Dáil Éireann debate -
Thursday, 11 Dec 2008

Vol. 670 No. 3

Adjournment Debate.

State Airports.

Deputy Pat Breen

I thank the Ceann Comhairle for facilitating me with this debate. They say that breaking up is never easy but since the proposed separation of our three airports at Shannon, Cork and Dublin was first mooted in 2003 and, after five years of protracted negotiations with much toing and froing, according to recent media reports it appears that this break-up is to be grounded by the Minister for Transport and his officials before take-off. It is important that he clarify proposals for the future of the three airports.

The State Airports Bill 2004 set out how this proposed separation was to proceed. Some €217,506 of taxpayers' money was spent by the previous Minister for Transport, Deputy Martin Cullen, to pay consultants to give advice on how this break-up was to proceed. Yet, armed with all this advice the entire process has been dogged with indecision.

Each of the three airports had to produce a business plan. The business planning procedure was complicated and drawn out and, in spite of numerous requests by me to the various Ministers, the Government refused to commission an independent assessment on the robustness of the plans. This was essential because when the silverware was to be given to Cork and Shannon airports their main competitor, Dublin Airport, was effectively appointed judge and jury. It was a recipe for disaster. We have even witnessed high profile spats and casualties between the Minister, the Department and Cork Airport before a deal was brokered to saddle Cork with a debt of €113 million.

In the case of Shannon Airport, in order to finalise the business plan it had to implement a significant restructuring programme in which it is estimated to have achieved around €10 million in savings with 200 workers agreeing to take voluntary redundancy. However, Shannon Airport has been hit with a series of body blows. First, in January 2008 the last Aer Lingus flight took off for London Heathrow and in March the Open Skies agreement came into effect. Both events have affected the airport's traffic figures. A total of 3.6 million passengers passed through the airport in 2007 but, up to the end of September 2008, overall traffic had fallen by 13% and a 14% decrease is anticipated by the end of the year. Transatlantic traffic is down 24% and, in spite of all the comments about the mid-west "exaggerating" the Heathrow Airport crisis, traffic to London is down 16%.

In budget 2009, the airport was hit with another body blow. The Minister for Finance introduced a €10 air travel tax and, while I acknowledge he levelled the playing field for the airport in the Finance Bill, it has prompted both Ryanair and Aer Lingus to warn of the consequences. Aer Lingus claims it will cost the airline €30 million next year while Michael O'Leary said, "Traffic at Shannon next year is under huge threat". Yesterday he announced the ending of the Ryanair service between Shannon Airport and Fuerteventura from 31 January 2009. Michael O'Leary has also questioned the viability of Shannon and Cork Airports going forward if the break-up goes ahead while, at the same time, allowing Dublin Airport to retain the bulk of assets from the former group.

The distribution of the assets from the DAA to Shannon Airport was, and will continue to be, a key stumbling block. The decision to divest assets from the DAA without first addressing Shannon Airport's key financial and operational requirements going forward was foolhardy and unwise. It was bordering on reckless trading to proceed with this break-up without making sure that Shannon Airport was put on a sound footing and secured a fair deal.

Aer Rianta International, the flagship company, was born in Shannon and retaining the ownership of ARI in Shannon was vital for the airport. The Department also had doubts about the break-up and it was even mooted at one stage that assets from Shannon Development would have to be transferred to keep the airport in the black. Now everything has changed and we are in a new environment of unprecedented economic crisis. The aviation industry is no different. Various airlines throughout the world are sitting down to discuss mergers and we are the middle of a debate on the pros and cons of a Ryanair takeover of Aer Lingus. In this changed economic environment, it is sensible to re-examine the entire separation of our three airports. Recently, I met the Minister for Transport at Shannon Airport when he announced agreement had been reached between Ireland and the US to make full pre-clearance facilities available at the airport. I have supported this project from the beginning and it has huge potential. However, it will require investment and commitment.

If the Minister is putting the break-up process on the back boiler, it is very important that the DAA divests strong powers of local autonomy and financial resources to the management and staff of Shannon Airport in order that they can get on with the job that they are doing well in difficult circumstances. If he is having a rethink, I would like the DAA's name changed to reflect this decision. The authority should row in behind both Shannon and Cork Airports to help them weather the storm in these difficult times. This move would help to foster greater co-operation and goodwill between all three airports. I would like the Minister to outline his proposals because there is a great deal of uncertainty. Clarity is needed and if he is having a rethink, I hope he will take on board the issues I have raised in this debate and in recent parliamentary questions.

Minister of State at the Department of Enterprise, Trade and Employment (Deputy Seán Haughey)

I am replying to this matter on behalf of the Minister for Transport.

The State Airports Act 2004 provides the framework for the establishment of Shannon and Cork as independent airports. The Act provides, inter alia, that on dates to be confirmed, the Cork and Shannon Airport authorities may have the relevant airport assets vested in them and assume full responsibility for the management, development and operation of the airports, respectively. In the interim, the DAA board has transferred significant day to day operational responsibility, under delegated authority, to the boards of the Cork and Shannon Airport authorities. To progress restructuring, the boards are required to prepare business plans for eventual separation.

All three airport business plans have to be co-ordinated by the DAA for eventual approval by the Ministers for Transport and Finance. Among the requirements to be satisfied in advance of separation is the need to ensure the financial sustainability of all three State airports. The Minister has received business plans from all three airports and has been in consultation with the three airport authorities concerning the approach to the separation of Cork and Shannon Airports, having regard to the current economic climate and trends in the aviation market generally. He hopes to announce the outcome of those consultations shortly.

Institutes of Technology.

Deputy Brian O’Shea

Waterford needs a university in order that the city, the county and the region can have adequate numbers of graduates as Ireland moves more and more in the direction of a knowledge economy. In the absence of a university, Waterford and the south east have suffered from a significant brain drain with an estimated 7,000 people leaving to study at university annually. School leavers who want to enjoy the benefits of a university education have no choice but to leave the region and the experience in Waterford is that, once people leave, it is difficult to get them back. Unless sufficient highly qualified people graduate within the region and become available for prospective employers, Waterford and the south east will be unable to compete with other regions in attracting investment from major international companies and the local economy will suffer greatly in the long term.

Last week I tabled a parliamentary question to the Minister for Education and Science asking whether a decision would be reached on the application by Waterford Institute of Technology, WIT, to become a university by the end of the year. For the third time this Dáil term, he replied that the application would be finalised in the near future. This is not only an education matter because it is absolutely vital to job creation in the region. That is simply not good enough. The fact that this matter continues to be long fingered underlines the neglect of the development of Waterford and the south east by the Government parties and the failure to adopt a meaningful strategy for economic and industrial development. The lack of a university seriously handicaps the region in generating jobs in the sectors where sustainable employment can be created such as the knowledge economy, pharmaceuticals, medical technologies and international financial services. These sectors need positive Government intervention urgently.

Last year, universities in Dublin, Cork, Galway, Maynooth and Limerick received a total of €761 million in recurrent funding while Waterford and the south east received nothing. WIT received less than €49 million in recurrent funding last year out of a total of almost €525 million for the entire institute of technology sector. All regional cities, with the exception of Waterford, also benefited from having a local institute of technology but the total third level grant allocation in these cities is in an entirely different league from Waterford. For example, in the west, grants to NUI Galway and the Galway-Mayo Institute of Technology totalled almost €147 million, which is approximately €98 million more than Waterford received. On a purely financial basis, this puts us at a serious disadvantage before we begin to account for all the spin-off benefits a university would provide.

We look forward to the day when Waterford and the south east will at least be on a par with Galway in spending on third level education. Comparison with Limerick is also instructive. The University of Limerick secured grants of almost €97 million in 2007 while Limerick Institute of Technology received €30 million, a total of €127 million. This means the local economy in Limerick benefited directly from State funding of third level education by almost €79 million more than Waterford last year. This represents a sizeable transfer of funds into the Limerick economy and, in financial terms alone, an annual injection of this magnitude would make a major difference to struggling small businesses in Waterford.

While WIT is acknowledged as the sole and premier provider of third level education in the city, it is nowhere near the top of the institute of technology league in recurrent funding. For example, Dublin Institute of Technology received almost €134 million and Cork Institute of Technology received €62 million. This is not a case of Waterford and the south east begrudging other cities their third level institutions but it is a call to give us the opportunity to prove that with our fair share of State funding for third level education, we can transform Waterford city and county and the south east region. I demand that a positive decision on the application by Waterford Institute of Technology is made by the end of this year.

Deputy Seán Haughey

I thank Deputy O'Shea for raising this matter.

The position is that applications have been received from three institutes of technology, Waterford IT, Dublin IT and Cork IT for designation as universities. The issue of university designation does not affect only the institutions and the regions from which applications have been received, it will also have a major impact on the future structure of the higher education system throughout the country. The Government wants to build on our strengths and to provide an environment where all our higher education institutions can develop in a way that best serves the country as a whole and the regions where they are based. The institute of technology sector has a specific tradition and expertise in providing technical education and training, geared at the needs of the workforce. In the challenging economic environment we face the sector has a particular role to play in upskilling or reskilling those who may either be a long time out of the formal education system, or who do not have qualifications in areas where job opportunities may develop.

Government policy on higher education is based on a system whereby universities and institutes of technology have distinctive missions from each other, provide different levels and types of academic programmes, fulfil different roles in the community and have separate academic and governance structures. It should also be borne in mind that, since the applications for university status were received, there have been significant changes in the legislative and regulatory framework governing the institute of technology sector, which will in any event deal with many of the legislative constraints on growth and development identified by Waterford Institute of Technology in its application.

The Institutes of Technology Act, which only came into effect in February 2007, provides for the creation of a unified management structure framework for higher education in Ireland by bringing the institute of technology sector under the remit of the Higher Education Authority. The legislation also extends significant new managerial and academic autonomy to the institutes, aimed at facilitating further development of their roles. For example, institutes will have the right and responsibility to preserve and promote the traditional principles of academic freedom in the conduct of their internal and external affairs.

The budgets of individual institutes will now be set by the HEA rather than by the Department and specific approval to run individual courses or programmes will no longer be required. The institutes will also be able to borrow funds under a framework agreed with the HEA and the Departments of Finance and Education and Science. In addition, it has been accepted that income generated by third level institutions from external sources should not be subject to off-setting in the allocation of Exchequer funding.

Waterford Institute of Technology is an important institution making a great contribution to education generally and to the economic and social well-being of the south-east region. It has an excellent track record of industry collaboration particularly in areas of applied research and curriculum design. The Government wants to see Waterford Institute of Technology further develop its strengths in these areas in line with the objectives of the Government's strategy for science, technology and innovation. In this regard one of the key development and investment priorities for the Waterford gateway in the national development plan is the investment in the R&D capacity of Waterford Institute of Technology to underline the importance of education to Waterford as a centre of excellence.

The Minister has met with each of the three institutes that have submitted applications for designation and officials from my Department have engaged extensively with Waterford Institute of Technology in recent months on its application. It is important that these consultations were arranged before any decision was taken on the matter. Waterford Institute of Technology's application, together with the other applications on hand, is being carefully assessed and it is expected that consideration of them will be finalised in the near future. I thank the Deputy for affording me the opportunity to respond to the House on this matter.

School Accommodation.

Deputy Joe Costello

The matter I am discussing also involves a school and I hope I have better news than my colleague, Deputy O'Shea, who received a slightly unsatisfactory reply to his matter. No doubt he will be successful in the long run.

Almost 14 years ago, Gaelscoil Bharra, a primary school, was established in prefabs and left there. It applied for recognition and permanent accommodation but heard nothing. Two generations of school children have passed through these prefabs. We know what primary school prefabs are like. They are wet, cold, dank and musty. The toilets overflow and sewage comes out in the yard. They are miserable. They are hot in the summer and cold in the winter. This is how we cherish the children of the Cabra area who are endeavouring to get their education through the official language of the country. This is not good enough.

It seemed that eventual success would come prior to the election in 2002 when the parents and board of management decided to conduct a major rally in Parnell Square. The then Taoiseach persuaded them that such public action would not be necessary and delivered what seemed to be a solemn commitment to them that the school would be constructed during the next term of office if his Government was re-elected. Nothing happened during the subsequent five years and nothing has happened in the 18 months since the most recent election.

The school remains in the same appalling condition and there is no sign of light on the horizon. The excuse made by the Department was that the existing site was too small and that it would seek to identify a site elsewhere. It employed the OPW to look for a site. This went on for years. Now it has agreed at last to go back to the drawing board, which had been suggested years ago, to examine the existing site and get an extension on it from the GAA club which occupies the same ground, all of which is leased from the local authority.

Under a great deal of pressure, the Department has decided to begin to consult with the GAA and the local authority. However, it is not consulting with them together in a collective fashion. The last I heard from the Department was that it had made proposals to the local authority on the matter. What are these proposals? How binding and significant are they? Will the Department negotiate a lease with the local authority for the site and then confirm that it will build a school?

We need a round-table meeting whereby the local authority, the Department of Education and Science, the GAA club, the board of management, the parents' association and the staff can all sit down and find out what is happening, when it will happen and what commitment we have from the Department of Education and Science to proceed with the construction of the school. I hope the Minister of State has good news for the people of Cabra.

Deputy Seán Haughey

I thank the Deputy for raising this matter, as it provides me with an opportunity to outline to the House the Government's strategy for capital investment in education projects and also the current position on future plans for Gaelscoil Bharra, Cabra. The Minister for Education and Science, Deputy Batt O'Keeffe, wishes to clarify that modernising facilities in our existing building stock, as well as the need to respond to emerging needs in areas of rapid population growth, represent a significant challenge. He intends this challenge to be one of his priorities.

The Government has dramatically increased investment in the schools building programme to almost €600 million this year. During the lifetime of the national development plan almost €4.5 billion will be invested in schools. This is an unprecedented level of capital investment which reflects the commitment of the Government to continue its programme of sustained investment in primary and post-primary schools. It will underpin a particular emphasis on the delivery of additional school places in rapidly developing areas while continuing to develop the Government's commitment to delivering improvements in the quality of existing primary and post-primary accommodation. It will also enable the purchase of sites to facilitate the smooth delivery of the schools building programme, again with the focus on site requirements in rapidly developing areas.

Turning to the specific matter in hand, the Office of Public Works, OPW, which acts on behalf of the Department in site acquisitions generally was requested to source a greenfield site for this gaelscoil. However, on foot of advertising, no proposals were received for a greenfield site in the Cabra area. Further to this, the OPW was requested by the Department to look into building a permanent school on the existing temporary site. In order to pursue this further, meetings have taken place between the Department and Dublin City Council regarding the potential availability of this site. The Department has written to the council with a proposal suggesting a lease arrangement be put in place. A response is awaited. When the Department has received that response, it will be in a position to consider the next steps. It will continue to liaise with stakeholders.

The further progression of the acquisition of the site will be considered in the context of the capital budget available to the Department for school buildings generally. The Minister is not in a position to say at this stage when the acquisition will be concluded.

The Dáil adjourned at 8.15 p.m. until 2.30 p.m. on Tuesday, 16 December 2008.