Vol. 599 No. 7
1 Mr. P. Breen asked the Minister for Transport if funding has been set aside by his Department for the development of the western rail corridor; if so, the level of this allocation; when the report commissioned to investigate the re-opening of the corridor will be available; if he has set out a timetable for its development; and if he will make a statement on the matter. [9800/05]
The working group on the western rail corridor appointed by my predecessor as Minister for Transport, Deputy Brennan, has met on a regular basis since last June. I understand the working group and its sub-groups are nearing the end of their deliberations. Accordingly, I expect to receive the report of the chairman within the next two months. A decision on the development of the western rail corridor will be taken in the context of the ten-year transport investment framework under preparation by the Department.
This is my first opportunity to debate with the Minister on transport issues and I wish him well in his new portfolio. However, he has given a very short reply to my question. Will the funding for the western rail corridor, to which the Taoiseach referred in this House in reply to Deputies Kenny and Rabbitte, be ring-fenced? The report of the working group, which the Minister has said will be completed within two months, is expected to be very positive in regard to the development of the western rail corridor. Likewise, Iarnród Éireann has indicated a positive attitude to such a development.
If the project is approved, will the estimated €300 million in funding be available? If so, does the Minister expect work to begin on the project in 2005 and will it be completed in stages? There has been much talk of the Ennis-Athenry line, which will cost in the region of €30 million and will link Galway, Limerick and possibly Cork. Is there a timetable for the development of this route? The Department seems to be focused on its ten-year plan but some vision is required in this matter. Can the Minister get this project moving quickly?
I agree with the Deputy regarding the importance of this project and was sitting beside the Taoiseach when he answered questions about it in the Chamber. I have met the chairman of the working group on several occasions and have asked that the report be completed as quickly as possible. This is an important project containing infrastructural elements that can deliver good value for those in the region. I do not wish to pre-empt the report by speculating whether the development of the corridor should be staged by completing large sections one at a time. However, given the scale of the project, it is likely to be undertaken in major phases.
The ten-year financial framework announced by the Minister for Finance for my Department represents a colossal amount of money. There is no doubt the resources are there for this project, albeit in competition with other important rail, bus and road projects. I have given much attention to this project and have had numerous discussions in this regard. I will make a final assessment in this matter when I receive the report of the working group.
Will the Minister comment on the major imbalance that exists between the east and west, particularly in regard to the national development plan? Under the plan, public spending for the first three years is running at €1.3 billion in the south and east region as against €155 million in the Border, midlands and west region. What is the Minister's view of yesterday's Central Statistics Office statistics which indicate that incomes in the BMW region are significantly lower than the average incomes in eastern areas? The lack of a transport system on the west coast is a factor in this disparity in that the infrastructure is lacking to attract high value jobs.
High value jobs are available in the BMW region and the already good infrastructure in the area is being substantially improved. The Deputy may be aware that the National Roads Authority's recently released plans for this year indicate a significant upscaling of investment in the BMW region, with eight or nine of its projects located in that area. Having been responsible for the formulation of the spatial strategy, I appreciate that aspirations towards balanced development must be met by an equitable investment package. People in my area in the south east will also be disconcerted by the CSO figures and will claim the picture is distorted by the dominance of Dublin and that the figures for the southern and eastern region are also relatively low.
Putting statistics aside, the objective is to achieve substantial investment in the BMW region and to create a regional balance. I am prepared to put a significant amount of infrastructure in place to achieve that end. Activity in the BMW region this year represents a doubling of what took place last year. This is a clear illustration of my intentions in this regard.
Is the Minister in favour of the development of the western rail corridor once the working group has issued its report?
The Government and I are very positively disposed towards the western rail corridor. However, I will await the report of the expert working group before taking action in this regard. We will all have a clearer picture once the report is issued.
Is Iarnród Éireann favourably disposed towards the development of the corridor?
I will not speculate before receiving the report. I have asked the chairman of the working group to report to me as soon as possible so that a decision can be made.
2 Ms Shortall asked the Minister for Transport if he will set out his case for either the part-privatisation or full-privatisation of Aer Lingus. [9821/05]
Last Tuesday, I briefed my colleagues at Cabinet on a number of key aviation issues, including the future of Aer Lingus. I am anxious in the interests of the airline to move forward on this issue as a matter of urgency. As the House is aware, Aer Lingus must be provided with the flexibility to grow and compete on a level playing field.
The current situation is not sustainable and is restricting the airline, particularly in regard to profitable growth opportunities on long haul routes. To fund that growth and to provide financial security, Aer Lingus must have access to the full range of funding mechanisms. Equity capital is a crucial element in that mix. Early clarity on realistic options for accessing that equity are crucial and I will bring specific proposals in this regard to Government shortly. I will continue to consult stakeholders as I move forward on this issue.
If the Government decides to embark on a sale of all or part of Aer Lingus, I will set out for the House, in accordance with the provisions of the Aer Lingus Act 2004, the general principles of the proposed sale as well as the basis for the Government's decision and the arguments for and against such a sale. I will also set out how the Government proposes to deal with important strategic issues.
Will the Minister be more specific about Aer Lingus's needs? There is much talk of urgency in regard to access to equity but the chairman of the company is not in agreement in this regard. He is in the process of replacing the short haul fleet and is considering the question of long haul fleet replacement in the coming years, in which regard there are a number of options. Various figures have been quoted but has the Minister an estimate from the board of Aer Lingus regarding the company's capital requirement and the timescale over which such might be delivered? Has he carried out any type of serious examination of the different options available to Aer Lingus for meeting its needs? The Minister does not seem to be making a case for even the part-privatisation of the company.
I have been involved in a detailed analysis of the prospects. The current chairman has written to me recently to urge me to emphasise the enormous opportunities in the immediate future for Aer Lingus, but decisions need to be made immediately.
What are the capital requirements?
I will come to that in a moment. I will give the Deputy an example. It was clear even three or four months ago that the buying opportunities for airlines vis-à-vis the manufacturers was very opportune. I have been anxious to place Aer Lingus within that window of opportunity to get the best possible deal from manufacturers in terms of ordering aircraft. Recently, for example, China made substantial orders with Boeing and that has taken some of the pressure off the manufacturer. While the window of opportunity in terms of purchasing aircraft has not closed, it is closing fast as more and more airlines purchase new fleets for the future. Aer Lingus must order fairly quickly, not just for that reason but because it will take a lead-in time of about 18 months to acquire the aircraft and get them operational. At present Aer Lingus has seven long haul aircraft in its transatlantic fleet, all of which need to be replaced immediately.
The chairman is not saying they need to be replaced immediately.
He is. He has written to me since——
He is not.
Deputy Shortall will allow the Minister to speak.
I do not want to disagree with the Deputy, but he has been quite clear on this since he was appointed fully as chairman of the board of Aer Lingus, as distinct from being acting chairman. As the Deputy knows, he is acting in the capacity of executive chairman at present. The prospects for growth essentially are tremendous and not just on the transatlantic route, although that is where the immediate opportunities lie.
Nobody is denying that. How much does the company need?
That is a matter for the airline.
I will allow the Deputy back in, but she must let the Minister finish.
Has the Minister not established that?
If the Deputy wants me to answer the question rather than interrupting me, I will try to facilitate her.
I will allow Deputy Shortall back in.
I started by referring to the immediate replacement of the seven existing planes, which is very substantial in itself. We believe 21 destinations in America are anxious to have Aer Lingus flying in to them. I do not believe any airline, even Aer Lingus, could do that overnight, but it shows the scale and depth of opportunity that is available in the US market. I would like Aer Lingus to gather at an early stage a number of these new routes and destinations and to be in a position to serve them within 18 months, in addition to what it already has flying into the US. Equally there are opportunities in the Middle East, South Africa and, the Far East.
Has the Minister a figure?
It is not for me to put figures on it at this stage.
It is, since the Minister has been talking about floating part of the company.
It is public knowledge that every plane costs about €110 million, so it is easy to work out.
We are not talking about an up-front payment.
The sort of capacity scale, at a very minimum is indicative of €1.1 billion to €1.2 billion.
This is over a considerable period.
No, the Deputy should listen to what I am saying.
They are all lease agreements now.
It does not matter. In terms of the balance sheet and the airline's viability it is a misnomer to suggest that somehow a leasing arrangement in terms of the financial base effect is fundamentally different to purchasing. It is not. My advice is that it is almost the same effect, so the argument is spurious. Airlines will make decisions on a ratio of purchasing to leasing aircraft for different reasons, but not for the one which the Deputy suggested. I am not making that point in an argumentative way, just stating that those are the facts as I understand them.
The key issue is that the Minister does not know the company's capital requirements. If there is a case for part privatisation, it should be made. Let us have the figures on the table to see what the capital requirements will be over the next ten years and the best ways of meeting them. I want the Minister to tell the House whether he is considering at least a part privatisation of the company, as he seems to be. I want him to outline how he can guarantee the strategic interests of the State will be protected in that type of scenario. The Goldman Sachs report seems to indicate that they cannot be and that the notion of a golden share is nonsense.
What type of mechanism has the Minister in mind? The figure of €300 million has been bandied about in the media. If, for example, he was to sell €300 million worth of the company, what happens to that money? As matters stand, in a straight deal that goes into the Government coffers. It does nothing to help the company. What type of mechanism does he therefore have in mind? Is he talking about the State reinvesting the €300 million in the company or what exactly has he in mind? Is this just a mechanism for boosting the Government coffers?
I am not about to start speculating in the House at this point about the financial situation as regards Aer Lingus. I will not signal to the market this afternoon what I believe the company is worth or not worth.
The Minister is very vague. He does not know the company's capital requirements.
The Minister must conclude his reply.
I do and I have stated in my reply to the Deputy that when a decision is made under the Act, I will set it all out for her. There is nothing vague about what I have said as regards the immediate requirements of the long haul fleet of Aer Lingus, which cannot be funded from within its own resources. It is funding its expansion into Europe at the moment from its own resources, which is putting a great strain on the company.
What about this figure of €300 million?
I cannot speculate on the figures the Deputy is speculating on.
The Minister most certainly can.
We are moving on to the next question.
Clearly, in any sale or any involvement, the idea is to get the funds for Aer Lingus.
The Minister is talking about State investment.
The Deputy misunderstands how the mechanism works.
The Minister should please explain it to us.
I will. The Deputy is being disingenuous.
3 Mr. Crowe asked the Minister for Transport if, in view of the conflicting information surrounding the Dublin Port tunnel, he is considering a review of his position on supercube trucks using this tunnel. [9894/05]
Following my announcement in October 2004 the operational height of the Dublin Port tunnel will not be changed. The tunnel is being completed as planned and will have an operational height of 4.65 m.
It is the view of Dublin City Council and the National Roads Authority that the Dublin Port tunnel will facilitate almost all of the HGV traffic currently using Dublin Port. Provision for those HGVs unable to use the tunnel is a matter for Dublin City Council.
I know I have raised this issue with the Minister before and it is not something that will go away. It has long-term implications for traffic in Dublin. Does the Minister agree the tunnel could be modified at a low cost to provide for clearance while meeting all Irish and international safety standards? Will he comment on the specific detailed proposals submitted by the transport umbrella group, outlining how this could be done by reducing the width of the traffic lanes and dropping the level of the tunnel's floor? The independent consultants appointed by the Minister to report on the feasibility of modifying the tunnel's clearances, concluded that works required to implement the modifications would not involve massive changes. If it is a matter of just moving out the lane which would fit all of these trucks why is the Minister opposed to this? It does not make sense if supercube trucks are coming more and more on stream. Rather than having them driving through the Dublin streets, what the consultants propose seems so logical and simple and makes sense. It would mean removing that type of traffic from the city's roads.
I have made the point on a number of occasions on why I would not reverse the decision on the tunnel, for reasons of finance, delays etc. I have another reason — I simply do not want those enormous trucks here. We looked at the situation in 12 countries including Austria, Denmark, France, Germany, Japan, the Netherlands, Norway, Sweden, Switzerland, the USA, all of which have lower requirements. I do not see the reason or the need to have these enormous trucks on our roads. Quite simply the cost of them in terms of maintaining our roads and the damage is huge. The safety aspect of driving through our streets is also a major consideration.
My view in terms of the tunnel is that we are more than adequately equipped relative to most of our European competitors, in fact all of them. They are not above that figure. I know the Minister of State is currently involved with the Irish Road Haulage Association, in terms of getting an overall picture for the country. I am giving the Deputy my view, which I believe to be correct. One comes to a point where one makes a decision in these matters. Looking at international best practice, the height restrictions on the Dublin Port tunnel are adequately above the restrictions for tunnels in other countries.
The tunnel is suitable for these trucks if there is a slight inexpensive modification. The Minister refers to the effects this will have on the roads. Is the Minister referring to the weight of the trucks as restrictions already exist in this regard? Is he claiming these trucks will cause more damage on the roads?
The Government is not in favour of allowing these large trucks on the road. Sinn Féin wants them on the roads in Ireland, unlike most European countries, but I disagree with the Deputy.
I am not asking about the Sinn Féin position. I asked the Minister a question which he has not answered.
I could not be more clear with the Deputy.
Will the Minister ban these types of trucks?
4 Mr. P. Breen asked the Minister for Transport the progress to date in the negotiations between Irish and US officials on completing a new bilateral aviation agreement or amending the existing agreement between Ireland and the US; the proposed details of this agreement, particularly on the status of the Shannon gateway; when these negotiations will reach completion; his views on the European Commission’s perspective on such negotiations; and if he will make a statement on the matter. [9801/05]
My officials are in contact with the US authorities to explore what adjustments to the Ireland-US arrangements are possible. An informal meeting took place on 7 February when senior US officials were in Dublin for a seminar on aviation regulation organised by the Institute of European Affairs. No conclusions were reached at that meeting.
It would not be appropriate to disclose Ireland's position during the course of these discussions. However, I am aware the new board of Shannon Airport is required to produce a business plan for the airport. The clarity on the open skies issue will be helpful to that business planning process. I am also aware that Irish airlines are restricted in the routes they can serve under the existing bilateral arrangement. Expanding scheduled transatlantic services is of great importance to the growth of Irish airlines and tourism.
Whatever new arrangements are agreed, Shannon Airport must remain an attractive destination in America, particularly on the east coast of the US. Aer Lingus has said there is a strong transatlantic market for Shannon and it will continue to serve that market. Any change in Ireland-US arrangements will open up new destinations in the US for Aer Lingus, presenting new opportunities for Shannon. I am convinced that Shannon, with the right cost base for the airport and with the proper competitive environment, can maintain and grow its transatlantic business.
European Regulation 847/2004 permits member states to negotiate with third countries, including the USA, after informing the European Commission of the intended negotiations. The European Commission was informed of Ireland's contacts with the US, and a Commission representative was present during previous Ireland-US discussions in May 2004.
On 16 March 2005 the European Commission sent infringement letters to 20 EU member states, including Ireland, that have bilateral air transport agreements with the US. The letter was received by Ireland on 21 March 2005. While this letter does not relate to current discussions with the US, the Commission expresses the view that due to certain aspects of its bilateral aviation agreement with the US, Ireland has failed to fulfil its obligations under the treaty establishing the European Community. The Commission has asked for a response within two months of receipt of the letter. This is a complex matter that must be carefully examined before a reply can be issued.
I am astonished to hear the Minister claim that Aer Lingus believes Shannon has a strong transatlantic market. When Mr. Walsh was with Aer Lingus he removed many transatlantic services from the airport, particularly on the EI 111 route, from which a percentage of seats were transferred to Dublin Airport.
What is the Minister doing to protect Shannon Airport? Government policy is to encourage balanced regional development, yet the Minister is doing nothing to protect this regional airport. The European Commission has sent letters to 20 EU member states regarding their bilateral air transport agreements with the US. However, the former European Commissioner for Transport, Loyola de Palacio, and her successor, Jacques Barrot, did not see a problem with Ireland having its own bilateral agreement with the US.
Why then did the Commission send us a letter on the matter?
That is a different story to do with competition. It is on the record that Mr. Barrot has no problem with Ireland having its own bilateral agreement. The Minister has done nothing to protect Shannon Airport.
In a recent report, Tourism Ireland stated that an open skies policy would result in Shannon's transatlantic business becoming seasonal. The chambers of commerce report, by Mr. Dukes and Mr. Sørensen, stated that Shannon would lose up to 40% of business under an open skies system. While the Government is good at producing reports and policy documents, it still has not carried out an impact study on the open skies policy. As it will be important to understand the effects an open skies policy will have on the mid-west region, will the Minister carry out an impact study?
I reject the Deputy's claims.
The Minister would do so.
The Government is heavily involved in this matter which is why I initiated discussions with the US. It is inevitable the EU and the US will reach agreement on an open skies into Europe policy, which will be in the best interest of all consumers. I have been charged by the Government to ensure the best possible deal for the future of Shannon Airport. The Deputy claimed the Government has done nothing. We have given the airport its autonomy to chart its own development. The board is doing tremendous work. The recent announcement by Ryanair on further services in Shannon Airport show it has a future in the European market. From my contacts in the US and elsewhere, I have learned that Shannon Airport has a future.
The Deputy should contrast the attitude in Shannon with that in Cork Airport. As there is no restriction on Cork Airport entering transatlantic services, it will soon do so. The real threat to the future of Shannon Airport is Cork Airport. As the Deputy presents it, Shannon simply wants to stick its head in the sand and not go after the large opportunities available. Shannon is a marquee name in the US. If I was a member of the Shannon Airport board, I would be looking at the new market opportunities as its competitors are already doing so.
It is important that statements are not made in the House that will undermine Shannon on the international stage. It is in a strong market position. The Government is committed to its future and wants it to develop both its European and US routes. I will ensure that Shannon has a good transition phase before the European open skies policy comes into force.
The Minister's claims are typical of his Government colleagues' attempts to drive a wedge between the people of Shannon and Cork. This will not happen because the people of Cork and Shannon will bond on this issue.
That will not be the case because they are both independent airports.
The chambers of commerce report stated that Cork and Shannon airports would be the big losers in an open skies agreement. A bilateral agreement is there not just to protect Shannon but also Aer Lingus as it is a small carrier.
It is crippling Aer Lingus.
It is not. I welcome Ryanair's developments in the airport. However, it is important that we do not put all our eggs in the one basket. Shannon accounts for 44% of the transatlantic business. This will be eroded in an open skies system as the large transatlantic carriers will concentrate on where the big business is, namely, Dublin Airport. I agree marketing is important. However, if the national carrier does not favour Shannon Airport, resulting in the loss of an all-year-round transatlantic service, tourism and industry in the region will suffer.
US chambers of commerce have stated they want a direct daily service into Shannon Airport. The Minister is not doing enough to protect this service even though the European Commission has no problem with such an arrangement.
I reject these claims. They are grossly unfair and do a disservice to all the work the good people at Shannon Airport are doing in developing the airport. The Deputy should acknowledge their efforts. There are many opportunities to ensure Shannon has an all-round daily service to the US. There is potential to do a great deal more and Shannon Airport should grasp that opportunity. I am confident that the board and the workers in Shannon see this and are looking to the future.
Why not arrange for an environmental impact statement?
The time for Priority Questions is concluded. We must proceed to other questions.
