which I am acutely aware. It is a very big issue. I know the IAA is concerned about it as well. Deputy Troy articulated it really well when he asked Mr. Geoghegan those questions on it.

It would also be useful to see what strategy the DAA has with regard to Brexit. I am not talking about the macro situation. I am really talking about flights between the UK and Ireland and about how Brexit may affect the number of flights between the UK and Ireland, whether that effect is to reduce it or otherwise. I also note that in recent weeks and months 14 new routes and four new airlines have been announced for Dublin Airport. There will be flights to places such as Beijing, Hong Kong and so on. Obviously, there have been direct flights to places such as San Francisco for the past two and a half years. The significance of Dublin Airport to an island economy such as ours is absolutely huge. It is incredibly positive that the DAA is a net contributor to the Exchequer by means of tax income and dividends, as Mr. Geoghegan said, and that it is totally self-funding, as is the IAA.

It is a positive contributor to the Exchequer but it does not receive funding from any Government source.

It may be early days. Mr. Geoghegan has not had an opportunity to put his feet under the table and dive into these areas, so if he cannot address these questions, that is fine. He mentioned metro north, which is crucial for the economy and Dublin Airport, the only airport in Europe, possibly the world, that is not accessible by rail. Ms Ross may also wish to comment on that. That link is critical. However, I ask that neither Na Fianna GAA club nor Scoil Chaitríona be ruined by the rail link. The committee has debated that issue and it supports the view of the local community in that regard.

Dublin Airport has 30 million passengers annually while Cork Airport has 2.3 million, approximately 7% of the number in Dublin. Having 7% of the passenger numbers of the largest airport in Ireland is not particularly significant for the second largest. An active strategy needs to be put in place to support Cork Airport in doubling its passenger numbers over the next five years rather than growing by 7% or 8%. I suggest aiming high on Cork Airport and positively supporting it. I acknowledge Mr. Geoghegan stated that passenger numbers have increased by 11% in the past two years.

Although it is outside his domain, Shannon Airport is a critical part of our infrastructure. In 2012, it became an independent company separate from the DAA. When the Minister comes in, it would be worthwhile to widen the discussion to address other airports, in particular Shannon Airport and Ireland West Airport, Knock, as that is not an area on which Mr. Geoghegan can comment given they are outside his brief.

Is Cork Airport commercially viable? Is it a net generator of income for the DAA or a net recipient of funding? It has received significant investment for approximately seven or eight years and the fantastic terminal building was mentioned. Is other significant capital expenditure required for Cork Airport over the next five years? If the witnesses do not know, I ask that they revert to the committee with that information. How do they see the relationship with Cork Airport into the future?

There are two parts to operational matters. One is the movement of aircraft, which is fundamentally air side, and which needs to be managed. The other part is efficiency in the flow of passengers. People want to get on and off their aeroplane as quickly as possible. I do not know if the witnesses can comment on that issue. People primarily measure time and money. They measure going from A to B in terms of time and cost.

What are the witnesses' views on a second Dublin airport in Gormanston or elsewhere? Dublin Airport has 30 million passengers and does not have the capacity to cope with growth similar to that of the past five years. Most European capital cities have at least two airports, in particular cities to which more than 25 million people travel by air. I would value the witnesses' opinions on that issue.

There are two parts to security in terms of the big picture. This probably links in to Mr. Geoghegan's work on the board of the IAA. One part is the process of passenger security, including luggage and all related matters, and the other is overall airport and aircraft security. Does the DAA have a policy on drones? That could become a significant issue. Has the DAA considered it from a security perspective?

Kevin O'Keeffe (Cork East, Fianna Fail)
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I welcome the appointment of Mr. Geoghegan. I wonder how he, as a man in his prime and with his curriculum vitae, can find time to take on this role. I doubt that the paycheck compares to wages he received in previous employment given his expertise. Does he have enough time for the role? He will be under significant public scrutiny.

I acknowledge the significant role played by the DAA in contributing to the Exchequer. Senator Ó Céidigh pointed out that Cork Airport generates €750 million for the economy, as stated in the report, which is good news regarding my backyard.

While Mr. Geoghegan remains in his role with the IAA, will he discuss with the Minister his concerns regarding the second runway and the issues he has highlighted? The matters have the attention of the public and I share his views. It is similar to Transport Infrastructure Ireland, TII, building a bypass with the intention of taking the pressure off a town centre. However, the purpose of a bypass is also to provide for economic growth and further uptake. Mr. Geoghegan is of the view that the Minister and planning issues are restricting that development, which is a major concern because much night time and early morning travel is business travel. I hope that concern will be addressed. Enabling legislation must be put in place. As Deputy Troy and other speakers stated, the ball is in the court of the Minister.

Cork Airport is doing a great job in terms of trying to secure as many connections as possible. It was hoped that the transatlantic route to the United States would be a big success but it will cease operating in the autumn. Can Mr. Geoghegan offer a positive outlook on that issue? The decision to withdraw the route could be revisited.

I mentioned Mr. Geoghegan being overqualified and the potential conflict of interest but he has covered that.

I wish to highlight the importance of metro north. The importance of a rail link to the airport to the city centre is evident in every major European or other city. It is of phenomenal importance and must be acted upon more quickly. There may be expense or inconvenience to organisations or residents but metro north is as important as a second runway.

Mr. Basil Geoghegan:

I will try to deal with the questions in order. If I may offer a light-hearted response to my having enough time for the role, I go through the airport every week and thought I might get a job there at some point. I have finally gotten one.

On Cork Airport, as raised by Senator Ó Céidigh and Deputy O'Keeffe, we agree that it needs an active strategy for developing its business. That is nothing to do with its being part of the DAA. Rather, it needs an active strategy because there are several airports nearby, including Shannon and Kerry, which can compete hard for business. Cork Airport is also in the unusual position of having good road infrastructure to Dublin. Ultimately, we have to get passengers to use it and persuade airlines to develop routes from it.

On the profitability point, the right way to look at this is that whenever infrastructure is in place for a long period of time, it may or may not be profitable in any one period but we need to make sure it is providing a return on that capital over the longer period. I do not have all of the figures to hand but I am happy to have a further discussion or provide the committee with the information. That is how we need to look at Cork Airport developing over a longer period.

I will pick up on the related point about transatlantic connectivity with Norwegian. It was a significant win to get the Norwegian flights to Providence. We were disappointed because, within DAA, we are a direct financial beneficiary of Norwegian running those flights. We want the airline to run more flights with more passengers every day. In the context of airline practice, a route is often started and it is a bit difficult in the beginning or it can be run during the tourist season but not in the off-season. I believe Norwegian has indicated that it will run again after the winter season but I need to confirm that. We see it developing and then, as passengers know the route is there, it will become easier to run during the winter season as well. We are focussed on that and it is important to us.

Under the national aviation policy, there is a review of the ownership of the airports every five years and I believe that comes up again next year. We will leave that to the Department and, ultimately, our shareholder to decide what they want to do. For as long as we own Cork Airport, we will do everything we can to make sure more flights and more passengers go through that part of our business. I return to the second runway to deal with Deputy O'Keeffe's question. At the IAA, the former chief executive, Mr. Eamonn Brennan, was a stalwart of Irish aviation. He was in constant communication with both the DAA and the Department about how the airport should be developed and how important these issues were. That communication has been going on for some time. The IAA had to take a decision to build a new tower, that would be able to cope with both runways, before a decision was taken that the north runway would go ahead. That was an important act of faith that the authority took in trying to move this forward.

The other point on the runway is that I am here from a DAA perspective to try to make sure that if we are going to spend a significant money to develop a runway, we want to operate it for the betterment of our passengers, our airline customers and the State. That is why we are pushing hard on the legislation. The Minister has not imposed any of these planning conditions; they were set down previously. This is about looking forward and making sure we are a small, flexible, efficient country. Let us do it right. We have seen the development of runways in other parts of Europe which have been difficult.

That might be a lead-in to the Senator's question on a second airport. The discussion about aviation infrastructure is interesting. We need to focus on the runway and what we are doing in developing the gate and stand capacity. Within what we have responsibility for, we have capacity well into the 2040s if we can develop it correctly. There will then be another discussion as to whether another terminal is needed. I would hate to have to build a new airport near any European capital city these days given the restrictions.

Senator Ó Céidigh also asked about passenger flow. The passenger experience is one of the important metrics that we measure in Dublin Airport. If a passenger does not have a good experience, that will be on social media within a minute and it will get more airtime than any other form of media. We are focused on that and I agree time and money are important. On money, the passenger charges which the airlines pay are competitive compared to other airports. That is subject to regulation as well and balance in respect of what we spend.

More important, however, is a safe and secure airport, which we may take slightly for granted, and then to develop the operations from there. The issue of drones was raised. I am not aware at this time of the DAA's policy on drones but the IAA has been at the forefront of drone regulation in Europe and policy on drones around airports. I am happy to return to the committee if the DAA is doing something separate. Given that our security and the security of the aircraft arriving are all governed by the IAA, that is something we work hand in hand with the authority on.

There was an earlier question on Brexit and Deputy O'Keeffe also asked about metro north. I am in the right place, with Ms Ross beside me. An airport is only as good as the infrastructure and the communities it is working in. Connectivity with the airport is, therefore, important. It is also important to us because we are under a restriction as to the number of passengers that can go through Dublin Airport. That is partly to do with how people arrive at the airport and we will deal with that in due course. It will be dealt with because the number of passengers now includes nearly 2 million passengers who only come into the airport and travel on, so that will help develop the airport in a different way. We support anything that will improve the connectivity of the airport to its near and farther surroundings. On bus stations, I am proud that the DAA has the largest bus station in Ireland within the confines of the airport.

In respect of Brexit, the issue not only for the DAA but for Ireland is the weakness of sterling against the euro has reduced the number of passengers coming from UK provincial airports. We have seen an increase in passengers from London as some UK firms may be relocating to Dublin, which has seen more people wanting to fly from London to Ireland. There is an issue in respect of the economic growth of the UK and its impact on Ireland. Generally speaking, if Brexit happens, on whatever terms and at whatever time, there will be an element of detachment of the UK from Ireland.

I have not started in the role yet, and I will gain a better understanding of our strategy on Brexit.. Every airport in Ireland competes with the two airports in Belfast, so to the extent that we can win traffic, that is good. When flying from the US to Ireland on a holiday, people do not necessarily pick an airport; they decide what is the cheapest and most efficient way to get here. This may sound like turning back time, but we may end up with duty free sales again for people travelling to the UK. It might be a while.

Pádraig Ó Céidigh (Independent)
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Competition is healthy and we need to have a debate in a public forum on a second airport in Dublin. I understand the Chairman's perspective that there is enough competition as it is. My experience of Dublin Airport as a passenger and from an airline perspective has been positive. I have found the senior management team down the years proactive, supportive and helpful, which is contrary to what other airline CEOs have said on occasion which was unfair. I have an important question from an airline perspective. With 30 million passengers, does Mr. Geoghegan see Dublin Airport becoming slot controlled in the way that Heathrow Airport is? That is important from an airline perspective. If an airline wants to fly to Heathrow Airport, depending on the time of day, it may have to pay millions of euro for a slot.

For example, when Aer Lingus was sold about three or four years ago, the Aer Lingus slots were a big part of the value of the Aer Lingus balance sheet even though those figures were off-balance sheet. Does Mr. Geoghegan see Dublin Airport being slot-controlled in a way broadly similar to Heathrow?

Mr. Basil Geoghegan:

My understanding of slot constraints, without having the detail of what was discussed in the DAA, is it comes down to a number of things. It is about being able to land on the runway and about gates and stands. They are the different things involved. In the US, they talk about gate access rather than runway access because there it is gate access that is constrained. Our job is in developing the runway and then the rest of the infrastructure around gates and stands and to make sure we always manage to keep availability ahead of demand. What that really means is, given the length of time it takes to develop some of this, in terms of planning and building out the airport we are looking five, ten or 15 years ahead. There is a master plan for the airport within which we operate. That also means we have to look through what potentially might be a number of aviation cycles. Sometimes there may be a down cycle where we should be building because we know there will be an upcycle again. The fact that the price of fuel has gone up or down because there is or is not a war in the Middle East may have an impact on revenues and the number of flights in the short term. We take a very long-term approach. Our long-term approach is to make sure where there is demand for a passenger or an airline to fly that we can do it without placing any constraints on their ability to do it. We also do it within the framework of a community, noise regulation and everything else. An airport is part of the community. That is what we have to work with here. That is what we are determined to do.

Pádraig Ó Céidigh (Independent)
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That is a great answer but to a question I did not ask.

Fergus O'Dowd (Louth, Fine Gael)
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He is a politician.

Pádraig Ó Céidigh (Independent)
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The question is straightforward. Does Mr. Geoghegan see Dublin Airport being slot-controlled in a way broadly similar to London Heathrow? I do not know how many movements there are in and out of Dublin every day. The biggest factor with regard to slot control - Mr. Geoghegan mentioned it earlier with regard to passengers - is safety. The space between aircraft when taking off and landing is the fundamental one with regard to slot control. I am delighted Mr. Geoghegan is chairperson because he will add an extra layer of significance to the daa. With 30 million passengers, does Mr. Geoghegan see Dublin Airport becoming slot-controlled in the next two years? It is a "Yes" or "No" answer. I do not have all the information on it.

Mr. Basil Geoghegan:

I will give the Senator two answers. One is I do not have all the information.

Pádraig Ó Céidigh (Independent)
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That is fair.

Mr. Basil Geoghegan:

The important answer is if we do not develop the new runway and do not address the restrictions around it, there will be constraints on planes landing and taking off in Dublin because we are already at capacity during peak hours. That is what we are trying to address.

Pádraig Ó Céidigh (Independent)
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That is my understanding of it as well. It is better we hear it from Mr. Geoghegan.

Kevin O'Keeffe (Cork East, Fianna Fail)
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When Norwegian Airline was trying to get its transatlantic licence, was Cork used as a carrot given Norwegian was operating on a low-cost initiative? It seemed to be doing tremendous business out of Dublin. Was Cork used as a carrot to lobby the officials in Washington to grant the licence? It dragged out for a while. Any time one reads anything in the press it talks about the necessity for Cork to have a connection to Providence or America. Did Norwegian pull the wool over our eyes in trying to get this transatlantic route up and running? Will Mr. Geoghegan comment on that?

Mr. Basil Geoghegan:

I do not believe Cork was used in any way in that regard. There was a very different set of circumstances. Norwegian is a large airline with a lot of aircraft deliveries and wanted to develop as many new routes as it could. It has talked about developing routes in places as far flung as Argentina. It was about it being able to develop routes. The issue with the US was more about restrictions which the US should have lifted a lot earlier but did not because of certain political pressures in the US. I know from my time at the IAA that the chief executive, Eamonn Brennan, was at the forefront of pushing some of that with the US. I never heard any reference to any tactical use of Cork by Norwegian or anyone else so I do not believe it is the case.

Fergus O'Dowd (Louth, Fine Gael)
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I thank Mr. Geoghegan for his comprehensive replies. As someone who uses the airport frequently, I know it has lots of franchisees that supply goods at different costs. Sometimes I find if one is buying a litre or half a litre for water, one pays an arm and a leg for it. What price control exists? How does the DAA regulate the transparency of the charges and make sure they are fair and equitable once somebody has a licence to operate out of there? Most of them are excellent but sometimes one pays an awful lot of money and gets poor value. One is caught because one has no choice. Will Mr. Geoghegan comment on that?

Mr. Basil Geoghegan:

I will give the Chairman my perspective as a passenger. The model for regulating Dublin Airport is a single till model. It includes profits that the daa makes at the retail outlets it runs. Some of them are concessions and are concessioned out, in which case there is a minimum payment or revenue share. I will defer to the chief executive who is a longstanding retailer and understands how these things work a lot better than me. It is important there is choice so one can spend more or less money. There is some pretty good value to be got at the airport. There are water fountains where one can get a drink of water for nothing.

Fergus O'Dowd (Louth, Fine Gael)
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There might be but the ones I go to are not free.

Mr. Basil Geoghegan:

Dublin Airport is the only airport I know that offers this. When one goes through security, one can put €1 in the box and pick up a bottle of water. It depends on the goodwill of the passengers to put the €1 in. It is very innovative.

Fergus O'Dowd (Louth, Fine Gael)
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It is an issue, notwithstanding Mr. Geoghegan's excellent reply. It is a problem and some people are being ripped off. I have no doubt about that. I appreciate Mr. Geoghegan is not the CEO. Deputy O'Keeffe has invited us to visit Cork Airport in the future. I think it might be a good idea if we meet in Dublin Airport with the chief executive and tease out some of these issues. I will express my concern about the issue. I like what Mr. Geoghegan said about the passenger experience and pressing the red ugly face or the green smiling one. I generally press the green one. It is important for that to be measured in an appropriate way.

Kevin O'Keeffe (Cork East, Fianna Fail)
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Is Mr. Geoghegan aware of the Public Health (Alcohol) Bill and its potential effects on duty-free shops? Is he aware of the labelling issue?

Mr. Basil Geoghegan:

I am aware there is impending legislation but I am not yet aware of what implications it might have for the DAA. With regard to the Chairman's question, we can give full information on it. We would welcome the Chairman and any members of the committee at the airport to discuss any of these matters further.

Fergus O'Dowd (Louth, Fine Gael)
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Before I bring the session to a close I thank Ms Ross and Mr. Geoghegan for coming here and answering the questions in an open and transparent way. The bodies to which they will be appointed as chairperson will be served very well. The public will be very well served too by their capacity to deal with significant and complex issues. We are in good hands under their stewardships as chairpersons.