Seanad Éireann debate -
Thursday, 13 Nov 2008

Vol. 192 No. 3

Regional Airports.

Senator Paudie Coffey

I thank the Minister of State for hearing the Adjournment matter. This issue refers to regional airports, specifically Waterford regional airport and the southeast region.

Waterford regional airport has increased its passenger numbers each year, it has developed new European destinations and routes and a huge effort has been put into increasing and developing accessibility to the region, and improving connectivity to other cities and regions in Europe. The airport undertook a proposed runway extension and widening plan, which is needed to develop its full potential. Under capital projects announced under Transport 21, €22.3 million was allocated to Waterford, of which €13 million was allocated to the runway extension and widening programme. The airport has a €27 million investment plan that is dependent on the allocation from capital projects in Transport 21.

Waterford regional airport is a key part of regional infrastructure and there have been deficits up to now, due to accessibility issues in the region. In Government policy, balanced regional development and access to the regions is clearly prioritised. Waterford regional airport plays a huge role in improving access to the region and connectivity to other regions. It is in that context I framed my Adjournment motion, because the recent budget announcement said there were six airports and the grant aid was to be capped at €11 million in 2009. It also stated it was restricted to existing contractual commitments and the Department is to review the level and phasing of investment programmes in the long term.

I ask for clarification, and I hope the Minister of State can confirm today, that this budget announcement will not affect the allocation previously identified and given to Waterford Regional Airport under the capital projects of Transport 21. There is huge concern in the city and in the general southeast region that the proposed expansion plans for Waterford regional airport will be adversely affected and that this will have the knock-on effect of scuppering the major investment plans for the airport. This will have an impact across the business, public and other sectors. We are trying to develop the economy of the south-east region and the airport is a pivotal element of that economy. I am interested in hearing the Minister of State's response and thank him for coming to the House to hear the motion.

Minister of State at the Department of Transport (Deputy Noel Ahern)

I thank the Senator for raising this matter. He appears to have a good feel of the situation judging by his figures. The Department provides direct financial support for the six regional airports under two schemes, one relating to operational expenditure and the other to capital investments. In the case of operational expenditure, a new scheme introduced in 2006 provides for an annual subvention in respect of expenditure by the regional airports in providing core airports services. The amount of subvention payable in any one year is based on projected losses by the airports in providing those core services after taking account of any surpluses from commercial activities such as catering, car parking and any other sources of income available to the airports. This is in line with the view underlying the mandatory EU guidelines on state aid for the sector. As a general rule, airports should be self-financing and public money should be made available to them only in particular circumstances and subject to certain conditions.

For 2009, an allocation of €16.926 million has been made to the subhead which funds the operational expenditure scheme and the programme of public service obligation flights between Dublin and the regional airports. On account of limits on public spending, it is clear that for the immediate future, balancing priorities within and between these two programmes will be very challenging. Airports will need to be especially careful to minimise their dependence on Exchequer funds to meet day-to-day spending requirements.

With regard to capital expenditure, in February 2007 the Government approved an €86 million programme of grant aid under the Transport 21 umbrella for specific projects at these airports in the period to the end of 2010, consisting of €39 million at the 90% rate for safety and security improvements and €47 million at the 75% rate for developmental projects All of the regional airports are engaged in the implementation of projects approved under the capital grant scheme.

Grants paid under the scheme so far, amounting to approximately €7.86 million, reflect the fact that for most airports, major projects have been at the preparatory stages and have been subject to delays arising from planning or procurement procedures. They are also a reminder that progress under the scheme, including the requirement for funding in any one year, depends in the first instance on the ability of the airports themselves to implement projects, to raise matching funds and then submit valid claims to the Department.

The provision in the Department's Vote to fund the capital expenditure grant scheme in 2009 is €11 million. On account of the current difficulties with the public finances, it has been decided that until the end of 2009, expenditure under the scheme should be focused on projects and project elements where the airports have already entered into contractual commitments. This means that, inevitably, full implementation of the approved capital programme will take longer than originally anticipated. The Department aims to establish priorities for grant aid from the funds available in 2009, having regard to these contractual commitments and a realistic assessment of the drawdown requirements for safety and security related projects likely to arise during the year.

Waterford Airport, with potential grants amounting to €22.33 million, is a major beneficiary under the capital grant scheme and has already received approximately €2.77 million to date. Projects earmarked for the airport include €9.2 million for safety related projects and €13.1 million for developmental projects, including the proposed runway extension costing €4.84 million. There are no existing contractual commitments in respect of this project. It is inevitable, therefore, in the current financial climate that its phasing and that of other projects at the airport that are likewise uncommitted must be carefully considered, especially in view of the large sums involved.

At a recent meeting with Waterford Airport the Minister received a detailed presentation on priority items the airport wants to move forward in 2009, which are mainly safety or security related. These will be considered by the Department in the context of its review of priorities for funding under the scheme next year, but it is not possible to give any commitments at this stage on the likely or eventual decisions.

Senator Paudie Coffey

I thank the Minister of State for his frank response to my query. My fears have more or less been confirmed. I agree that safety and security must be a priority in any airport and this should remain the case. I acknowledge there are no contractual commitments, but the airport has made serious progress on its planning and proposals to develop its runway and to extend and widen it to allow the full potential of the airport, and by extension the region, to develop.

We hear all the time about balanced regional development, accessibility and infrastructure. I am speaking about one of the key infrastructural deficits in the south-east region and I am saddened to hear there is a serious rowing back by the Government and no clear commitment of funding for the extension and widening of the runway. The tour of Transport 21 and the announcements of what it would do throughout the country brought great hope to the regions, but for Waterford and the south-east region that hope will not be carried through by Government action and resources for the airport. This makes a sad day for Waterford and the south-east region. I urge the Minister of State to ensure this is reconsidered at the earliest opportunity when the budget allows for it.

Deputy Noel Ahern

I hear what the Senator says, but I hope the airport board does not take such a negative view of the situation. There is a delay in what is likely to happen, but there is no rowing back or cancellation, although the Senator did not use that word.

Senator Paudie Coffey

I did not. I said "clear commitment".

Deputy Noel Ahern

There is a delay in the process with regard to projects that were to get the go ahead next year. However, I hope that while there may be a delay, the airport board in Waterford will still progress its thinking and plans. I am trying to offer encouragement. I have heard what the Senator said about the potential of the airport and while there may be a delay, I hope people will remain optimistic and positive about their plans. It is to be hoped that, when the financial situation improves, their plans will be ready to get the go-ahead. I remain optimistic and am not as despondent as the Senator appears to be given the message he put across.

Senator Paudie Coffey

I wish to make a clarification with regard to the allegation of negativity. I took great care to have a very positive contribution on Waterford and I think the Minister of State has acknowledged that. Anybody who knows me and the representations I make on behalf of Waterford knows I always speak positively in any forum or debate. I acknowledge the detailed response of the Minister of State and ask that he ensures Waterford and its regional airport are kept as a high priority in the Department.