Brendan Ryan (Labour)

I move:

That Seanad Éireann:

—noting the commitment of the Government on 10 July 2003 that following the break up of Aer Rianta, "Shannon and Cork are being given a new debt free start" and that "the existing debts associated with both airports, including the debt associated with the major new investment programme at Cork, will not be assigned to the new companies";

—alarmed by the current equivocation of the Government on the debt status of Cork and Shannon airports;

—aware that the threatened debt burden threatens the future viability of both Cork and Shannon airports;

—calls on the Government unequivocally to renew the commitment entered into on 10 July 2003 and allow Cork and Shannon airports to "commence business free of debt".

During my time in this House, I have rarely moved motions that have a local resonance for the area in which I live. It has not been my style. However, sometimes one is confronted with such a blatant act of misgovernment which applies locally that one has no option. I rarely bother wasting my time reading out a motion. This motion is essentially concerned with a commitment given by the Government. I could take up the whole of my 12 minutes citing the succession of occasions on which the Government committed itself to a specific course of action regarding Cork and Shannon airports, but I have more to do.

When it first announced its decision to break up Aer Rianta, the Government stated that the existing debts associated with both airports, including the debt associated with the major new investment programme in Cork, would not be assigned to the new company. It also stated that Cork and Shannon airports would be allowed to commence business free of debt and so on. I do not think anyone believed the Government at the time, except the ideologues in the business press who always believe that doing something with a State company is an improvement because they believe State companies are no good, therefore, if one does anything, it must improve them. Following the Eircom debacle, and the skilful capacity of that company, recognised by the international financial press, to outmanoeuvre our regulator, one would have hoped that we might have learned that sometimes State companies, however slow-moving, can at least be told to do things.

I could recite more quotations but I do not wish to do so. The Leader of the House said that the legislation which brought about the break-up of Aer Rianta was rushed, premature and not so good. As leader for the Government, she had to be restrained, but what she said was a good brief summary.

However, one statement deserves to be put on the record:

This is unnecessary legislation which is badly conceived and badly thought out. I very much regret that it will inevitably pass in this House this week and eventually become law despite the many reservations about it on all sides of the House. If we pass this Bill, it will be a bad day for Ireland, and a very sad note on which to end this session. I believe the Minister has some reason that he has not told us about. I hope he will break it to us before the end of this session.

This is a politically charged statement, which is pointed and blunt. It sounds like something I would say. The Minister, Deputy Cullen, is used to me saying such things, and worse. However, that statement was made by my colleague, Senator Quinn, who is a very successful figure in the Irish business world. He is a champion of private enterprise and a great believer in the value of competition. Nevertheless, he is profoundly wary of this policy. I do not think the Government should be guided always by Senator Quinn but it would have been worthwhile to have a specific response which would satisfy the business judgment of a person of such proven record and ability. No such response has been given.

What most characterises the Government's position since the putative break-up of Aer Rianta is that there was no response other than an assurance that it should be trusted because it knows what it is doing, and somewhere along the way it will get better. We still do not know what motivated the Government. The policy was inherently contradictory from the moment it was announced. I would not have agreed with it but I would have understood a decision to privatise our airports. I would have seen the logic of it. I would have thought it was daft and ideologically driven, but I would have seen the sense of it.

However, the Government imposed a series of constraints on our three international airports and fiddled around with a significant amount of debt to attempt to create an impression that two out of the three airports, which are relatively small, are commercially viable and that the third is so commercially powerful that it could sustain the debt of all three. It ignored advice already available that company law would make what was promised impossible. It talked good and decent people in the Cork region into becoming directors of a company which they now fear is not viable. However I might disagree with it, it would be nice to believe that the decision was based on some kind of forward-looking sense of the role of the private sector, private investment and a thrusting competitive market economy. I could deal with this because I would know if it was successful or unsuccessful. However, this was an attempt to create an impression of thrusting competitive individualised airports, while at the same time dealing with the fact that in terms of crude commercial reality, the scale of the debt and the scale of the turnover meant that the policy was internally contradictory.

Cork Airport has approximately 2.5 million passengers a year. A figure of 2.7 million passengers is predicted for the coming year, but let us look back to when the Minister made his announcement. Cork Airport could be saddled with a debt of €140 million. The Minister may not mention debt at all in his script — it is not mentioned in the amendment. Seanad Éireann needs to amend its Standing Orders so that amendments should at least have something to do with the motion. That is the least service the Government could do to Seanad Éireann, regardless of who is moving the motion. If the Government wants to amend a motion, the amendment should deal with the topic under discussion, because none of us doubts there is significant growth in air traffic. Who argues against that? We did not say there is not such growth. None of us wants to do anything other than commend the board. Its members are doing their best and are public servants in the best sense of the word, for limited reward, because they want to make something successful. We all know there is a need for continued investment and that Cork would benefit from new investment. We also know what the Government said in 2004. However, that is not the issue. The issue is what the Government is doing now. It is an extraordinary fact that the Government ran away from the opportunity to clarify the question most preoccupying business, trade unions and anyone interested in the future of Cork and Shannon airports, namely, what the Government is going to do about the debt.

The Government considered this motion and agreed an amendment which ran away from it. That is what we have had to deal with since this topic first came on the agenda, the running away from the contradiction there from the start. It is not true that the Opposition did not notice it, despite what some journalists might say. We could see there were contradictions. We dealt with the legislation, voted against it, tried to amend it, sought clarity and were refused.

Consider the landing of a debt of €140 million or €150 million on Cork Airport. In the business and commercial world with which I am familiar — the chemical-pharmaceutical processing industry — one would expect to have an investment repaid in two to three years. That is if one is talking of commercial realities as distinct from infrastructural investment, which is the role of the State. In my capacity as a chemical engineer, I would not approve of any investment which would not be repaid within two or three years. If I were to suggest Cork Airport should pay back €140 million in three years, that would be impossible. One would be talking of charging passengers an extra €15 or €20 per passenger per journey, and the airport would close down. So what are we to do? One can reduce the debt but is still tied into company law. One can either reduce the debt or spread it out over a period of time, which will in effect amount to some kind of subsidy to Cork Airport by the Dublin Airport Authority. Either choice will contradict the fundamental plank of public policy, which was to give Cork Airport the autonomy and the commercial space to operate independently. The debt will make it impossible for it to operate commercially. The tie-in to Dublin will prevent it from operating independently, which has happened over the years. Cork Airport was not allowed to open up routes unless Aer Rianta, essentially Dublin Airport, approved. That is what is now handed to Cork Airport, with the prospect for its directors of a major overhang of debt. That debt may well be converted into some sort of lease-back arrangement but will amount to the same thing. The airport will be commercial because it will have to be — if it is not commercial, all the issues to do with corporate governance will arise. If it is commercial it will have to meet commercial criteria, which will represent a premium on the borrowings, because otherwise it is a subsidy rather than a commercial loan.

That is the mess the Government has gotten us into, and it threatens the futures of Cork and Shannon airports. That mess should not be resolved by threatening the future of Dublin Airport. It is no solution to treat that airport, because of its effective monopoly in an area of booming economy with potentially 30 million passengers within a short period of time, as some sort of cash cow to be instructed to fund the other airports.

I hoped the Minister for Transport would attend and I deliberately left out the word "condemn" because I thought the issue was too important to get involved in silly politics. I wanted to hear what the Government intended to do to get us out of a mess into which it got us. Instead we have been given an inept amendment. I could vote for it, but will not. There is nothing in the amendment with which I would disagree. Who could disagree with any word of it? It is quite inept and offers no defence of Government policy, no response to the Opposition. It shows a running away from responsibility.

As I said before in this House, I am tiring of the fact that the occasional motion from the Government side thanks the Government for making a decision, because such decisions are apparently now so rare that it is worthwhile standing up and cheering when they are made. Will somebody make a decision and tell the directors of Cork, Shannon and Dublin airports what the commercial future is, what commercial constraints they must operate within and what restriction will be imposed on them either by the Government, Dublin Airport, or whoever?