Billy Kelleher (Cork North Central, Fianna Fail)
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I welcome the opportunity to raise this issue. The debate is timely in view of the fact that the three airport authorities were before the Joint Committee on Transport last week to discuss progress regarding the State Airports Act 2004, the break-up of Aer Rianta and the distribution of capital costs of developments to the various airports.

It is important to note that Cork Airport has been very successful to date. There has been a great increase in the throughput of passengers recently. It has now reached 2.25 million passengers per year, and projected growth puts that at 3 million. It is therefore important that we recognise that Cork Airport, first and foremost, has marketed itself very effectively. It is a strategic part of the region and its development regarding employment and foreign investment. When this issue was first debated, there was a strong objection from Aer Rianta to Cork Airport securing a new terminal, and many local Deputies fought with it to secure funding. The previous Minister for Transport, Deputy Brennan, strongly supported that project. The assumption was that, at the final stages, Cork Airport would get its new terminal but that the capital costs of providing it would not be passed on to it.

The Minister of State taking the debate, Deputy Callely, would have been very aware of that, having also been a great supporter of Cork Airport over the years. I know he will take a personal interest in this. Given that he is now in the Department of Transport, I hope he will understand the concerns and anxieties of people in Cork, particularly staff and management, who have gone to great efforts in recent years.

Cork Airport has been a very profitable part of Aer Rianta. When other developments were going ahead in Aer Rianta, Cork Airport's finances funded some of them. With the shoe on the other foot, it is time it acknowledged that Cork Airport has not received fair investment over the year, and now that we have achieved the new terminal, we should not be burdened with an excessive debt that could kill its commercial future. When the previous Minister appointed the board members to Cork Airport Authority, I genuinely believe that they were also under the assumption that the capital costs would not be borne by the airport in the event of a break-up. I know there is company law and that the State Airport Act requires that the transfer of assets also be taken into account. However, whatever measures are in Cork Airport's business plans, they should be adjudicated on the original Government policy assumption that it would be free of the debt for the development of the new terminal. I highlight that because I have genuine concerns about the thrust of a recent debate at a meeting of the Joint Committee on Transport, at which representatives of the Dublin, Shannon and Cork airport authorities were present. Some people insisted that Cork Airport should introduce business plans to fund the capital cost of the development of the terminal. That would be unfair as it would represent a reversal of previous Government policy when it was decided to sanction the development of the new terminal.

Most people in Cork have a strong attachment to the airport. They realise that it has a major impact on the financial vibrancy of the Cork region. Figures are available to indicate that the airport is growing rapidly, mainly as a result of strong and aggressive marketing of the airport by its management and the commitment of its staff. The airport is used by a large swathe of the population outside Cork. Its catchment area will increase as the roads infrastructure to the north of Cork city improves. I am concerned that officials from other airports might try to saddle Cork Airport with as much debt as possible because they see it as a threat. As a public representative of the Cork area, I cannot accept that.

I am aware of the Minister of State's strong attachment to Cork and to the airport in particular. I am sure he will listen to the views of public representatives from Cork, the chambers of commerce of the Cork region and the members of the board of the Cork Airport Authority. There is deep concern and anxiety in Cork about this matter. If we are serious about the break-up of Aer Rianta, we need to tackle the many obstacles which exist. The Government needs to ensure that it complies with company law and that the three airports are solvent. Issues relating to the debt ratio and capital costs also need to be assessed. The commitments which were made should be honoured when business plans are submitted to the Cabinet for its approval.

Ivor Callely (Dublin North Central, Fianna Fail)
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I thank my good friend, the assistant Government Whip, Deputy Kelleher, for raising this issue. I support the sentiments he expressed in respect of certain issues, such as Cork Airport's debt. I agree that we should not stifle or kill off the potential for growth that exists at the airport. The Deputy and some of his local colleagues are concerned about the growth of Cork city and the Cork region. I look forward to working with him to ensure that Cork develops in the way we would like.

Like Deputy Kelleher, I congratulate Mr. Joe O'Connor and the staff of Cork Airport on the work they have done to facilitate the growth and development of the airport which is one of the fastest growing regional airports in Europe. The number of passengers passing through the airport has increased threefold over the last ten years, from 800,000 passengers in 1994 to 2.25 million in 2004. The airport is served by a number of scheduled airlines, including three Irish airlines, Aer Lingus, Ryanair and Aer Arann. New routes have been added and a further significant increase in services to and from UK and European destinations is expected this year. Cork Airport was voted the best Irish airport in 2004 for the third consecutive year in a poll conducted by the air transport users committee of the Chambers of Commerce of Ireland. I heartily congratulate all involved.

The Cork Airport development project that is under construction will, in effect, deliver a new landside airport. It represents the first major upgrade of the airport since it was built in the 1950s. The new terminal building will accommodate a vast array of appropriate state-of-the-art facilities. It is expected that the terminal will be completed, as promised, by the end of 2005. I do not doubt that it will contribute significantly to the economic, social and cultural life of Cork. The airport's business park, part of which was designed by a horticulturist from Clontarf, has been developed in recent years. There are more than 20 buildings on the site which is a joint venture arrangement involving the airport and the private sector. I understand that it has been highly successful.

It is clear that the outlook for Cork Airport is positive. The current objective is to continue to develop the business on a sound economic basis. The Government's policy is to restructure the three State airports, to give greater autonomy to Cork and Shannon airports and to promote development in each region. The former Minister for Transport, Deputy Brennan, enacted the State Airports Act 2004 to facilitate the restructuring. In accordance with the 2004 Act, the transfer of assets to one of the two new airport authorities cannot take place earlier than 30 April 2005. A phased approach thereafter will allow one of the new authorities to be vested first with the second being vested after sufficient distributable reserves have been built up within the Dublin Airport Authority.

The preparation of a comprehensive business plan by the Cork Airport Authority is a central element of the preparatory work being done in advance of the separation of Cork Airport from the Dublin Airport Authority. Business plans are being prepared by the Dublin and Shannon airport authorities. All three business plans will have to be assessed. It is expected that certain issues will have to be discussed between the authorities before any final decisions are made. As Deputy Kelleher said, the State Airports Act 2004 requires that the Ministers for Transport and Finance must be satisfied about the operational and financial readiness of the Shannon and Cork airport authorities, including business planning, before the assets of each of the airports can be vested in the authorities. Deputy Kelleher also mentioned some technical company law and accounting requirements in that context.

The phased approach for the transfer of assets provided for in the State Airports Act 2004 is designed to cater for the fact that the distributable reserves available to the Dublin Airport Authority are insufficient to transfer assets to both Shannon and Cork. The timing of the transfer of assets will depend on the availability of distributable reserves in Dublin. Under one of the options for the separation of Cork Airport, the airport authority will have no bank debt at the time of the separation but it will have to enter into a finance lease with the Dublin Airport Authority in respect of a portion of its assets. Cork Airport has benefited greatly from the major investment made in the development of its facilities. The finance lease option would allow the Cork Airport Authority to take full responsibility for the management and operation of the airport at as early a stage as possible and to drive future growth using the platform provided by the new facilities. I look forward to working with Deputy Kelleher in that regard. I hope my comments have been helpful.