Wednesday, 7 June 2006
Question 168: To ask the Minister for Transport if his attention has been drawn to when the new terminal at Cork Airport will be fully operational; if he is satisfied regarding its delayed opening; and if he will make a statement on the matter. [21923/06]
I propose to take Questions Nos. 59, 135 and 168 together.
As stated previously, funding of the new Cork Airport terminal will be obliged to take account not only of what is commercially and financially feasible for Cork Airport but also of what is commercially and financially feasible for Dublin Airport. Future plans for both Shannon and Cork as independent airports must have regard to the capacity of each to contribute to its own capital investment programme.
Under the State Airports Act 2004, before assets can transfer to the Shannon or Cork airport authorities, both the Minister for Finance and I must be satisfied as to the financial and operational readiness of both bodies. Accordingly, each of the three airport authorities is required to prepare a comprehensive business plan and obtain our joint approval for these plans before assets can be transferred to the airports. The three airport authorities are working on the preparation of these plans, with the Dublin Airport Authority, DAA, co-ordinating the process. A range of issues need to be carefully considered in this work, including the optimum mechanisms for the financing of the new terminal in Cork and the allocation of airport assets among the three airports.
These are complex issues that the airport authorities must consider carefully and, as stated previously, I have not imposed artificial deadlines for the completion of this process. My Department will continue to liaise with all three authorities on the business planning timetable, taking account of the key issues that I have mentioned. The capacity of Cork Airport to operate on a fully commercial basis will be fully assessed as part of this process and will be factored into the decisions to be made. I look forward to the finalisation of the business planning process because of its importance in facilitating the development of dynamic, independent and financially sustainable State airports. The Government objective of airport restructuring will be achieved in a manner that underpins the financial sustainability of all three State airports.
The delay in the opening of the new terminal at Cork is an operational matter for the DAA and Cork Airport Authority and I have no statutory functions in this regard. However, I understand that construction of the terminal will be completed within a matter of days.
The Minister's predecessor stated in the House that, when established on a statutory basis, the independent Shannon and Cork authorities would both "commence business free of debt". At the time, he also inquired whether anyone believed he should allow Cork Airport to pay off the debt while still developing an airport and stated that the burden of the debts in question should be lifted from the shoulders of the airports to allow them to develop properly into the future. What was the basis of that commitment? Was it Government policy three years ago? If so, what, other than the appointment of a new Minister, changed? Was the Minister of the day speaking on behalf of the Government?
Nothing has changed. I am in the same position as my predecessor. People have selectively quoted from various documents but the opening contribution to the debate on the State Airports Act 2004, provides absolute clarity. I agree with the board of Cork Airport, which wants its independence much earlier than was envisaged when the legislation was introduced. It would be good if that were achieved but a number of complex issues must be addressed, such as the distribution of assets and the reserves that must be in place to facilitate this. Cork Airport is in a good position because it has a new terminal and, in light of the growth in the market, it can quickly become fully independent. If any changes were made, they concerned the timeframe because, while it had been understood Shannon would be facilitated first, followed by Cork, the board of Cork Airport has considerably shortened that timeframe. I agree with that decision but it will give rise to different challenges in terms of achieving the target.
My predecessor's statements accord with mine. Cork, Shannon and Dublin airports have to remain financially viable and must be turned into commercial successes. The three boards and my Department are engaged in that process, with the advice of a myriad of advisers, and will reach a conclusion once the areas of disagreement are resolved. This is not a game and serious financial issues are involved for the airports and their customers. I have every intention of ensuring Cork Airport is in a strong commercial position when it becomes independent and the same applies for Shannon and Dublin airports.
Does the Minister agree this Government's cock-up and betrayal of a promise made by a Minister in Cork will result in the imposition of significant charges on passengers travelling through Cork Airport? Does he further agree that the level of debt forms a noose around the neck of the Cork Airport Authority which will hinder future growth?
At a formal meeting in Cork last November, we were told by authoritative sources that the terminal would be ready by December but, due to operational reasons, would not open until January. We were then told in January that it would open in time for the Easter travel period. Now we are being told it may not open until September or October. Will the Minister get his Department's act together to deal with this appalling time delay? The extension of the completion date from January to September defies explanation. Will the Minister make a clear statement with regard to these events?
Will he take a strong line with the Dublin Airport Authority in respect of the arrangements it is imposing on Cork? Dublin Airport Authority cannot even get its act together to erect a marquee on the roof of its own terminal, yet by putting its heavy hand on Cork Airport, it caused the development of the new terminal to be delayed by nine months. Will the Minister make a statement on this delay and the implications for the future development of Cork Airport?
I understand the terminal will be completed in a matter of days. Deputy Allen may be expressing a lack of confidence in the board of Cork Airport arising from its inability to meet the deadlines it gave to the Deputy and others over the past eight months.
I would have preferred that the Cork Airport terminal development had been delivered on time and within budget. While I will await the outcome of the matter, it is certainly not on time and does not appear to be within budget. That is somewhat disappointing but the reality is we have to take account of these issues.
We can be confident that Cork effectively has a new airport, which will bring tremendous benefits to Munster and the south. The success of this fantastic new facility will be important. It will attract millions of passengers to Cork and I do not doubt the airport will attempt to dramatically expand its short-haul services and take advantage of new long-haul destinations. That is all good news. We must focus on the future in a sustainable way with an active, commercially viable Cork Airport with a sound financial base. Everybody involved in this process wants that and I am determined to deliver it.
Does the Minister agree that certainty on Cork Airport is urgently needed? He has not answered my question on whether this commitment was given by his predecessor. "Yes" or "no" will suffice. Does he agree or will he comment on what Mr. McGann recently said, that the Dublin Airport Authority would need approximately €300 million of distributable reserves before the airports could be split up? What are the gross borrowings of the airport? Is it true that they stand at €472 million? Does he plan to introduce legislation if they exceed €700 million?
As the Deputy has raised a range of questions that were not part of the question I have answered, I do not have some of the specific answers. If the Deputy will put down a question I will get the specifics for him. Cork Airport is ready to go and we must make a decision. We cannot operate State companies outside the companies law.
That was stated on the record in this House. The issue of having distributable reserves is complex. It is fine by me if we wait until all the distributable reserves are available to Dublin Airport. The board of Cork Airport does not see it that way. It does not want to wait and it is right. It wants to become independent quicker. If we want to wait for that timeframe to be completed we can have everything on our wish list. In the meantime Dublin Airport will have to run Cork for the foreseeable future.
When it comes to aviation the Minister is always one peg short of a tent. A political decision must be made. Dublin, Shannon and Cork airports cannot produce realistic business plans. The Minister says he will not put pressure on them to produce business plans and will give them an indefinite timescale. It will be an indefinite timescale because they cannot make a business plan until they know how the debt is to be apportioned. The airports need to know. Cork Airport has already lost flights. Dublin Airport needs to know what it has to invest in its enormous and delayed expansion plans. The Minister is the only person who can make a decision. We read in today's newspaper that Dublin Airport has decided to postpone a decision. To put it back in the Minister's lap it is getting another report, which it will send to the Minister because the airports cannot make that decision. It is a political decision and it must be made politically. It is down to the Minister to make it. He must do more than make announcements and re-announcements.
I disagree with the Deputy. She knows well that I have made all the decisions and will make the decision on Cork and Dublin airports. I would prefer if people on both sides of this argument took the political baloney out of this. I choose my words carefully. It would be easier to resolve if they did, but some people chose to make a political football of this——
——and this was to the detriment of good, sound, financial business decisions being made. I have met Cork Airport management on every occasion on which they have sought to meet me. I have had numerous meetings with them. I made arrangements for them to go to London recently, where they met people who are analysing their future. That was a successful meeting. They asked me to facilitate it and I did so. Those reports are being concluded and will be sent to me. I have not received them, and the board of Cork Airport asked me to allow its input into the conclusion of those reports before I made a decision. I agreed to that from the point of view of both Cork and Dublin airports. Those reports are almost finalised and I will make the decision the minute I get them. I hope everybody will support the decisions.
I warn the Minister that he is following the same road he did with his electronic voting debacle. He lectured the Opposition about playing political football and accused us of being Luddites. He is using the same tactics now. Former Minister for Transport, Deputy Brennan, introduced the only political element when he wrote a letter saying Cork Airport would inherit a terminal debt-free. It is as clear as that. I do not know what else the Minister is reading into it. The people of Cork expect a political delivery on this. I differ with the Minister when he says Cork will have a new airport. Although Cork will have a new terminal, its future growth will be stymied by the fact that it needs extra capacity for airport stands and runway expansion. That cannot happen unless the burden of debt is lifted. The Minister should not tell us we have a new airport. We have a new terminal, which is approximately eight months overdue, and a potential debt of almost €200 million. We need clear-cut statements. It is make your mind up time for the Government because it was a Government decision and statement. When will the terminal open for operations and when will the Minister make a decision on the debt?
Cork Airport wants a debt in excess of €200 million to be landed exclusively at the door of the Dublin Airport Authority. I do not know what the north Dublin Fine Gael Deputies or hopeful Deputies feel about that.
The game-playing that goes on with Fine Gael trying to play off both is unsustainable, as Deputy Allen knows. We will have a conclusion on this in the next few weeks. I told Deputy Allen the terminal will be completed in the next few days. I did not say when it would be opened.