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Dáil Éireann debate -
Wednesday, 3 May 2006

Vol. 618 No. 4

Other Questions.

Air Services.

Pat Breen


69 Mr. P. Breen asked the Minister for Transport the guarantees or undertaking he will give to employees of Aer Lingus at Shannon Airport post-privatisation, in view of the fact that Aer Lingus has not signed an agreement with Shannon Airport for the retention of transatlantic services post-open skies and has failed to develop new routes to the US or Europe from Shannon; and if he will make a statement on the matter. [16085/06]

In recent meetings with the Aer Lingus trade unions on the future of the company, they raised a number of concerns of staff in respect of the planned IPO, including job security and pensions. I have mandated Aer Lingus management to engage with the trade unions to seek to address those concerns. Decisions on new routes are a commercial matter for the company. Late last year, I secured agreement with the US authorities on transitional arrangements for Shannon Airport in the context of proposals for an EU-US "open skies"' agreement. At that time, I sought and received assurances from Aer Lingus that in the context of a level playing field for the airline and its competitors, it would maintain the current level of transatlantic traffic — approximately 400,000 passengers per annum — with regular year-round scheduled services between Shannon and Boston and New York. As everyone can see, the numbers travelling through Shannon, Cork and Dublin Airports have risen substantially in the past 12 months.

The Minister's reply is very short and lacks detail. How will the pension shortfall of €120 million be made up in the event of the privatisation of Aer Lingus and how much does the Government propose to invest in the pensions? I ask this question in the context of Shannon Airport because I represent that area and I am very concerned about developments in it, particularly the gradual erosion of services in the airport by Aer Lingus in recent years. Does the Minister know how many direct flights Aer Lingus operates to the US out of Shannon Airport? He does not know.

I will answer the Deputy's question when he has concluded.

Aer Lingus only operates two direct flights to the US. In his reply to an earlier question, the Minister stated that Aer Lingus hopes to increase its flights to the US but that these flights would only operate from Dublin Airport. He did not mention Shannon Airport. Aer Lingus operates one flight to Boston four days a week and one flight to Heathrow Airport. These are the only direct services to the US which it operates out of Shannon Airport. There has been a considerable erosion in Aer Lingus's commitment to Shannon Airport in the past few years. In addition, why has Aer Lingus not appointed a manager in Shannon Airport?

Is Aer Lingus not flying in the face of other carriers which have increased their capacity out of Shannon Airport? These airlines are very happy with business in the airport yet our national airline is cutting services every day. Why have no new services operating out of Shannon Airport been introduced since the events of 11 September 2001? What will happen in a post-open skies sector? Most importantly, why has Aer Lingus not signed an agreement with the Shannon Airport Authority regarding transatlantic services after the introduction of the open skies policy when other airlines have no problem signing such an agreement with the authority?

The pensions issue is being resolved. Proposals have been communicated to the company, the unions and the employee share ownership trust. The company's scheme is a private pension scheme operated by the trustees of the company, rather than a State pension scheme. Very effective solutions, involving a combination of increased staff, employer contributions and a possible upfront payment arising out of the sale of Aer Lingus, are in place. These details are being worked out.

The Deputy is aware and might acknowledge that Aer Lingus is by far the largest carrier on the transatlantic route out of Shannon Airport. The company carries more than 400,000 passengers per annum.

Through Dublin Airport.

Aer Lingus operates direct flights from Shannon Airport to the US.

These flights travel via Dublin Airport.

Aer Lingus operates direct flights from Shannon Airport to the US every day.

These flights go to the US.

These flights travel via Dublin Airport. I wish to give the Minister the facts before he attends a lunch tomorrow hosted by Shannon and District Chamber of Commerce.

The Deputy need not worry. I have the facts, which are very clear. The Deputy seems to suggest that a plane should fly out of Shannon Airport even if there is no one to get on it.

US carriers are getting tremendous business out of Shannon Airport yet our State airline is neglected at the airport.

The Deputy will be allowed to respond. He should not interrupt when the Minister is replying.

I am sorry, but I want answers from the Minister.

As the Deputy knows, there are increased opportunities to many destinations in the United States. We only have access to five cities at present.

We do not have the aeroplanes.

We want to substantially increase the number of cities. There are 22 other destinations in America that are interested in having direct connections with Ireland, in light of which Shannon has considerable potential. It is the restriction of Shannon Airport that has affected it and Ireland in terms of our access to the United States of America. It is nonsense that we can only have direct flights to four destinations in America because of our historical agreement. We are crucifying ourselves despite the significant opportunities that exist.

When I met the Secretary of Transportation, Mr. Norman Mineta, in America, he understood and agreed with our requirement for a transition period for Shannon Airport to move to an open skies basis. The opportunities for Shannon, Dublin, Cork and Ireland are considerable in an open skies arrangement, which would undoubtedly see capacity from Shannon Airport increase, new services from Cork Airport and increased capacity and flights from Dublin Airport.

The Minister is living in cuckoo land. US carriers are increasing their services out of Shannon Airport yet our State airline is not. What will happen when Aer Lingus is privatised? It flies in the face of Government policy by centralising everything in Dublin. It is not operating in the interests of balanced regional development and the Minister is standing by it. In an open skies scenario, carriers will fly to the capital city. That is the record in Europe. In fact, 92% of airlines in Europe fly into capital cities, not regional areas. This will happen in Ireland unless the Minister protects Aer Lingus, Shannon Airport and the people of the mid-west. It is the best area through which to enter Ireland but is not being marketed enough. The Minister is standing by and letting this happen.

I have strongly advised people in the Shannon region to focus on the future. The Deputy is correct in that there is a significant opportunity to go to America to look for new markets instead of having an argument with me about the past. The world has changed. An open skies agreement is the reality. Shannon Airport's objective should be to accommodate many airlines and not just Aer Lingus, which is by far the largest carrier of passengers on the transatlantic route from Shannon. There is no question about that, but we should try to expand on US destinations from Shannon and vice versa. This is what the future will hold.

The Minister knows there is only one direct flight from Shannon Airport to the US, that is, to Boston.

On the open skies agreement, today, I read in the International Herald Tribunethat the US Government is responding to the demands of Congress and the agreement cannot go ahead. We do not know for how long this will be the case but the agreement will definitely be delayed. Previously, the Minister mentioned that there would be an interim agreement if that occurred. Is the interim agreement contingent on open skies or can it proceed? The Minister said that he would go to America to secure the interim agreement of three extra destination airports and the three-for-one rule rather than the one-for-one rule. If Aer Lingus is not to use Shannon Airport, it is important that other airlines can. It is also important for the sale of Aer Lingus that investors are certain about its potential markets.

In case there are any misunderstandings, Aer Lingus is very keen to use Shannon Airport. It is the largest carrier of passengers from Shannon to the United States.

A bit of competition would not do it any harm.

Deputy Breen might believe that he is making a point to me but he is talking to a wide audience. The people in Shannon Airport should stop sending out such a negative, depressing image about it.

We are not sending out a negative image. Why has Aer Lingus not appointed a manager at Shannon?

The Deputy is damaging his region by continuing in this way.

Crews are disappearing.

I was with the Deputy's colleagues in the United States less than a month ago.

The Minister should go to the mid-west and see what is happening there.

Order. We will move on to the next question.

The Deputy certainly has no interest in promoting Shannon Airport. He is here knocking his own region and it is very sad.

I am not talking nonsense. I am stating the facts.

The Deputy should be a bit grown up and start saying positive things about his airport.

I live in and represent the constituency. I am stating the facts.

The Chair has called Question No. 70.

The Minister has not answered my question about the interim agreement.

One way or the other, that arrangement is crucial for Ireland in regard to open skies. The open skies agreement will be in place before the end of the year.

Today, it was announced that the agreement would not be in place.

I was aware of the issues in Congress a week ago.

Public Transport.

John Gormley


70 Mr. Gormley asked the Minister for Transport the public transport operators that are ready to facilitate the introduction of integrated ticketing in the Dublin area; the reason for the delay in the outstanding carriers becoming operable; and the expected timeframe for completion. [16283/06]

Simon Coveney


83 Mr. Coveney asked the Minister for Transport his views on whether the amount spent on delivering integrated ticketing to date has represented value for money; and if he will make a statement on the matter. [16207/06]

Simon Coveney


130 Mr. Coveney asked the Minister for Transport when fully integrated ticketing will operate on all Dublin public transport; if the delivery of integrated ticketing will continue to be managed by the RPA; and if he will make a statement on the matter. [16208/06]

I propose to take Questions Nos. 70, 83 and 130 together.

The Railway Procurement Agency, RPA, is the statutory body responsible for the delivery of a national multi-operator system of integrated public transport ticketing using smartcard technology. The RPA is introducing the system on a phased basis in line with international experience in the Dublin area initially and with the involvement of public transport providers. As part of the phased introduction of smartcard-based integrated ticketing, Morton's Coaches, in conjunction with the RPA and as a proof of concept, successfully launched smartcards on its services in April 2004.

Another step was taken in March 2005 with the launch of smartcards on Luas services. The Luas smartcard deployment continues to help in obtaining important feedback from passengers and provide operational experience for the next stage of integrated ticketing. More than 11,000 smartcards have been purchased to date for use on Luas services. In addition, both Dublin Bus and Irish Rail continue to offer existing bus-rail ticketing arrangements. Both companies are also developing plans to introduce smartcard technology and have been requested to pursue the matter on the standards and requirements of the RPA. They also have tickets that integrate with Luas services.

Following an inconclusive procurement procedure in 2005, the RPA, in consultation with the different State and private transport providers, in particular Dublin Bus, has presented proposals to my Department for a revised implementation plan and budget with associated time frames. These proposals and the amount spent to date are currently the subjects of examination in my Department. I expect to reach decisions on the next steps in the matter in coming weeks with regard to the outcome of a peer review of the project, which has been requested by my Department. This review is being undertaken in accordance with Department of Finance guidelines designed to ensure better value for money for public expenditure and ICT projects.

Would the Minister agree that it is remarkable that 12 years after the original Dublin transportation initiative report in May 1994 set out the clear recommendation to move towards integrated ticketing as soon as possible, we have no effective integrated ticketing? Is this not a sign of remarkable failure on the part of this Government after nine years in power?

Would the Minister also agree that instead of following the recommendation to request other operators to provide assistance to the RPA in this matter, international experience shows that the only effective way to get proper integration is by effective regulation, wherein a body, be it the Dublin Transportation Office, RPA or Department, told the agencies that they must integrate? Is it not the case that the blocking agencies in developing integrated ticketing have, to a large extent, been the public transport bodies in this city, be they Dublin Bus, Irish Rail or others? I want the Minister to comment on this matter directly. If he believes this is the case for whatever reason, such as commercial rivalry or the agencies' fears about confidentiality, is it not incumbent on his Department to start taking real action and enforce the recommendation set out 12 years ago in the Dublin transportation initiative plan? Why have we failed for 12 years? Why is the Government still just requesting and not ordering proper integration?

The Deputy is right in that the full legal mandate for delivering integrated ticketing was given to the RPA. It has made substantial progress in the introduction of a smartcard that operates on Luas services and a private sector coach company, Morton's Coaches. I have held numerous discussions with the other public transport operators in Dublin to try to bring about a resolution in this issue. It has been very frustrating. Some of the practices involved have been unacceptable. I have asked that a peer review of the project be carried out under the Department of Finance's guideline rules, which is currently taking place. When it has been completed, I will decide on the next step. That is the current position.

I understand the Morton's Coaches initiative has more or less collapsed and I know the Railway Procurement Agency had difficulties in recruiting someone to provide the schemes as envisaged. However, the main difficulty is the obstruction being provided by the State public transport companies which do not wish to participate or co-operate in any way with either other State operators, such as Luas, or private operators. It is unacceptable that they should hold the public to ransom because, effectively, they are performing the function of the Government.

The Minister must step in and the only way to deal with this is to put in place a regulator who will knock heads together and insist on how these bodies should perform. The last person to be considered in this regard is the consumer. While the providers are being looked after, the poor hapless people who try to commute cannot get any kind of integrated ticketing system.

Some €16 million has already been spent on this project already and we are still without a system.

It is less than that amount.

I understand that Dublin Bus is not in favour of integrated ticketing or, if there is to be such a system, it wishes to operate it. This is not acceptable and it obliges the Minister to take the initiative and to knock heads together. There should be no more reviews or reports. If we are serious about making the kind of investment envisaged in Transport 21, facilities of this kind must be provided. It is absurd to suggest that the taxpayer would make the kind of investment in public transport that is envisaged without ending up with an integrated system featuring integrated ticketing.

As for knocking heads together, I assure the Deputy that I doubt whether many bones remain to be cracked on this issue. This is an important project because with the advent of the metro and Luas, integrated ticketing has significant positive potential, major cost implications as well as major design implications for stations, etc. Hence, this is a serious and very important issue, which is why I have asked for a peer review. As I should receive the results within a few weeks, it will not be a long process.

The work done to date was valuable and from a perspective of some distance, it was money well spent. The real question is how to proceed to the full-on, smart card integrated system for all modes of transport that is required for Dublin. Some years ago, it was decided to opt for the latest smart card technology. While people continue to show me old-style metal magnetic strip tickets, they are not holistic smart card integrated transport tickets like those which I wish to develop. However, I do not disagree with many of the sentiments expressed.

The public finds it hard to understand how it has not been possible to introduce integrated ticketing.

The Deputy's colleagues have explained it well.

This is not rocket science. Tens of millions have already been spent and a timeframe of at least five years before it will be close to introduction has been mentioned. The Minister must take charge of the situation. Does he accept it was a mistake to give this task to the RPA given that it had no experience in network management? The criticism of its work to date is that it has over-specified the tender. It was obliged to buy in a major amount of expertise because it was not available in-house. The tender process has now been aborted and we are almost back to square one. This is a major problem. When will the Minister take charge? When can we expect to get value for money and when will we get integrated ticketing?

The Deputy is to be congratulated on receiving an exceptionally good briefing from Dublin Bus. That is the message which it has attempted to present to me for some time. However, there is no benefit to the customer in playing the blame game as an integrated ticketing system is required. I have had more meetings on this issue than on any other subject and it has been a source of deep frustration. I am not prepared to spend any more money on it until I can be sure, on behalf of the taxpayer, that this system will be put in place and that value for money is secured. I have an open mind on the money which has been spent to date. It is good and bankable.

We have nothing to show for it.

The question is how to take the project forward, given the advent of all the different modes of transport available under Transport 21. It has major cost and design implications for stations etc., and for the integration of Luas and the metro in Dublin. This must be at the forefront. We may now have a methodology whereby all see the reality and value in a fully operational smart card integrated system.

The Minister is apportioning the blame for some of the delays on the public transport companies such as Dublin Bus. In that context, how can the Minister state, in response to my question earlier, that the RPA had sufficient power under the regulations? If it had such sufficient power, why did it not enforce such power with Dublin Bus if it did not co-operate?

The Minister stated that some practices that went on were unacceptable. Will he provide details of what he meant about how some of the operators related to this issue? For clarification, is the peer review group of the project being carried out by the Department of Finance? Was it requested by that Department? What prompted it to carry out such a review and when will it be completed?

The Deputy may recall that the peer review group was established in the wake of the PPARS issue. My Department, rather than the Department of Finance, asked for this review to be carried out. We asked it to review the project to establish the current position. I should have the results of that review within the next few weeks. I hope it will provide a map of the way forward.

I said in my reply that the Department brought in an external expert to consider the status of the project. I saw a very interesting presentation as to its significance. Having seen the external expert's presentation, I believe that no one knew what they were talking about. Everyone concentrated on one issue, namely, the card. However, in terms of a fully operational integrated smart card system, some six or seven issues must be addressed. As far as I can gather, only one issue was being addressed. Significant fundamental issues about moneys, transfers and other governance issues were not addressed. This brought certain concerns home to me in terms of going forward. While I hope the review group will provide me with its views on the next step as far as the technology is concerned, carrying on as we are at present will not deliver the type of smart card technology or an integrated ticketing system that the public deserves.

I call Question No. 71.

Will the Minister leave it with the RPA?

Did no one know what they were talking about? If no one did, is it not the Minister's job to sort it out?

I may have other options.

We should turn to Question No. 71.

No one knew what they were talking about.

Yes. It is interesting. Everyone focused on a single issue, namely, the card.

The Minister has spoken about pulling everything together.

I found out about this because I pulled everyone together.

Did no one know what they were talking about for 12 years?

I can only answer for the time when I had responsibility. I seem continually to answer for what other people did in their time in other Departments and taking the blame for it. However, I am dealing with this issue, even though it was not originally put together by me.

We should move to Question No. 71.

Regional Airports.

Jerry Cowley


71 Dr. Cowley asked the Minister for Transport his views on whether Knock international airport is one of Ireland’s international airports; if he will support an investment programme for the airport which will provide increased levels of service to the area as a whole, increase tourism in the region and encourage economic growth in light of the airport’s significant regional development; and if he will make a statement on the matter. [16287/06]

My Department assists Ireland West Airport Knock through a range of financial support mechanisms. Since 2000, the airport has received approximately €6.5 million in operational and capital support directly from the Exchequer. This ongoing support has greatly assisted the airport to maintain viable operations and to grow its business, especially on UK routes operated by low cost air operators, and I understand the airport constantly seeks to expand its range of services. My Department will continue to assist Ireland West Airport Knock in line with the relevant EU guidelines on financing of airports and the Department of Finance capital appraisal guidelines.

A total of €100 million will be available for investment in development and safety related infrastructure in all regional airports under the Transport 21 framework. In addition to the continuation of grant assistance for essential safety and security capital expenditure under the national development plan, Ireland West Airport Knock will also be eligible for capital expenditure grants where demand for additional air services can be demonstrated and where an economic case can be made to justify increased investment. A new grant scheme is being devised at present and I expect to be in a position to announce details shortly. In anticipation of the finalisation of the new scheme, my Department is considering a number of projects for the airport which are intended to enable the developing airport to comply with international standards to meet future passenger demand.

In addition to the proposed new capital grants programme, a new scheme of operational grant assistance is being developed in line with EU guidelines which will be launched later this year.

My Department also supports regional air access through the essential air service programme, by providing financial compensation to air carriers on PSO routes, such as Knock-Dublin, where carriers would not be prepared to operate on a commercial basis.

I am grateful to the Minister for his detailed reply to my question. He referred to €100 million which is available for security, development projects and so on at regional airports over five years. Even though it was announced in the budget last December, and it is now May, the money has not yet come on stream. Knock airport is seeking €29 million for an apron area in particular. It is facing congestion this summer because the planes that have been landing at the airport have been successful in increasing their flights, therefore, there will not be adequate apron area for these aircraft to turn around. There is a difficulty with the large aircraft landing at the airport, which has the third largest runway in Ireland.

When will the €100 million be made available, which would go a long way towards providing Knock airport with the €29 million it requires? While it was announced in the budget last December, it has not been made available so far.

The Deputy is correct that €100 million capital is available under Transport 21 for regional airports. He may be aware that the EU has changed its guidelines in terms of the ability of states to invest in regional airports. Much of this is as a result of the activities of Ryanair and other regional airports which makes it much more difficult to make money available for specific airport projects. However, I hope the discussions are nearing completion in Brussels. We had to achieve an agreed set of guidelines with Brussels on the basis on which we would make money available to regional airports, which is why there has been no drawdown so far.

As the Deputy may be aware, a number of different plans have been submitted by Knock airport. We have now reached the point of putting in place the more realistic plans. I recently flew to Knock, which is a fine airport. I am aware of the issue of the apron capacity adjacent to the terminal. Clearly there is an issue in terms of expansion. I gather from members of the board of Knock airport that they would like investment to begin the project. As soon as the discussions in Brussels for a framework for capital funding for regional airports conclude, we will hone the proposals from Knock to see what the priority is and how we can roll out the resources required.

I thank the Minister for that detail. When did the application go to Europe? I realise the Minister must get permission from Europe for this funding, but why did it take so long to sort out an issue which was announced last December? Can the European dimension be speeded up because the Minister is waiting for a decision from Europe to be able to give the go-ahead for the project? Will the Minister clarify why the matter has taken so long?

There is no proposal in Europe about a specific airport. We had to agree a framework with Europe. Europe would prefer if the Government gave no money to regional airports. As the Government disagrees with that point of view, it will continue to support regional airports. The Minister for Finance made available an extra €100 million for the development of regional airports because, spatially and economically, it is important to strengthen the regions.

We have been discussing the matter in Brussels for the past three or four months. We are approaching the end of the discussions and I hope the talks will conclude within the next week when there will be a clear framework to get into the individual discussions with Knock, Waterford and the other regional airports.

State Airports.

Phil Hogan


72 Mr. Hogan asked the Minister for Transport if he is satisfied with the delay in the publication of the business plans of the three State airports; the progress made in establishing each one as an independent authority; if he has personally intervened to accelerate this process; and if he will make a statement on the matter. [16195/06]

Kathleen Lynch


75 Ms Lynch asked the Minister for Transport the way in which he intends to deal with the debt at Cork Airport; and if he will make a statement on the matter. [16215/06]

Breeda Moynihan-Cronin


101 Ms B. Moynihan-Cronin asked the Minister for Transport his views on the delay in the break-up of Aer Rianta into three independent airport authorities; if he has received the business plans for each of the three airports, which were due in April 2005; and if he will make a statement on the matter. [16246/06]

Phil Hogan


120 Mr. Hogan asked the Minister for Transport his views on the opinion of the Dublin Airport Authority that Cork Airport should carry the debt burden for the cost of the new terminal at Cork Airport; and if he will make a statement on the matter. [16196/06]

Jan O'Sullivan


167 Ms O’Sullivan asked the Minister for Transport the way in which he intends to deal with the debt at Shannon Airport; and if he will make a statement on the matter. [16229/06]

I propose to take Questions Nos. 72, 75, 101, 120 and 167 together.

The State Airports Act 2004 provides for the establishment of the three State airports at Dublin, Shannon and Cork as fully independent and autonomous authorities under State ownership. New boards were appointed at all three airports in 2004. The boards of Cork and Shannon airports are now charged with making preparations to assume responsibility for the ownership and development of the airports. They are also empowered to undertake certain management and operational functions on an agreed basis with Dublin Airport Authority during the interim period.

Under the Act, before Cork or Shannon airports can become fully independent, the Minister for Fiance and I must be satisfied as to the financial and operational readiness of the airport authorities. Accordingly, each authority is required to prepare a comprehensive business plan and obtain our approval for these plans before any assets can be transferred. The three State airport authorities are continuing to work on the preparation of their business plans with the Dublin Airport Authority co-ordinating the process. In this context, there is a range of issues that need to be considered carefully. These include the unsustainable cost base at Shannon airport, the recent airport charges determination for Dublin Airport by the Commission for Aviation Regulation and the optimum mechanisms for the financing of the new terminal in Cork. These are complex issues that the airport authorities must consider carefully and, as I indicated previously, I have not imposed any artificial deadlines for the completion of this process. My Department will continue to liaise with the airports on the business planning timetable, taking account of the key issues that I have mentioned.

I look forward to the finalisation of the business planning process because of its importance to facilitating the development of dynamic, independent and financially sustainable State airports. The Government objective of airport restructuring must be achieved in a manner which underpins the financial sustainability of all three State airports.

Additional information not given on the floor of the House.

As to the treatment of debt upon transfer of assets, it is clear that the new Cork Airport facilities will benefit greatly the airport's users but the issue of its funding will have to be addressed. The way in which this issue is resolved 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. The future of Shannon and Cork as independent airports should have regard to the capacity of each airport to contribute to its own capital investment programme.

In this period of change for the State airport sector, I expect that the three airport boards will address the challenges and opportunities involved in restructuring under the State Airports Act 2004.