Seanad debates

Tuesday, 4 December 2007

6:00 pm

Photo of Pat MoylanPat Moylan (Fianna Fail)
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As the Senator who is first on the list is not present, we will proceed with the next matter. I welcome the Minister of State to the House.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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I, too, welcome the Minister of State, Deputy John McGuinness, to the House and congratulate him on his appointment.

The issue of Cork Airport is important and needs to be resolved. In simple terms, a promise that Cork Airport would be debt free was made by the former Minister for Transport, Deputy Brennan. It was agreed that the board of the Cork Airport Authority would be a separate autonomous board. Neither of these has happened.

I question how long more Cork can put up with this. Will a third Minister for Transport refuse to deal with the issue? His predecessors have not answered the question and I hope the Minister of State and the Minister will not fail to deliver on the promise.

Cork Airport has a new terminal building but there is still the outstanding question of when the Government will honour its commitment to the people of Cork and to the Cork Airport Authority to provide a debt-free Cork Airport. Why has it taken so long to grant independent status to Cork Airport? What is the Government doing to create a truly independent airport authority in Cork? It is nonsense to ask the board of the airport to draw up and present a business plan when the board is in limbo regarding the cost and the size of the debt. Cork Airport needs to be debt free and separate from Dublin Airport Authority. Under no circumstances should Cork be lumbered with a debt as this was never meant to be the case under the terms of the break-up of Aer Rianta.

The distribution of the assets of Aer Rianta, such as the duty-free shops, the Great Southern Hotels group and the share in Birmingham Airport, has freed up considerable resources which could be put towards the elimination of Cork's debt. I will not retell the history of the issue other than to say a decision is required. This lies in the hands of the Government and it is time for delivery.

A political promise was made by the then Minister in both Houses of the Oireachtas. Cork Airport should not have to pay debts and the people of Cork city and county should not have to face the consequences of an airport being levelled with a debt. There is frustration in Cork as it has been three years since this debt was accrued. I ask the Minister of State that a decision be made on the Cork Airport debt and the separation of Cork Airport Authority from the Dublin Airport Authority.

Photo of John McGuinnessJohn McGuinness (Minister of State with special responsibility for Trade and Commerce, Department of Enterprise, Trade and Employment; Carlow-Kilkenny, Fianna Fail)
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I thank both the Cathaoirleach and Senator Buttimer for their welcome and their kind remarks.

The State Airports Act 2004 provides the framework for the establishment of Shannon and Cork as independent airports. As part of the airport restructuring process, the boards of Cork and Shannon airports are required to prepare business plans for eventual separation. As they are inter-linked, the production of the three airport business plans will have to be co-ordinated by the Dublin Airport Authority to ensure overall coherence before they are submitted to the Ministers for Transport and Finance for their approval under the Act.

In their examination of the plans, both Ministers will have to be satisfied that the airports have the capacity to operate on a sound commercial basis before giving final approval to the business plans. The Minister for Transport understands the Dublin Airport Authority has been advised by consultants on an appropriate financing proposal that would facilitate the statutory objective of the separation of Cork Airport from the DAA in a timely manner consistent with the requirements of the State Airports Act 2004 and the Companies Acts.

The Minister is aware that the outcome of this analysis was that Cork Airport could sustain a certain level of debt while remaining a very viable enterprise. He understands the board of the Cork Airport Authority also engaged consultants to examine further the issue of the Cork debt. It is clear the debt issue is crucial to the business planning process and there will have to be agreement on this point between the Cork Airport Authority and the Dublin Airport Authority before the Cork business plan can be completed and submitted to both Ministers.

The Government's position is that the funding of the new terminal and other works at Cork Airport will have to take account not only of what is commercially and financially feasible for Cork Airport but also what is commercially and financially feasible for Dublin Airport Authority. If the Cork Airport Authority is to achieve autonomy in the foreseeable future, it will have to accept responsibility for a reasonable portion of the outstanding debt, in return for the substantial assets to be transferred to it on separation.

The co-ordination role of the DAA will be central to the conclusion of the business planning processes for both Shannon and Cork. Accordingly, the Minister has encouraged the Cork Airport Authority to engage with the DAA on its business plan and in particular on the issue of the debt to pave the way for eventual autonomy for Cork Airport. I understand a draft of the Cork Airport business plan was submitted to the DAA in recent days.

The Minister looks forward to a pragmatic and constructive engagement by all concerned. Subject to satisfactory progress being made on the plans, the Minister awaits the DAA's overall considered views on airport separation to enable the plans to be examined by the Minister and the Minister for Finance. Only then will the Minister be in a position to consider the timing for the restructuring of the three State airports.

Photo of Pat MoylanPat Moylan (Fianna Fail)
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I will allow a brief supplementary question.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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I thank the Minister of State for his reply. Can it be assumed the original commitment made by the then Minister, Deputy Brennan, is worthless and there has been a rowing back on the promise that Cork Airport would be debt free?

Photo of John McGuinnessJohn McGuinness (Minister of State with special responsibility for Trade and Commerce, Department of Enterprise, Trade and Employment; Carlow-Kilkenny, Fianna Fail)
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The Senator can take it that it is work in progress and plans are awaited. That process must be completed before either of the two Ministers will make a statement on that matter.

Photo of Jerry ButtimerJerry Buttimer (Fine Gael)
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Will Cork Airport be debt free?

Photo of John McGuinnessJohn McGuinness (Minister of State with special responsibility for Trade and Commerce, Department of Enterprise, Trade and Employment; Carlow-Kilkenny, Fianna Fail)
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That is a matter for consideration once the business plan and everything else is considered. As I outlined in my reply, a process exists and we must wait for that process to be completed.