Noel Ahern (Dublin North West, Fianna Fail)

I thank the Senator for raising this matter. He appears to have a good feel of the situation judging by his figures. The Department provides direct financial support for the six regional airports under two schemes, one relating to operational expenditure and the other to capital investments. In the case of operational expenditure, a new scheme introduced in 2006 provides for an annual subvention in respect of expenditure by the regional airports in providing core airports services. The amount of subvention payable in any one year is based on projected losses by the airports in providing those core services after taking account of any surpluses from commercial activities such as catering, car parking and any other sources of income available to the airports. This is in line with the view underlying the mandatory EU guidelines on state aid for the sector. As a general rule, airports should be self-financing and public money should be made available to them only in particular circumstances and subject to certain conditions.

For 2009, an allocation of €16.926 million has been made to the subhead which funds the operational expenditure scheme and the programme of public service obligation flights between Dublin and the regional airports. On account of limits on public spending, it is clear that for the immediate future, balancing priorities within and between these two programmes will be very challenging. Airports will need to be especially careful to minimise their dependence on Exchequer funds to meet day-to-day spending requirements.

With regard to capital expenditure, in February 2007 the Government approved an €86 million programme of grant aid under the Transport 21 umbrella for specific projects at these airports in the period to the end of 2010, consisting of €39 million at the 90% rate for safety and security improvements and €47 million at the 75% rate for developmental projects All of the regional airports are engaged in the implementation of projects approved under the capital grant scheme.

Grants paid under the scheme so far, amounting to approximately €7.86 million, reflect the fact that for most airports, major projects have been at the preparatory stages and have been subject to delays arising from planning or procurement procedures. They are also a reminder that progress under the scheme, including the requirement for funding in any one year, depends in the first instance on the ability of the airports themselves to implement projects, to raise matching funds and then submit valid claims to the Department.

The provision in the Department's Vote to fund the capital expenditure grant scheme in 2009 is €11 million. On account of the current difficulties with the public finances, it has been decided that until the end of 2009, expenditure under the scheme should be focused on projects and project elements where the airports have already entered into contractual commitments. This means that, inevitably, full implementation of the approved capital programme will take longer than originally anticipated. The Department aims to establish priorities for grant aid from the funds available in 2009, having regard to these contractual commitments and a realistic assessment of the drawdown requirements for safety and security related projects likely to arise during the year.

Waterford Airport, with potential grants amounting to €22.33 million, is a major beneficiary under the capital grant scheme and has already received approximately €2.77 million to date. Projects earmarked for the airport include €9.2 million for safety related projects and €13.1 million for developmental projects, including the proposed runway extension costing €4.84 million. There are no existing contractual commitments in respect of this project. It is inevitable, therefore, in the current financial climate that its phasing and that of other projects at the airport that are likewise uncommitted must be carefully considered, especially in view of the large sums involved.

At a recent meeting with Waterford Airport the Minister received a detailed presentation on priority items the airport wants to move forward in 2009, which are mainly safety or security related. These will be considered by the Department in the context of its review of priorities for funding under the scheme next year, but it is not possible to give any commitments at this stage on the likely or eventual decisions.