Vol. 575 No. 1
5 Ms Shortall asked the Minister for Transport if he will suspend plans for the breaking up of Aer Rianta further to the serious questions raised in the assessment by a company (details supplied) regarding the viability of Shannon and Cork as stand alone entities and reported views expressed describing the proposed introduction of legislation to provide for the break up of Aer Rianta as premature; and if he will make a statement on the matter. [27907/03]
As the Deputy will be aware, An Agreed Programme for Government includes a commitment to continue to transform Aer Rianta and, as part of that process, to ensure that Shannon and Cork airports have greater autonomy and independence.
In July last, the Government decided to establish the three State airports at Dublin, Shannon and Cork as fully independent and autonomous authorities under State ownership. It is envisaged that the two new independent airport authorities for Shannon and Cork will both commence business free of debt and that the debts associated with these airports, including the debt associated with the major new investment programme currently under way at Cork Airport, will remain with Dublin Airport. The desirability of these debt arrangements emerged from my Department's consideration of the financial position of the three State airports within the current Aer Rianta structure, provided to my Department by Aer Rianta.
PricewaterhouseCoopers assisted my Department in its analysis of the Aer Rianta data and completed the work in March of this year. These debt arrangements will ensure that both Shannon and Cork airports will have sound balance sheets, giving both a fresh start to develop and grow their business. PricewaterhouseCoopers did not express any opinion or conclusions on the financial information supplied by Aer Rianta.
The Minister for Finance has made it clear that he is fully supportive of these restructuring measures. My Department is currently finalising the necessary amending legislation and I will shortly seek Government approval for the publication of the State Airports Bill 2003 to give effect to the Government decision of last July.
Does the Minister accept that if Cork and Shannon are to be stand-alone airports without State aid, it is highly unlikely the regulator will allow the current assistance being given to the regional airports to continue? Is it not the case that PricewaterhouseCoopers found that even with transferring the debts from Cork and Shannon, it is inevitable that if they are to have any chance of surviving they will have to significantly increase their charges? This would hardly attract Ryanair or other low-cost airlines.
When the Minister brought the proposals to Cabinet did the Minister for Finance not ask why he was rushing them, given the complexity of the financial and legal issues involved? The Minister has, in the last week, employed consultants to advise him on the complex aspects of the proposal. Why will he not wait until they provide their advice, which they will do some time next summer? Is it not the case that the Minister made up his mind, made an announcement about the future of Aer Rianta and thought about it later? It is only now beginning to dawn on him that the route he has chosen is an exceptionally difficult one and that he may not be able to carry through what he says he intends to do. Given that the Minister has recently employed an army of consultants to advise him on how he can achieve what his proposals are setting out to achieve, why will he not wait until that advice is available before rushing legislation through the House?
It is not the case that the regulator would stop us from investing in regional airports. The regulator has no role with regard to regional airports under current legislation.
The regulator will insist on a level playing pitch.
The regulator would not have authority to make any such judgment on regional airports under current legislation. That would not be an issue.
That remains to be seen.
Deputy Shortall suggests that increased charges in Shannon and Cork would come about if they were independent.
PricewaterhouseCoopers suggested that.
I do not accept that analysis. If one takes the debt out of the PricewaterhouseCoopers' figures, the growth forecasts by Aer Rianta suggest these airports can at worst break even and at best make substantial funds. Most airports around the world that have more than 2 million passengers are profitable. With well over 2 million passengers in both cases there is no reason these two airports should not be profitable. There should be no need to increase charges excessively. The level of charges will be a matter for judgment. Even if we make no changes, the general view is that charges are not high by international standards and I accept that. However, charging is a neutral issue, whatever the structure of the airports. It applies whether or not my policy is put into effect.
In the menu which has come into the possession of the Deputy's party, the Minister for Finance fully supports the restructuring proposal. He made that clear. He has asked that we deal with debt, pension and projection issues and issues to do with bonds. I support him in that. These are all normal business issues and can be fully dealt with. That is why I have the consultants helping me to sort them out, and we will do so. We are making good solid progress in that regard.
I do not propose to wait for the consultants and hold back the legislation in that context. We will move at a steady pace. I will not rush matters but I will make sure the House has the Bill as soon as I have it. We will unravel as many of these technical financial issues as we can before the Bill is published. Provided we lay out how it is to be done, others can be unravelled after autonomy has been put in place. The new boards can work on those issues.
It has not just dawned on me that this is a complicated business. I know it is complicated but I am committed to pressing ahead with it all speed. I visited Shannon recently. There is fantastic enthusiasm in the region for the new board which I nominated. Most of the agencies there are extraordinarily enthusiastic. I have addressed many groups in the Shannon region in recent weeks. There is nothing but enthusiasm and excitement about the autonomy. The same is true of the Cork region. It is clear from my discussions that there is substantial excitement there. I look forward to Cork and Shannon having the freedom to develop their airports with the support of all of us in this House. I know we all wish them well.
Is the Minister for Finance not right to be concerned and to express severe reservations? As the shareholder he is the one who is likely to end up in the High Court when the legal difficulties associated with the Minister's proposals are being dealt with.
The Minister has employed three teams of consultants in the past couple of weeks to advise him on what he is trying to achieve. What have they cost? The Minister still has not explained why he will not wait for that expensive advice before he drafts the legislation. Perhaps he is rethinking that, now that he realises how complex it is.
I am not rethinking it. The consultants have not been engaged to advise me on whether or not to proceed with the policy. The policy is settled and approved by the Government.
The Minister has to find out if it is possible first.
I am determined to see the policy approved by the Government through to its final end, and I will. The consultants have been employed to work with the Minister for Finance and myself on the legitimate technical, financial issues that arise when one is trying to establish three autonomous organisations. Those issues relate to debt, bonds, pensions and so on.
And the demerging process.
They are not insurmountable issues and we will get through them. The consultants' only role is to advise on technical issues.
How can the Minister produce legislation if he does not have advice? How much are the consultants costing?
I do not have that figure.
Another blank cheque.
Multiple millions.
They will fly high on it anyway.
