Jonathan O'Brien (Cork North Central, Sinn Fein)
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Question 28: To ask the Minister for Transport; Tourism and Sport the position regarding the public service obligation air services; his plans for the operational subvention scheme and capital grant scheme for each of the six regional airports; and if he will make a statement on the matter. [8621/11]

Charlie McConalogue (Donegal North East, Fianna Fail)
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Question 30: To ask the Minister for Transport; Tourism and Sport the position regarding the ending of the Derry Dublin public service obligation contract; and if he will consider reversing this decision. [8586/11]

Leo Varadkar (Dublin West, Fine Gael)
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I propose to take Questions Nos. 28 and 30 together.

A decision to reduce to two the number of routes covered by public service obligation, PSO, air services, was taken in line with the value for money review of the Exchequer expenditure on the regional airports programme. This review took account of a number of factors including the performance of the services, the requirement to make best use of scarce Exchequer resources as well as improvements in alternative transport modes and changes in EU legislation covering PSO services.

I can confirm that my Department has formally applied to the European Commission to continue the routes linking Donegal and Kerry with Dublin. It is expected that the new contracts in respect of these two routes will be in place before the end of this year.

With regard to the Derry PSO route, it is not my intention to revisit the previous Government's decision regarding this route and the finance is not available to my Department to do so, in any case. I am considering issues relating to the operational subvention scheme and the capital grants scheme, which also have provided for regional airports. I intend to bring proposals to Government shortly.

In this context it would be inappropriate for me to comment on any future arrangements for these schemes in advance of a Government discussion and decision on the matter.

Dessie Ellis (Dublin North West, Sinn Fein)
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I certainly have concerns about the different issues to do with our airports. Has the expenditure on the airports been reviewed? These services are vital to the well-being of the country and we cannot afford to lose them. I ask the Minister to provide some form of guarantee that we will not lose any more services as such losses would impact upon the areas of job creation and tourism. We need to ensure that our airports are well protected.

Leo Varadkar (Dublin West, Fine Gael)
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The regional airports and the airlines are private entities. As such, I cannot give the Deputy any guarantees on behalf of regional airports or airlines. However, I can say that the PSO for Donegal has been submitted to the European Commission as also has the PSO for Kerry. The money is available for those services and it is a Government objective that those PSOs should be in place by the end of the year. It is anticipated that the advertisement will be published in the Official Journal of the European Union by the end of this month or early next month. It is then up to the airlines to put in bids to operate those services and I hope they will do so.

Last year, 2010, the budget provided €21 million for support to regional airports and this provided for approximately 1.3 million passenger journeys at a subsidy of €40 per passenger. This year's budget was cut from €21 million to €13.4 million so the money available to support regional airports is considerably less this year than last year because of the decisions made in the last budget. There will be pressure to find a mechanism to continue to support regional airports within that spending context.

Charlie McConalogue (Donegal North East, Fianna Fail)
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I thank the Minister for his reply but I am disappointed to hear he does not intend to revisit the Derry PSO which was terminated under the previous Government and was a decision with which I disagreed. It is welcome that the Donegal PSO will continue as this is important for Donegal and west Donegal in particular. However, the Derry PSO is particularly important for the northern Donegal area and for the north-west region. I know things are difficult financially but over the past number of years, the Irish Government put a significant investment into Derry Airport, amounting to several million euro. I do not accept the logic of either the current Government or the previous Government in having invested in Derry and then not following through as this is a very important service.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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Has the Deputy a question?

Charlie McConalogue (Donegal North East, Fianna Fail)
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I will have a question. I refer to the other transport facilities in the north-west region, rail and road services. I emphasise the importance of the A5 project from Derry to Aughnacloy and the need to work with the Northern Government to enhance and integrate the rail services from Derry to Belfast and on to Dublin. I ask if the Minister has any plans for the rail service or if he has had any contacts with his Northern counterparts in an effort to improve that rail service, considering the unfortunate position that he does not intend to revisit the Derry PSO decision.

Leo Varadkar (Dublin West, Fine Gael)
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I appreciate Deputy McConalogue's view on this matter but if the previous Government did not have the money to provide a PSO service to Derry and the economic situation has deteriorated since then, I am sure he can understand why I do not have the money to restore a PSO service to Derry. Ultimately it came down to a choice. There can only be one service for the north west and it was a choice between Carrickfin or Derry and frankly, in my view, Carrickfin was the right choice. It is not necessarily a matter of logic but rather a matter of money.

I acknowledge it is very important to retain a PSO to Donegal precisely because it is isolated and there is neither motorway access nor rail access to the county. This is the reason both the Government and I regard it as important that the PSO be retained.

On contacts with Northern counterparts, a meeting was scheduled with Conor Murphy MLA, my counterpart, but the meeting was cancelled by them as the elections are under way in the North. We anticipate that in May there will be a meeting of the North-South Ministerial Council and a bilateral meeting with the Northern Minister for Transport and all those issues will be discussed.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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It seems to me no economic or social impact analysis has been carried out about decisions made to cut expenditure on services. I am familiar with Sligo Airport and I know the number of people employed there. I know the value of that airport. The PSO service has been withdrawn from it and in all probability, flights between Sligo and Dublin-----

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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We are not talking about Sligo at the moment; we are talking about Derry.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I have a question. As well as looking at the amount of money that needs to be saved, will the Minister and his Department take into account the loss of employment with the consequential movement of those people onto jobseeker's allowance or jobseeker's benefit? There will be a reduction in tourism potential in the region because people like to be able to fly into an area from abroad. Finally and most important, industrialists considering setting up in an area want a good air service. A proper economic and social impact analysis would allow different choices and different judgments to be made. I ask the Minister if he will insist those factors are taken into account.

Leo Varadkar (Dublin West, Fine Gael)
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A value for money review was carried out and those different aspects were taken into account in that study. I do not wish to be blunt but I need to be blunt. The country is in receivership. We are way past the stage where we can do things on the basis of cost-benefit analyses. In the past when the country was not in receivership one could decide to spend €2 million and down the line that €2 million would generate €6 million or €7 million for the wider economy. We are not in that position any more. We do not have the €2 million in the first place; in fact we have minus €2 million. The context in which we are now making decisions is very different from what it was. The first question we need to ask ourselves is how much money do we have. We then need to decide how we should arrange expenditure within that constrained budget. That is the context in which decisions have to be made. We have to cut our cloth to suit our measure. That is the reality we face.