Adjournment Debate.

State Airports.

I wish to share my time with Deputy Dennehy.

Cork Airport is a flagship development resource for the region and anything that would enhance and support the development of the airport as an independent entity is something I would support. I have supported such development for years.

From the outset, I supported the break-up of Aer Rianta, the establishment of independent airport authorities and the assurance of long-term financial viability for the three airports. From the Cork perspective, I do not want any burden placed on Cork Airport that would inherently infringe on its financial viability and integrity for the future. I welcome the investment made in Cork Airport, with a new terminal and the ability for it to cater for up to 5 million passengers.

I have a few questions for the Minister. First, in the event of Cork Airport taking on the €100 million debt to finance the redevelopment, will the airport be financially viable in the future? Second, will there be satisfactory pension provisions for the workers and those currently reliant on pensions? Third, will the geographic integrity of Cork Airport be maintained? We are aware that 40 acres of Cork Airport lands were advertised some time ago for a business park development.

If we could address the issues related to the 40 acres, pension provisions and the viability of the airport so that no inherent burden is placed on the airport that would put it at an economic disadvantage and make it uncompetitive in the market, many people would be satisfied. I hope the Minister can clarify these points.

When Shannon and Dublin airports were redeveloped the funding came from central airport funds. Cork Airport is entitled to the same treatment. It is disingenuous of Dublin Airport management and Dublin-based Senators and others to say that if Cork is funded from central funds, it will lead to a significant increase in individual passenger charges for Dublin passengers. Deputy Kelleher made the point that Aer Rianta has a whole range of prosperous assets and associated facilities. In that context, it looks like the company law requirements on capital maintenance rules could be easily overcome if the will existed to do so.

Cork Airport has done an excellent job in consistently increasing the throughput of passengers. Our concern is that the €100 million debt will stop that progress. We cannot compare Cork with Dublin, the country's capital, where there is a tenfold greater throughput of passengers. Unfortunately, we have experts on one hand telling us that Cork Airport will have no problem absorbing a €100 million debt, while experts on the other hand say it will keep the airport grounded and could destroy it.

I am no expert on aviation matters, but I have worked with Cork Airport management and staff over the years to get us to where we are. I do not want to see that work jeopardised now.

The Minister for Transport, Deputy Cullen, has made the decision to burden Cork Airport Authority with a €100 million debt which is a result of the incompetence of his Government and which had nothing to do with the incoming Cork Airport board. The board will now have to implement measures to service this massive debt.

Inevitably, these measures will have an impact on the travelling public as well as the carriers operating in and out of Cork. This disgraceful decision will set back balanced regional development for years and will make Cork Airport uncompetitive. It must be seen as the worst U-turn from the Fianna Fáil-Progressive Democrats Government, which gave a cast iron promise through the former Minister for Transport to Cork that the airport would begin independent operations debt free and on a level playing field.

I reject the Minister's misleading statement on today's edition of "Morning Ireland" when he said that the debt-free guarantee was conditional on other issues. I reject this because it was a clear cut and unambiguous promise made in writing by a senior Cabinet Minister. If reports are true that the Minister for Enterprise, Trade and Employment, Deputy Martin, was involved in brokering the final deal, he should be ashamed of himself and of his inability to deliver on his Government's promise to Cork.

Fianna Fáil has been indicating that it is right that Cork should shoulder the €60 million overrun on the cost of the new terminal. This is totally unacceptable because it is the incompetence of the Dublin Airport Authority and the Government that has caused the overrun. The overrun is typical of the Government's inefficiency in delivering a host of public projects over budget. The Dublin Airport Authority has already been handsomely compensated for the debt by the proceeds from the sale of the Great Southern Hotels.

The total area of Cork Airport amounts to 600 acres of land in comparison with both Shannon and Dublin which have over 2,000 acres each. If the 40 acres, and not 30 as previously stated, is sold off to developers, it will mean that the future development of Cork Airport is not only at risk but is seriously damaged. It is vital to hold the landbank and the Dublin Airport Authority must be stopped in its asset stripping of Cork. Not only is the future development of Cork Airport being damaged but the master plan for the airport, which was revised and reaffirmed in recent times, is being thrown out the window.

The Minister and the Government have posed serious threats to the development of not only Cork Airport but the whole south Munster region. Apparently it is all right to hand over €600 million to a private company in Dublin to deal with the infrastructural problems there, but it is not acceptable to fund a relatively small amount by comparison, €100 million, to make one of the most important pieces of regional infrastructure in the country viable.

As for the Minister, this is just the latest in a long list of calamities and disasters over which he has presided. The €600 million buy-out of the West Link will not see toll barriers being removed for another year and a half. We had a €60 million electronic voting fiasco and now he is presiding over the Cork Airport fiasco. The introduction of his Transport 21 plan has also seen the delay and cancellation of numerous transport projects in the Cork area. The Minister has failed to respond adequately to these issues in Cork.

It is clear that, under this Government and Minister, Cork's potential is being damaged and the city and county are being overlooked. For this reason, the Minister should resign.

Nothing new there anyway. Talk about consistent.

The Minister should have resigned long ago.

The Minister might give others the opportunity to finish their contributions.

Acting Chairman

Deputy Boyle without interruption.

Deputy Allen's animosity towards me has been consistent for the past five years.

We were proved correct.

Acting Chairman

Deputy Boyle without interruption.

They did not put a barrow full of tarmacadam into Cork Airport.

Acting Chairman

Be fair to the other speakers. There is only so much time.

It is interesting that the Minister has started his intervention on this debate with talk of consistency.

Especially Deputy Allen's inconsistency.

I should state for the Minister's benefit that he is the most consistent Minister in this Government for persisting in wasting public money and, unfortunately, his decision will have ramifications, not only in the €100 million which he has apportioned to the incoming board of Cork Airport Authority whenever it is allowed be independent, but in how that airport has an opportunity to become viable in the future.

He has added insult to that injury by deciding that he knows how to manage such an airport by stating that there will not be any requirement to increase airport charges and he seems to be joined in that point of view by my constituency colleague, the Minister for Enterprise, Trade and Employment, Deputy Martin. He is further joined by another Cabinet colleague, the Minister for Finance, Deputy Cowen, who stated that Cork has got the bargain of the century in being apportioned €100 million of debt. The reality is that if the airport is to be viable, the incoming airport authority will have to be sufficiently profitable to pay the interest on this €100 million loan, the term payments on that loan and to build up a reserve to allow for future developments in this airport. What kind of mad economics is this from the Minister for Transport, Deputy Cullen, who has managed to personify every mad economic infrastructural decision that this Government has put together in the past five years?

The Deputy should name them.

It is no surprise that we in the Cork region are the ones who must live with the consequences.

He cannot name one.

Where are this Government's regional development and national aviation policies?

The lot of them would run Cork into the ground.

Not only have we lived with the burden of this decision not being made over the past number of years, but the consequence has been we have seen the development of the Dublin Airport Authority as Aer Rianta mark II, the proper development of Cork Airport has been hindered as a result and now we are entering into a new period of uncertainty when we do not even know when Cork Airport will become independent on the basis of a consultant's report that has not been made public by a body, which has had intrinsic working relationships with the Dublin Airport Authority. On every ground, this is not only a mess but maladministration of the highest order. The Minister must justify, not only to this House but to the people of Cork, why he has made decisions that will have serious consequences for the infrastructure of our region.

The former Minister for Transport, Deputy Brennan, gave an unequivocal pledge that Dublin Airport would take on the debts of Shannon and Cork airports. He stated that the major regional airports would begin life as independent and debt-free entities. Spelling out Government policy, he emphasised that the Dublin Airport Authority, the country's biggest and most profitable operation, would pick up the bill for Shannon and Cork, counterbalancing this by selling off the Great Southern Hotels Group, a national asset which yielded €260 million for the Dublin Airport Authority. Since then, however, Deputy Cullen has taken over the Transport portfolio and the Brennan promise has been torn up. That seems to be what it is like. There is no longer Cabinet responsibility; it is now the individual Minister's responsibility.

The coalition's clear message for those in the mid-west and southern region is that Dublin comes first and foremost. The Government yesterday approved the payment of €600 million to buy out the West Link toll bridge.

The Deputy is wrong again. Where did that happen, just as a matter of interest?

That will increase, by all conservative estimates, to double that figure. This was done the day before the Government let it be known that Cork Airport Authority must take on a debt of €100 million — a pittance in comparison with what it will pay for the toll bridge, but then again one is in Dublin, the other is Cork. Dublin is to get €600 million of taxpayers' money so that traffic can move freely on the M50, while Cork gets a bill of €100 million which, no matter how one looks at it, will cripple the airport.

For the umpteenth time this Administration has walked away from pledges not worth the breath on which they were uttered. This is an Alice in Wonderland Government where words mean what the Government and the Ministers say they mean, but when we speak of Alice in Wonderland we must never forget Humpty Dumpty. Like Humpty Dumpty, this Government is in for a great fall and I hope the people of Cork will be the ones to push it.

Hear, hear.

This Administration can be fairly accused of being long on promises but short on action. The DAA stands accused of asset stripping and also of riding roughshod over the assurances that both Cork and Shannon airports would start with clean balance sheets. The question the Government has failed to answer is who will end up paying this bill. Clearly, if both Cork and Shannon airports are saddled with heavy debts they will be forced to pass the extra cost on to passengers using those airports. Inevitably, that means that they will be hamstrung from the outset and hard put to compete in what has become and very competitive airline business. So much for regional development. Where is the national development plan?

A new €180 million terminal sounds good to me. It is more than that lot ever did for Cork Airport.

Acting Chairman

I call Deputy Jim O'Keeffe.

What about that?

Was it the Minister's money?

They do not even know what regional development means.

We do; the Minister does not.

Taxpayers pay for it.

It is about access and transport. They do not know.

They refused. They stated they could not put any extra capital investment into Cork Airport. Denis Lyons came in two months later and did it.

The keys are access and transport. Can Deputy Michael Ahern tell us where the jobs he announced for Macroom before the last election have gone?

Acting Chairman

Deputy Jim O'Keeffe without interruption.

At least we did not lie to people.

These Ministers are protesting too much.

Acting Chairman

Everybody has got their three minutes. Please, Deputy O'Keeffe without interruption.

Cork is now to be lumbered with a debt of €100 million by this Fianna Fáil and Progressive Democrats Government, despite its specific earlier commitments to establish the independence of Cork Airport on a debt-free basis. The Minister, Deputy Cullen, has attempted to justify this action, which has been described as a U-turn but which I describe as just an appalling breach of trust with the people of Cork.

On top of that attempt at justification and to rub salt into the wounds of the people of Cork, today the Minister has announced the diversion of airport funding of €22.3 million to an airport in his own constituency. I have no problem with him spending taxpayers' money in Waterford, which has claims of its own. However, it is a supreme irony for this Minister to rob the people of Cork of the €100 million that they were promised on the same day he is spending €22.3 million on the airport in his own constituency.

Is Fine Gael in Waterford against it? Is that the Fine Gael position? I will raise it in the morning and ask them to tell the people that is the position. That is fine.

I raise the Minister's credibility, if he has any, for this type of action. There is no denying that these promises and commitments were made to the people of Cork. Do promises and commitments mean anything to this Government? Do they mean anything to the Fianna Fáil Party? Does that party deny the commitments were made? What is the justification then for breaking the commitments made by the Minister for Transport in 2003 and by the Taoiseach? What is the justification for breaking promises and commitments? Why were they made in the first place?

The consequences for Cork have been spelled out. There is no justification for this action. Already, a leading aviation expert has suggested, according to an article in today's Irish Examiner, that this €100 million debt will keep the airport grounded and could destroy it. He argues facts and figures to that effect. These are not my figures. These are the figures of an aviation expert.

I wonder why Dublin Airport is quite happy to keep it. It would prefer to have it. That is the irony.

When I look at the position in Cork and at this dreadful Minister who is not prepared to listen to the case made in the Dáil, and when I look at what he and his Fianna Fáil Government are doing to the people of Cork where there a considerable problem with our airport, coupled of course with the ferry not running either, one may wonder why he gets so exercised about this.

I suppose that is my fault as well.

Tourism is important to my area——

Acting Chairman

The Deputy's time has concluded.

——as it is to the Acting Chairman's. These decisions by this Government——

Acting Chairman

Be fair to your colleagues.

——will have an enormous impact on my area of west Cork and on the Acting Chairman's area of south Kerry. Overall, what I condemn is the total breach of faith with the people of Cork. The commitments made are now broken.

Acting Chairman

Be fair to your colleagues.

I can only genuinely hope that the people of Cork will give the answer to this Government at the next election.

It is difficult to be the sixth person to speak because much has already been said about this issue. However, the issue can be crystalised into a simple line — a deal was done and now it has been broken for political convenience and nothing else. The decision to split up Aer Rianta, which Fine Gael supported in 2003, greatly worried Cork Airport at the time. As the Minister from Cork knows, the decision to build a new airport terminal at the site had been made at that stage. The plan was that this would be paid for by the cash cow that was then Dublin Airport. In an effort to bring Cork on board with that policy, the Minister rightly did a deal with Cork Airport that it would not be shouldered with any debt associated with the building of a new terminal. It was stated that the new Dublin Airport Authority would pay for it and, in order to compensate it for this decision, it was given the asset base of the Great Southern Hotels group and Aer Rianta International. It was a simple deal that made sense for everybody.

Since the decision, circumstances have changed. Now that the deal is done and is more or less irreversible, the Dublin Airport Authority has successfully lobbied the Government to change its view and break the deal. There seems to be a tendency to blame the former Minister for Transport for this U-turn. The implication is that replacing a former Minister with a new Minister requires a new policy. That is rubbish. The decision was made by the Government, including the Taoiseach. The Taoiseach stated:

As I said last week, it is the Minister's view that both Cork and Shannon have an excellent future with this debt-free start. He brought this view to Government last week and the Government agreed with him. The new boards at the independent airports in Cork and Shannon will provide dynamic futures for those regions and it was on that basis that the decisions were made.

This is clear. The Taoiseach then went to Cork Airport and personally reassured staff there that the new airport, when built, would be a competitive airport that could commence business without having to carry any debt. More than one or two staff told this to me. They were told it would be debt-free because it would be challenging to compete with the huge bases of Dublin and Shannon airports.

The deal was done and it was fair to all. It was convenient at the time because it got the political deal done. Now circumstances have changed and, on foot of the troubles and the plans to develop Dublin Airport, the Government's plans have changed. It has decided to lumber Cork Airport with a debt it cannot afford to finance. This represents the most blatant broken political promise in the lifetime of the Government.

Cork Airport is very small compared to Dublin Airport and deserves a chance to commence and build a business debt-free. Even if it is debt-free, the challenge will be great. By lumbering it with a debt of €100 million, it will be almost impossible for it to do business. Will the Minister outline how he expects the airport to service the debt?

The airport needs to develop further and it is not yet finished. If it is to be on its own, how will it build up the assets it requires? I fear the debt will hurt the airport. The only solution I see for it is to increase charges but if it does so, the airlines will do less business with it. They have told us this. It is already almost always more expensive to fly from Cork to London than from Dublin to London. I have checked this many times. Cork Airport is already under pressure and this decision will kill it. It will make it almost impossible to do business not only in the city, but also in the whole region. Tourism will suffer if airlines are not flying to the airport.

I do not know what can be done as it seems the decision has already been made. It took two and half years from when the Minister entered office to make any decision on this matter. There was prevarication and shuffling and when a decision was finally made, it was bad. It is what we and business people in Cork city and the wider region feared. The last thing we want is for Cork Airport to suffer. We hope it can get through this but I fear it will not be able to do so. Businesses in Cork have already gone to the wall and this decision will not help. I await the Minister's response.

Some of the comments made by the Opposition represent the type of politics that leaves a very sour taste in my mouth and a sense of despair over the level to which politics has descended among some people, particularly members of the Opposition, in that they would wilfully undermine a substantial national asset, not just an asset of their own region, to put forward a political agenda.

What a sick, sad excuse for a Minister.

God be with the days when there were at least men of stature with some courage in the Fine Gael Party and not men of straw as we have witnessed here tonight.

At least we stick with our party.

We stick with our promises.

The State Airports Act 2004 provides the framework for the establishment of Shannon and Cork Airports as independent airports. As part of the airport restructuring process, the boards of Cork and Shannon Airports are required to prepare business plans for eventual separation. That is their remit, not mine. In the first instance, all three airports' business plans must be co-ordinated by the Dublin Airport Authority for eventual approval by the Ministers for Transport and Finance. Both Ministers must be satisfied that the airports have the capacity to operate on a sound commercial basis before giving final approval to the business plans.

The requirements to be satisfied in advance of separation and in particular the need to ensure the financial sustainability of all three State airports were made clear by my predecessor, the Minister, Deputy Brennan, in this House when the State Airports Bill was debated in 2004. During the debate in the Seanad, it was stated:

. . . Aer Rianta will be able to make the transfers only when it has available distributable reserves equal to the net value of the assets transferred. [This is company law although some want to ignore it.] As the distributable reserves available to Aer Rianta are insufficient for this purpose, a phased approach is provided for in the Bill which will allow for one of the new airport authorities to be vested relatively soon after enactment, namely Shannon Airport, while the second will be vested once sufficient further distributable reserves have been built up within Aer Rianta, namely Cork Airport. A portion of the Cork Airport assets will remain in Aer Rianta and will be subject to a finance lease between Aer Rianta and the Cork Airport Authority.

This is simple, plain English. There is consistency between the policy then and the one enunciated by me now.

I have no difficulty if the Cork Airport Authority wants to wait until the distributable reserves of the Dublin Airport Authority are fully available, and Cork Airport would be handed over debt-free. I have always stated this position and have been utterly consistent. Alternatively, if the board wants to progress the separation immediately — I believe this is the right business decision for Cork Airport — it will have to accept that a portion of the debt will to have to be put in place through some form of financial mechanism to receive full autonomy.

The promise was otherwise.

The distributable reserves needed to comply with all elements of company law, with which the Deputy should be more than familiar——

Why was the promise made by the Government?

——will not be available and are not at present.

The promise was made by the Government.

I am fulfilling that promise utterly. If Cork Airport Authority wants to wait until the distributable reserves of the Dublin Airport Authority are available——

We want the airport to be debt-free. That is what was promised.

The irony is that Dublin Airport is quite happy to keep Cork Airport. The deal is disastrous from the Dublin Airport Authority's point of view. It is giving away one of the most valuable assets in its group while having to sell off and maximise all the others. It would want to keep Cork Airport within its remit because it is a very successful airport and makes a very substantial contribution. This would involve Dublin Airport bearing all the debts.

It is ironic that Dublin Airport tells me I am giving the airport away and that it is happy to keep it, given the astonishing comments made by some in the Opposition about the inability of Cork Airport to be viable. Small regional airports have millions of euro in debts, yet according to some Opposition Deputies, an international airport such as Cork is unable——

Does the Minister deny that a promise was made?

I am fully supportive of Cork Airport's wish for autonomy earlier than originally planned and the need to operate effectively and commercially to serve the needs of tourism, trade and travel in its hinterland. A financial mechanism will have to be found so that Cork Airport can shoulder a reasonable share of the debt burden associated with the assets transferred to it. Any resolution of the debt issue will have to ensure that the debt burden is manageable for Cork and can form a reasonable basis for Cork Airport's autonomy without putting at risk its commercial future. In making the arrangements for the creation of an independent Cork Airport, these and other challenges relevant to each airport will have to be addressed.

A significant opportunity now exists for Cork Airport to achieve the autonomy that the region needs and desires. I believe that autonomy can proceed quickly, provided the Cork Airport board can agree a realistic business plan that includes an appropriate financial mechanism for the transfer of substantial assets to the Cork Airport Authority on vesting. I therefore urge all concerned to seize the opportunity for autonomy by recognising that such a financial mechanism is essential to make the independence of Cork Airport a reality at an early date.

As to the reference to commercial development of certain lands at Cork Airport, I understand expressions of interest have been sought by the DAA concerning the potential use of such land in a joint venture with the private sector. As far as the Government and I are concerned, there is no question of such land being treated differently from other assets being transferred to the Cork Airport Authority on its vesting.

Cork airport has a choice to make. It can either go all out for early separation and, accordingly, make a suitable contribution to the debt attributable to its assets or it can see the restructuring delayed until the funding and reserves position——

Who will fund the €8 million annual payments on the debt?

——within the Dublin Airport Authority can facilitate such a substantial assets transfer.

What a sick, sad saga.

The Dáil adjourned at 11.35 p.m. until 10.30 a.m. on Thursday, 22 February 2007.