Séamus Brennan (Dublin South, Fianna Fail)

After enactment of the legislation two companies will be established which will be designated as the Cork and Shannon Airport authorities and these companies will, in due course, own and operate their respective airports once sufficient distributable reserves are available to transfer the relevant assets. Prior to the assets being vested in those two companies their boards would be charged with preparing to assume responsibility for the management and development of the airports as well as being empowered to undertake functions delegated to them, on an agreed basis, by the Dublin Airport Authority in relation to their respective airports during the interim period.

On the basis of the agreed sequence for the distribution of assets and compliance with the Companies Acts, the assets would then be distributed on or after 30 April 2005 when the Minister for Transport and the Minister for Finance, on the appropriate advice and subject to the appropriate resolutions of the distributing and receiving boards, are satisfied that operational and financial readiness has been achieved. The legislation provides that the required appointed day which triggers the vesting of assets in the airport authorities will be designated by ministerial order subject to the consent of the Minister for Finance. The formulation of comprehensive business plans by the new boards will be a key aspect of achieving operational and financial readiness and each authority will be required to submit to the Ministers for Transport and Finance for approval comprehensive business plans in respect of its airport.

As for Dublin Airport, the legislation provides that Aer Rianta cpt will be renamed the Dublin Airport Authority and will be given a formal mandate to take all appropriate measures to restructure the company. This new mandate will lead to the statutory replacement of the current Aer Rianta board members by the new airport authority board. The new Dublin board will, therefore, have a highly sensitive and important role, to act in accordance with Government policy and in doing so to ensure that the financial health of Dublin Airport authority remains a priority for the directors and management. The Dublin Airport authority will also have the important task of formulating a strategic business and investment plan which will form the basis for an application to the Commission for Aviation Regulation for a new aeronautical price determination for Dublin Airport.

The steps outlined, which are necessary and prudent to ensure that the restructuring process is undertaken in full compliance with the capital maintenance provisions of company law, should also reassure employees of Shannon and Cork Airports that operational and financial readiness is a prerequisite for assets, including staff, to be vested in the new airport authorities.

I will now briefly highlight some major elements of the Bill. Part 2 focuses on the corporate governance and company law aspects of restructuring of Aer Rianta and the steps necessary in the transition to full autonomy. To the layman, many of the provisions may seem a bit arcane but in reality any business restructuring has to conform to highly technical processes that protect capital maintenance under company law. Section 5 provides for the Minister, with the consent of the Minister for Finance, setting by order appointed days in respect of Cork and Shannon Airport Authorities and provides that these orders will not be made before 30 April 2005. Before making an order setting the appointed day for Cork or Shannon Airport authority, the Minister and the Minister for Finance will have to be satisfied as to the operational and financial readiness, including business planning, of Dublin, Shannon and Cork Airports.

The Dublin appointed day, which is also the date Aer Rianta is renamed Dublin Airport authority, is the day an order is made extending the principal objects of the company to give effect to the restructuring. Section 6 provides for the establishment of the Dublin, Cork and Shannon Airport Authorities. On the Dublin appointed day Aer Rianta cpt. is to be re-named Dublin Airport Authority plc. Following enactment of the legislation, the Minister, following consultation with the Minister for Finance, will form two companies — Cork Airport Authority plc and Shannon Airport Authority plc.

Section 7 contains wide provisions allowing for the restructuring of Aer Rianta by either the Dublin Airport authority or the Minister or a combination of both, subject to the capital maintenance requirements of Part IV of the Companies (Amendment) Act 1983. The section includes a range of general enabling provisions covering all the powers which may be required to give effect to the restructuring, including making appropriate orders and giving directions to the airport authorities.

Section 8 sets out the powers of the airport authorities in relation to the relevant airport before and after the applicable appointed day. From their appointed days the Dublin, Cork and Shannon Airport Authorities will have the relevant airport assets vested in them and take full responsibility for the management, operation and development of their respective airports. Each airport authority will be required to ensure the provision of necessary services and facilities at its airports.

In advance of the relevant appointed day Cork and Shannon Airport Authorities will be required to prepare and submit for approval business plans for the management, operation and development of each airport and associated with this process Dublin Airport authority will also submit for approval a business plan for the management, operation and development of Dublin Airport. Pending the Cork and Shannon appointed days, Dublin Airport authority shall enter into such arrangements for the delegation of functions to the Cork and Shannon Airport Authorities as may be agreed between the parties. Any legislative function of the Dublin Airport authority necessary for the discharge of a delegated function is to be regarded as a function of the Cork and Shannon Airport Authorities, as appropriate.

Section 9 confirms the commercial mandate of the new airport authorities. The statutory duties being applied to the airport authorities are consistent with the duties applying to Aer Rianta under the 1998 Act. Section 9(6) provides for the extension, by ministerial order, of the principal objects of Aer Rianta to include doing all things necessary to effect the restructuring of the company and this becomes the Dublin appointed day. The Dublin appointed day is the trigger event for all the key provisions of the Bill.

Part 3 deals with complementary regulatory aspects and comes into operation on the Dublin appointed day. The Bill will make appropriate changes to the Aviation Regulation Act 2001 as considered necessary to effect the restructuring process and to complement the reforms I have described. Areas of change include the objectives of the Commission of Aviation Regulation in making a determination on maximum airport charges, the duration of such a determination and significantly the removal of Cork and Shannon from the scope of price cap regulation. Under the restructuring it will no longer be appropriate to price regulate Cork and Shannon Airports because they will not have market dominance in the way that Dublin has and will continue to have.

Under the proposed legislation, it will be a function of the Commission for Aviation Regulation, in making a determination in respect of maximum airport charges, to adhere to three primary objectives as set out in section 21(4) of the Bill which is, in effect, an amendment to the Commission's current remit. In making a determination the objectives of the Commission would be modified under the State Airports Bill as follows: to facilitate the efficient and economic development and operation of Dublin Airport to meet the requirements of current and prospective users of Dublin Airport; to protect the reasonable interests of current and prospective users of Dublin Airport, and to enable Dublin Airport authority to operate and develop Dublin Airport in a sustainable and financially viable manner.

It is my intention that these primary objectives will oblige the Commission to balance economic efficiency, the reasonable interests of users and to ensure the airport's financial sustainability in a way that will promote the long term development of Dublin Airport having regard to its contribution to the Irish economy. It should be noted that the Commission will be required to conclude a new price determination for Dublin within 12 months of enactment of the Bill. It will be a matter for the Commission as independent regulator to make an appropriate determination based on its new mandate. I am happy the amendments to the regulatory framework will enable the Commission to weigh up the need for long-term investment against the promotion of operational efficiency at Dublin Airport. The amendments strike an appropriate balance between the interests of the various stake holders in the airport.

In summary, the policy which underpins this legislation has been well developed and is fully in line with the forward looking policies of Government to strengthen our transport infrastructure, promote efficiency in service provision and boost balanced regional development. The reforms provided for in the Bill are focused on developing Dublin, Cork and Shannon Airports, increasing airline business and significantly growing passenger traffic levels and jobs. The only sensible way to provide sustainable jobs going forward is to grow the business at the three State-owned airports. Under strong and focused regional leadership, Shannon and Cork Airports will have a fresh start. I have confidence in those regions and their people to develop separate business strategies and concentrated marketing initiatives.

The new Dublin Airport authority, combining international and national aviation expertise with proven financial and business acumen will focus on meeting the urgent need for increased capacity at the airport. There has been strong support at national and regional level for restructuring. The support at regional level has been particularly evident before, during and after a number of visits by me to the Shannon, mid west and Cork regions. The plan also has strong support from public representatives, regional authorities, local authorities, SFADCo, Chambers of Commerce and consumer organisations.

I thank the Seanad for taking time to consider this legislation. I commend the Bill to the House.