Vol. 602 No. 3
1 Ms O. Mitchell asked the Minister for Transport his views on whether, in the event of a partial sale of Aer Lingus, it would be possible to include a caveat in the sale agreement to ensure the retention of landing slots at Heathrow Airport by Dublin passengers; if he is actively considering such a clause; the action taken to examine this proposal; and if he will make a statement on the matter. [15715/05]
I want to see the slots being retained at Heathrow, regardless of the ownership structure of the national airline. I am very aware of the concerns raised about specific strategic issues in the context of any proposal to reduce the State's shareholding in Aer Lingus. These relate not only to the slots at Heathrow but to the Aer Lingus brand and direct services on the transatlantic routes.
Ireland does not own any Heathrow slots. Aer Lingus holds these slots on the basis of "grandfather rights", which are rights of historic precedence. Aer Lingus has around 4% of Heathrow slots — the fourth largest after BA, BMI and Lufthansa and operates in the region of 25 round trips daily in peak season. Apart from Aer Lingus, BMI is the only other operator on the Heathrow-Dublin route and there is no other operator to Heathrow from Cork or Shannon. It should be pointed out that Heathrow services are a key element in the Aer Lingus product and a key contributor to profits. I have no reason to believe this will not be the position into the future, whatever the ownership status of Aer Lingus.
However, as direct services increase to European and other points, the importance of Heathrow for international connectivity is diminishing. Also, the other major European hubs in Paris, Frankfurt and Amsterdam are continuing to grow and have good direct connections from Ireland with a range of airlines.
EU Regulation 95/93, as amended by Regulation 793/2004 governs the allocation of slots at congested airports such as Heathrow. The current regulation allows for the retention of grandfather slots. It also allows for the exchange of slots but is silent on the issue of the sale of slots. However, this has not prevented the development of a "grey market" in slots where the practice of exchanging slots for cash has developed.
The Commission published a study last year on potential mechanisms to develop market-orientated slot allocation schemes. A consultation paper later in the year was the follow-up to this study. The Commission is now developing its thinking on the potential mechanisms that could be included in draft legislation. My Department will continue to monitor developments at EU level regarding any proposed changes to the regulatory regime for slots.
The current EU regulatory regime may change in the future. Accordingly, there is not an absolute guarantee that access to the current level of grandfather slots at Heathrow can be maintained indefinitely, even if the current ownership status of Aer Lingus remains the same.
However, I assure the House that in the context of any decision to reduce State ownership in Aer Lingus, all the options available within the regulatory framework will be examined to ensure adequate ongoing access to Heathrow for Irish consumers.
I am inclined to agree with the Minister that there is no reason to believe Aer Lingus will lose the Heathrow slots or that the market will not dictate that those slots will remain and be used for the benefit of Irish passengers. It is probably true that if the market was to change, there is very little the Government, as a minority owner, could do to ensure that a majority owner did not sell on the slots. I know that the EU has adjudicated on similar issues.
Does the Minister agree, given that we will have little or no control over slots in the long term, it is extremely important that Aer Lingus is equipped to develop more direct routes, particularly long-haul routes, to lessen its dependence on Heathrow as a hub? Does the Minister agree that it is worrying that on the very day a private operator launches new routes from Cork to the United States, Aer Lingus is threatening to withdraw routes from Dublin to the United States, for example, the routes to Los Angeles and Orlando? Does he not agree that this is an example of how Aer Lingus is almost being run into the ground through lack of decision-making about its future? Events are taking place all over the world that are placing Aer Lingus at a disadvantage.
I have set out as openly as I can, in the context of a parliamentary question, the facts surrounding Heathrow slots. Both Deputy Mitchell and I agree that Heathrow slots are crucial. Any major strategic holding the State would have in Aer Lingus would be very significant in dictating some of the strategic issues. Any company would want to maintain the slots. At a European level, an attempt is being made to develop a regulatory framework to deal with this issue. The Department and I have been closely involved in these discussions but they have not resulted in a definitive mechanism for creating a market for slots at Heathrow.
I agree that the other hubs of Paris, Amsterdam and Frankfurt have experienced significant growth and they will continue to grow. Aer Lingus is beginning to take more advantage of these hubs in terms of route selection. Dublin Airport has an opportunity to become a hub of some significance. I believe this because the airport is well placed in terms of its strategic location for long-haul and short-haul flights. If people with views on the general debate on Aer Lingus would think outside the box, they would see a different picture. There is enormous growth from Ireland into the United States and Aer Lingus is in a position to take advantage of that. Opportunities also exist to expand into eastern markets.
Does the Minister agree that there is a need for a runway, terminal and a CEO for Aer Lingus before we begin talking about Dublin Airport becoming a hub?
We have had great success with the new CEO of Aer Lingus and I wish him well. Any significant airline would have been delighted to recruit a CEO of his quality.
It would have been better if Aer Lingus could have kept the previous CEO.
Aer Lingus has a business plan and I urge all sides to implement it. This plan is crucial to the airline's survival in the long term, regardless of what the future strategic structure of Aer Lingus turns out to be. The plan also provides the basis for enormous growth by developing many new routes, both short-haul flights within Europe and long-haul flights.
2 Ms Shortall asked the Minister for Transport when a Cabinet decision will be taken on the long-promised second terminal for Dublin Airport; if it is his intention that this facility be privately owned and operated; if he will identify any other European airport at which there are competing terminals; if he will report on the basis on which terminals might compete; and the expected timescale for the commencement and completion of this facility. [15768/05]
4 Ms O. Mitchell asked the Minister for Transport if he maintains that it is the mandate of the Dublin Airport Authority to provide terminal services at Dublin Airport; if his stated aim is to maximise the use of existing airport lands in the provision of a second terminal at Dublin Airport, the reason his Department sought alternative expressions of interest to build a second terminal; and if he will make a statement on the matter. [15716/05]
I propose to take Questions Nos. 2 and 4 together.
As the Deputies will be aware, I am currently finalising proposals for the provision of additional terminal capacity at Dublin Airport for consideration by Government very shortly. There are two crucial issues guiding the overall consideration of how terminal capacity will be provided at Dublin Airport. We must ensure the continued overall operational integrity and strategic development of Dublin Airport to meet the needs of current and future users of the airport, both airlines and passengers. It will be necessary to ensure that additional terminal capacity is provided within a reasonable time frame to meet the growth in air traffic. Projected growth in passenger traffic drives the timing and scale of the investment required.
Under existing legislation, the Dublin Airport Authority owns and is responsible for the operation, management and development of Dublin Airport. That is the legislative mandate given to the authority. As policy maker, the State must be satisfied that any future framework for the provision of terminal capacity at the airport, covering both the development and operation of such facilities, ensures the optimum development of Dublin Airport.
Once the Government makes a decision with regard to the provision of capacity, the detailed planning and implementation process will address the issue of the optimum location of the terminal. As a general principle, the objective is to use available assets as effectively as possible in the interests of the efficient operation of Dublin Airport. As regards the timetable for the project, clearly considerable emphasis will be placed on implementing the project as quickly as possible to meet projected passenger growth and the aim is to have new capacity in place in 2009. The request for expressions of interest in August 2002 was a preliminary canvassing of the market to test the level of interest in and feasibility of the independent terminal concept. These expressions were then examined by the Mullarkey panel. The expressions did not identify working examples of independent competing terminals and the panel noted this concept had no corollary elsewhere.
I asked the Minister two specific questions about the proposed second terminal but he has not answered either. Can he point to any example of competing terminals in any European airport? Is there a model we are following?
There is not.
If this is such a wonderful idea in the eyes of the Cabinet, why do other airports not do this? On the concept of competing terminals, which has not been questioned anywhere in the media during this debate in recent months, what is the basis on which two terminals would compete given that the critical areas of baggage handling and check-in are in the control of airlines and airport charges, a major issue, are controlled by the aviation regulator? Does the Minister accept that the concept of competing airport terminals is flawed? Why is the Cabinet continuing with this nonsensical debate?
I have enunciated clearly my point of view that there are no independent competing terminals. Deputy Shortall is right. The only place this was tried was Montreal.
Toronto.
Toronto. Airport charges in the private facility turned out to be four times higher.
I know, but the Minister is a member of a Government that is suggesting we should have competing terminals.
I am giving the Deputy my perspective as Minister for Transport on the matter, which is what she asked me to do. There are no examples of competing terminals and I am concerned about how this would work when it does not work anywhere else in the world.
Why are we toying with the idea?
The Minister is not.
Where it has been tried, it was an abject failure ultimately resulting in the State buying back the terminal at an exorbitant cost.
We know that but why is the Cabinet considering it?
Views have been expressed and questions have been asked. People are entitled to ask legitimate questions about many issues, with which I have no difficulty. To answer the Deputy's question directly, I spent every day over recent months dealing with this issue. I am on solid ground when I say I agree with the Deputy that I cannot find an example of the type she has enunciated today anywhere in the world. I have stated this publicly.
Then it is a flawed concept.
The type does not exist.
It does not exist.
All I can do is make a judgment call on the basis that, where it was tried, it was an abject failure with charges being four times higher in the privately run facility and the state eventually buying it back. Of the 13 expressions of interest, one that was submitted by an airline argued against the concept of an independent or competing terminal, only five could be regarded as clear in terms of concept and location and none gave clear answers regarding the financial and economic dimensions of such a proposal. Only one gave a suggestion of a landing charge, which was in the order of €8.50 in comparison with the €4.90 charge in Dublin Airport at present. So much for this type of competition.
I am inclined to agree with the Minister about the lack of examples of competing terminals and that this is a step in the dark. Does the Minister agree that it was irresponsible of his Department and his predecessor to search for expressions of interest and to put 13 firms and a 14th firm more recently to the expense of making proposals if there was no intention of pursuing them? I have heard the Minister express the view that his mandate and that of the Dublin Airport Authority is to provide the services of Dublin Airport by maximising the use of its lands. Does the Minister not agree that the constrained nature of the site means that it is too small and that every report that has ever been made on the matter, including the DAA's, states the location will always be inherently inefficient, not just during the construction phase, and will need to be replaced by the famous third terminal even if we do go ahead with this project?
Why is the Minister fixated on this site given all that is wrong with it and the indications from reports that it is not the right site? Has this to do with not upsetting the Taoiseach and, therefore, not upsetting the Taoiseach's unions? Surely the only issue that matters is that Dublin can compete with other capital city airports and not just with terminals within Ireland. This is the type of competition we need and the type we must face up to. What matters is getting the right site that is big enough to give us growth capacity and not who owns it. The DAA must go out and search for business. It has had it so easy as business has come to it but it has made no effort to accommodate this business over the past ten years. Extra capacity is needed if the DAA is to compete with other airports.
On the information that has been presented to me, I disagree with the Deputy in terms of some of the suggestions that several sites that have been decided on are inadequate. As I said in my answer, it is a matter for the Dublin Airport Authority to choose a site. I have no evidence that suggests the authority, as a new body of fine people, many of whom are experts in this area, will knowingly do something that is not in the interests of Irish aviation, airlines and passengers.
The DAA and the construction of a new second terminal must have the airlines on board as they are the key users of the facility. In a wider context, it is obvious in light of the current configuration of Dublin Airport that there is a tremendous opportunity to create one of the best hubs in Europe in terms of integration between long haul and short haul for the airlines and ease of access between passengers and their baggage, as Deputy Shortall said. These matters are for the DAA to address. Deputy Shortall is correct in that the Commission for Aviation Regulation is the independent arbiter that will dictate the charging regime in the airport. The regulator will not allow for over-capacity but only allow the costs of what is required for capacity. We will plan on this basis. I do not have an issue with planning ten or 15 years beyond what we believe will be required until 2015 but we must have an airport that is for the Irish people.
On behalf of the Government, I am the guardian of the taxpayers' investment in this facility which is one the key strategic pieces of infrastructure in this country. The airport should be in State hands. I have not seen evidence from any other country to suggest otherwise and I want to progress on this basis.
I welcome the Minister's acceptance that the very notion of competing terminals is flawed and it is about time someone said this. That not a single person in the media has questioned this concept over the past six months or so is extraordinary. Does the Minister accept that the battle that has been taking place inside the Cabinet in recent months is nonsense given that there is no such thing as successful competing terminals? Why has the Minister not convinced his partners in Government that this is nonsense? Why can we not have a decision to proceed with the much needed expansion of the facility in Dublin Airport? Do the Minister's partners in Government not understand the logic of what we are talking about? Has he not managed to convince them that there is no such thing as successful competing terminals? For the sake of the travelling public, will the Minister get that message across to them and get on with the job of expanding the facilities? The issue at Dublin Airport is capacity, not competition, and the Minister should be able to convince his partners of this.
I feel there is a breakdown in communication between the Minister and the Dublin Airport Authority. He keeps saying it is up to the authority to provide a terminal, which is true, but it is not up to it to provide it on its own lands. That is a where there is a difficulty between the Minister and the Dublin Airport Authority. When the chairman of that authority appeared before a committee he stated clearly that if he were asked to provide a terminal, his responsibility would be to maximise the value of the airport's lands. Therefore, he could only present the airport's lands as the site for the terminal. However, he went on to say that if he wanted the use the optimum lands, the site would not necessarily be the airport's lands. That is the nub of the issue. It is an issue of the site having adequate capacity. I realise that the regulator will not give approval for an increase in landing charges beyond what is required at present, but at least we must have a terminal which we can improve in the future.
I do not disagree with that view. In response to Deputy Shortall's remarks, there has been considerable misrepresentation in this debate. People are entitled to ask legitimate questions, but the word "competition" and "being competitive" have been completely mixed up and presented as meaning the same thing, but they do not.
The Minister should tell his partners in Government that.
What we want is a competitive, efficient, well run, well managed——
That is for what the unions have been fighting for years.
——airport for the benefit of our people, namely——
It is not us but the Progressive Democrats that the Minister needs to convince.
Order, please.
——the customers, passengers and the airlines using the airport. If people want to ask questions, they have every right to do so——
But not to hold up the decision.
——to come up with an optimum solution.
In regard to what Deputy Olivia Mitchell said, there is no disagreement on that. I want the optimum result at Dublin Airport in terms of the terminal. Practically all the airlines agree on what the site should be for much greater reasons than simply putting in place a piece of infrastructure. That is what I have been trying to say for the past few months.
I am aware of what airlines have been saying to the Dublin Airport Authority. Everybody is suddenly thinking outside the box. They are taking account of the bigger picture in terms of what they can get in benefit from the right decision being made on the terminal. They are also taking account of how they can increase the traffic, improve operations and marry the clearly tremendous opportunities in short-haul flights, the low cost end of the business which is growing on all routes. Equally, there is massive opportunity for Aer Lingus in terms of long-haul flights. If we got a coherent result on the operational side between long-haul and short-haul flights for the benefit of the passenger, we would be in business. Dublin will be a formidable hub compared to some of the other European airports.
We must proceed to the next question.
People must consider the wider picture. This is about Ireland, not individuals. I am not in this business to look after any particular individual but to make a decision on behalf of this country.
I have called Question No. 3.
Did the Minister make that speech to the Cabinet on Tuesday?
The Minister is responsible for making this decision but he has not done so. That is the precise point we have been making.
We are way over the time allocated for this question.
The House knows well where I stand on this issue.
The Minister is shifting to the left.
The Minster is the person responsible for making this decision.
3 Ms C. Murphy asked the Minister for Transport when it is intended to introduce an integrated ticketing system into the public transport system. [15718/05]
In March 2002, the Railway Procurement Agency was given statutory responsibility for the delivery of an integrated ticketing system. The proposed contactless smartcard-based integrated ticketing system will enable a passenger to use a ticket on one or more scheduled public transport services, by road and rail, irrespective of the transport operator involved. It will be introduced on a phased basis, initially in the Dublin area. The roll-out of integrated ticketing using smartcard technology is being phased in, in line with international experience.
In April 2004 a private operator, Morton's Coaches, in conjunction with the RPA and as a "proof of concept", successfully launched smartcards on its services. Last March, another step was taken with the launch of smartcards on Luas services. The Luas smartcard deployment will help obtain important feedback from passengers and provide operational experience for the next stage of integrated ticketing.
The RPA projects that Dublin Bus, and possibly some additional private operators, will follow with smartcards on their services by early next year, with the DART projected to follow in late 2006. In early 2006 passengers should be able to travel on both bus and Luas services in Dublin using one integrated smartcard.
The introduction of some level of integrated ticketing would be welcome. The notion of this idea dates back to the putting in place of the Dublin transportation initiative which was drawn up to make an application for European funding because Dublin city had become uncompetitive due to congestion. We would laugh if we compared the level of congestion at the time the initiative was put in place to the current level. The manner in which it is proposed to introduce the system seems piecemeal. That flies in the face of what integrated ticketing means. The system should be integrated from the day it is introduced. There is an element of paralysis in introducing integrated ticketing in that what is at issue is more to do with who runs the services rather than the arrangements at the other end, which should be the issue in a fully integrated ticketing system.
The report on an integrated ticketing system was received by the then Minister for Transport, the former Deputy O'Rourke, in 1999. We have now heard that there will a phased roll-out of the system. While I welcome the fact that there will be some level of ticketing integration, and we are moving towards a fully integrated ticketing system, I am disappointed the full system will not be introduced in a shorter timeframe and that the system will not be fully integrated from the day it is introduced.
From the point of view of the amount of money that was spent on the transport system——
The Deputy is required to put a supplementary question.
The Minister referred to the phased introduction of the system. Will it be phased in as between private and public service providers or exclusively by public service providers?
I want the system to be available to everybody who provides a public transport service here. That is the way the customer wants the system to work, namely, to facilitate ease of movement in terms of whatever mode of transport the customer chooses to use. I wish to clarify that the timeframe for the introduction of this system is four years. That 2002-06 timeframe is the best in terms of the world norm.
I would not hold my breath on that.
We rolled out the Luas this year.
This is not rocket science.
I know that. It took six years for a similar development to be put in place in London.
The Minister has not delivered.
The timeframe for the introduction of this system is 2002-06. I am happy that the system is on schedule. Hong Kong has the most successful such system in the world and it took four years for it to be rolled out. We have started to roll out our system. We have it in place in the private sector and the public sector. I hope that Bus Éireann, the DART and all the other public transport deliverers in Dublin will be using this system by next year. That is the timeframe that was set for this system, and we will meet it.
The Minister of State, Deputy Callely, might deliver it.
We will meet that timeframe — it is as simple as that.
Question No. 4 answered with QuestionNo. 2.
5 Mr. Eamon Ryan asked the Minister for Transport if he will report on the analysis his Department has carried out on the future tolling of the M50. [15771/05]
My Department has not, to date, carried out an analysis on the future tolling of the M50. The statutory power to levy tolls on national roads and to enter toll agreements with private investors in respect of national roads is vested in the National Roads Authority under Part VI of the Roads Act 1993, as amended by the Planning and Development Act 2000. Tolling of the M50, therefore, and any changes to the current tolling arrangements, is a matter, in the first instance, for the NRA. Given the transport policy issues involved, however, my approval would also be required for changes in current tolling arrangements.
In the context of the overall upgrade of the M50 the NRA is negotiating and seeking to agree with NTR a strategy for the upgrade of that section of the M50 operated by NTR, that is, the section between the Navan Road and Galway Road interchanges and the West Link toll facility. A key objective of these negotiations will be to agree a strategy for the move to barrier-free tolling on the M50. The conduct of these negotiations is a matter for the NRA and the final outcome will be submitted for my approval. For the sake of clarity, I have asked both sides to achieve this. Barrier-free tolling is a must.
The Minister has my sympathy, having inherited the greatest mess in the history of transport, a mess which is not of his making. Last week we heard of the incredible waste of €20 billion expenditure on roads in terms of the building of 800 kilometres of motorway leading to this one road. I am sure the Minister will accept, as An Bord Pleanála and the Taoiseach have, that it will not work. Does the Minister's Department not have a role in deciding funding of the upgrading of the M50? Does it include an analysis on whether we should have an extension of tolling on the West Link toll bridge to pay for the second stage of the upgrade of the M50? Is the Department engaged in discussions and negotiations on the process and, if not, can we take it for granted that the NRA's position, which was presented to a committee of this House, that the road will not work means there will have to be different demand management measures, which An Bord Pleanála requires? Will this require a different tolling system on the M50 because everyone acknowledges that the current West Link toll facility has no demand management facility? If the Department is not engaged in that process, I presume the NRA's position is the one that will be advanced by Government. Has the Minister a view on the matter or when will his Department become involved? I understood that it was already involved.
I set out the legal responsibilities in this regard. Under various Acts, the National Roads Authority is charged with these responsibilities. I have a view which I expressed directly to National Toll Roads and the NRA. I want to move to barrier-free tolling on the M50 as quickly as is humanly possible. I have asked for that.
No one disagrees——
The Minister without interruption.
No one disagrees with barrier-free tolling. That is not the issue.
Let me move to my second point. We are increasing the capacity of the M50 by 50%, which is substantial. It will be of great benefit to road users in that area. There is no doubt that we will have to move to demand management of traffic in Dublin. However, before moving fully to that position, I want to give people in Dublin and those who visit the capital city a choice of public transport access into the city. This is the fairest way to deal with the matter. I will not penalise or punish people by not having in place alternative facilities but, ultimately, the growth in traffic will require demand management.
Does the Minister accept that the position of the engineer consultants presented to An Bord Pleanála's hearing, the Dublin Transportation office engineers and the NRA itself was that such demand management measures should not be in the form of traffic lights on these freeflow junctions and that it would have to be a new form of tolling? Does he accept that his Department should carry out an analysis on whether it should buy out the West Link toll bridge and consider an alternative system which would provide some sort of demand management facilities, as is being considered for the M25 widening in London? Does the Minister believe this is the way we should go or what is the alternative?
I already answered the Deputy's question twice, but obviously he does not agree with my reply. I agree that there must be demand management in the future. There are many different ways of doing so; it does not necessarily mean tolling all the exits and entrances on the M50. This is one of the options which is suggested. I agree with the Deputy that there should not be traffic lights which would stop the flow of traffic. There needs to be a freeflow traffic system.
Does the Minister accept that we would also have to buy out the West Link?
The income streams from the toll bridge are used by the State for the upgrading of the M50, which is extremely important and much warranted. I welcome the project which has been approved by An Bord Pleanála and is now under way.
That use of future funds from the West Link toll bridge to pay for the M50 relates to the extension of tolling on the West Link bridge from 2020 to 2035. Given that the toll facility has no demand management functions and never can have, how can the Minister propose that approach when he admitted that by 2020 we will need some sort of demand management measures? Why is he tying us into a tolling system that is all about revenue generation and not about demand management? It makes no sense.
The Deputy is missing my point. I have already spoken to the NRA and NTR, two commercial operations. The NRA operates independently but on behalf of the State. It must negotiate with NTR. It is exploring many options with regard to substantial improvements and tolling on the M50. I look forward to the conclusion of the discussions and to the NRA coming back to me with proposals. I have a very open mind on what can be achieved. I want to achieve a much better operation of the M50.
