Bernard Allen (Cork North Central, Fine Gael)
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I want to give two minutes of the time available to me to Deputy Stanton.

Séamus Pattison (Carlow-Kilkenny, Labour)
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Is that agreed? Agreed.

Bernard Allen (Cork North Central, Fine Gael)
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The former Minister for Transport, Deputy Brennan, clearly indicated that the construction costs of the new terminal at Cork Airport would not be a burden on the new Cork Airport Authority. In recent weeks, however, there is much concern that the Government is planning a U-turn on this commitment that could leave Cork Airport saddled with up to a €200 million debt, leaving the new authority with a severe financial burden. Despite these reports, no official explanation has been forthcoming from either the Minister for Transport, Deputy Cullen, or the Taoiseach. We have been informed, however, that a mediator has been appointed by the Minister to deal with this issue even though we have not been given the terms of reference to which he or she will work.

An emergency meeting of the south-west regional authority airport consultative committee was held last Friday to discuss the former Minister's commitment, given in writing in late 2003. That commitment was that Cork Airport would be fully developed and that it would be debt-free. However, the Minister of State, Deputy Batt O'Keeffe, who is in the House this evening, at that meeting claimed that the former Minister for Transport, Deputy Brennan, may have made a mistake in promising that the new airport authority would start its independent operations without debt.

Batt O'Keeffe (Cork South Central, Fianna Fail)
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I did not, the Deputy should not misquote me. I said there might have been a proviso.

Bernard Allen (Cork North Central, Fine Gael)
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This nonsensical defence of a promise made and reneged on is incredible, especially when the Minister of State is suggesting that the former Minister, Deputy Brennan, would have given such a commitment without checking its legal status. Any decision on the future of the debt would have been made at Cabinet level and it seems that another political promise to the people of the southern region is being broken.

Failure to honour the commitments given would seriously inhibit Cork's capacity to develop the airport to its full potential. If this matter is not sorted out, the debt burden on Cork will have the most serious consequences and implications because it is inevitable that the burden will be passed on through increased costs to the carriers and travelling public. If this happens, I fear for the future of the relationship between the airport and the carriers that use the facility. I have been told that as of now, operators are being informed of increased charges and instead of attracting new carriers, operating new routes and offering new services to the public, Cork Airport will find it impossible to hold on to its current business, as a result of which we will lose operators and routes out of Cork. What about the Government's spatial strategy where Cork is identified as one of the main gateways? All we have seen is double dealing. I demand an immediate political decision that will allow Cork Airport to proceed with the development of its business without the burden of a massive debt.

The Minister, Deputy Cullen, should clear the air once and for all on this political issue. Political decisions were made to construct a new terminal at Cork Airport which we all applauded and supported. Political promises were made to the effect that the cost of the new terminal would not have to be borne by the Cork Airport Authority. This political commitment must now be delivered on by the Government.

David Stanton (Cork East, Fine Gael)
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I thank Deputy Allen for allowing me to share time. I support him and congratulate him on raising this issue. I wish to stress the importance of the airport, not just for the city but for the county and the wider Munster region. I, too, was at the meeting of the South West Regional Authority which was very well attended and where huge concern was expressed about the doubt regarding the debt and the burden it would place on the development and future operation of the airport. I call on the Minister to clarify the situation and to state clearly where the airport stands. It will be very difficult for the airport to format a business plan with this uncertainty hanging over it. Dublin and Shannon airports are way ahead in terms of development. Cork Airport is only catching up at this stage.

I was concerned initially when I heard about the break-up of Aer Rianta as to how future development would be financed because the airport has reached capacity. I do not know how management copes with the small terminal, which it has done up to now. Further development will be required. The area is expanding and it is important for the country as a whole that this happens because it will act as a counter-balance to Dublin. We know the problems Dublin has with traffic congestion and so on. Cork Airport is extremely important to the development of the area.

Promises were made and they should be kept. Cork Airport should be allowed to start debt-free and to move on from there. I am confident that if this were the case it would develop in a positive way in the future but I am worried that if the debt is imposed it would stifle growth and, as Deputy Allen has said, perhaps lead to the airport going into decline. We cannot allow this to happen.

I urge the Minister to clarify the situation about the future of Cork Airport in clear and unambiguous terms.

Martin Cullen (Waterford, Fianna Fail)
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I thank the Deputies for raising this matter. To be helpful, if they have not done so, I invite them to read the Second Stage speech of the then Minister during the State Airports Act when this issue was set out in great detail. It would be helpful if they did so because nothing has changed since the details were set out in that speech.

The major new airport development project which is currently being completed will effectively deliver a new landside airport to Cork and represent the first major upgrading of all facilities since the airport was built in the late 1950s. The project comprises a new terminal building development and also involves the construction of new multi-storey and surface level car parks, a new fire station, new internal road systems and the upgrading or replacement of all utility services — water, gas, electricity etc.

When completed, the new Cork Airport will have a passenger capacity of 3 million people with the facility to expand to 5 million, when needed. It is important the debate about Cork Airport's future debt should not obscure this major development for the airport. Such facilities will greatly benefit the airport's users but will have to be funded. Cork Airport's future as an independent airport has to take account of a realistic assessment of what is commercially feasible, including the capacity of the airport to contribute to its capital investment programme.

In recognition of these commercial realities, the State Airports Act 2004 provides a framework for an orderly approach to the distribution of the assets of Shannon and Cork airports in conformity with the provisions of the Companies Acts. The Act also addresses business planning issues.

The boards of Cork and Shannon airports are now charged with making preparations to assume responsibility for the ownership and development of the airports. They are also empowered to undertake certain management and operational functions, on an agreed basis with the Dublin Airport Authority, during the interim period.

Under the Act, before any assets can transfer to either the Shannon or Cork airport authorities, the Ministers for Transport and Finance will have to be satisfied as to the financial and operational readiness of the airport authorities. Accordingly, each airport authority is required to prepare a comprehensive business plan and obtain the Ministers' approval for these plans before any assets can be transferred. Such plans would address the funding of capital investment and feed into decisions on determining the mechanisms for allocating airport assets among the three airports.

Cork Airport will benefit greatly from the major investment currently being made in the development of its facilities. The business planning process will provide a basis for determining the most feasible options for carrying through the restructuring. The ability of both Shannon and Cork airports to operate on a fully commercial basis will be fully assessed as part of this process and will be factored into the decisions made.

To clarify a point made by Deputy Allen, I have not appointed anybody. It is not my function to do so. I understand that both the Dublin Airport Authority and Cork Airport have agreed recently to retain an independent consultant to assist them in the finalisation of the Cork Airport business plan. I await the outcome of this work because of its importance in facilitating the development of a dynamic, independent and financially sustainable Cork Airport. The Government objective of airport restructuring must be achieved in a manner which underpins the financial sustainability of all three State airports, which fundamentally includes Cork Airport.