Adjournment Matters

Flood Prevention Measures

Senator Denis O'Donovan

I have raised this issue of the ongoing flood problem affecting Skibbereen, in particular, before. The point I wish to raise is the ongoing delay in implementing the flood relief strategy and in putting in place a proper flood relief system.

The public consultation day was held in January 2012, approximately four months after the original scheduled day. The stage 2 public exhibition day is scheduled for 11 April 2013 but it has already been rescheduled from October, when it was originally supposed to take place. In the past two years these consultation days and exhibition days have been pushed out by between nine and 12 months, which is causing much concern.

In the past six weeks, we have had four flood weather warnings from Met Éireann and Cork County Council. In addition, there were three floods on the Mill Road on 18-19 and 21-22 December and on 18 January. On most of these occasions, the water was within millimetres of flooding private houses and businesses in the Skibbereen area. Needless to say that on some of these occasions the road to the local hospital was blocked off because of the flood warnings.

I express my sincere thanks to the voluntary local flood committee. It sometimes comes in for much criticism because it is not delivering. I have met some of the members of the committee and during the dates on which there were flood warnings, they were up until 3 a.m., 4 a.m. and 5 a.m. watching the water rise and waiting until it receded before they went to bed.

In the previous debate on local government reform, the Minister for Environment, Heritage and Local Government, Deputy Hogan, spoke about the voluntary sector which should be given credit. This is a group of amazing people who have done trojan work. They are very reasonable people and are involved in the national flood forum, in liaising with local engineers on the council and in meeting Government representatives. In the past, the former Minister of State, Martin Mansergh, visited as did the Minister of State at the Department of Finance, Deputy Brian Hayes, who is due to visit again in a few months time.

I am deeply concerned that this town has suffered hugely as a result of flooding for the past 40 years. I know much progress has been made in other towns such as Fermoy, Mallow, Clonmel and Kilkenny, and good luck to them. However, I am making the case that the delay in regard to Skibbereen must be addressed. I understand there are funds to address it. Whether it is a two or a three year job to implement what is proposed for the Skibbereen flood relief scheme, the community, the elderly people living in the estates, the ratepayers and so on should not have to wait and suffer further consequences as a result of inaction and pushing the evil day further out. These delays are inexcusable and I trust the Minister of State, Deputy Perry, will have very positive news for me.

Minister of State at the Department of Jobs, Enterprise and Innovation (Deputy John Perry)

I thank the Senator for raising this important issue which was debated before in the Seanad. A flood risk assessment and management study for the town of Skibbereen is being advanced by Cork County Council in partnership with the Office of Public Works, OPW, which is providing the funding. Consultants were appointed in 2011 and the project is at feasibility study and environmental assessment stage. There have been two information days where an initial preferred scheme was presented to the public, with the main proposals, including new walls and embankments, some localised channel widening, localised regrading of the channel and some improvements to the local drainage system.

While it was intended to place the preferred scheme on formal public exhibition towards the end of 2012, some delay was incurred due to the need to assess further information from the existing river gauges at Ballyhilty and the need to undertake further surveys. The delay is regrettable but it is vital that all available information is fully and thoroughly assessed before formalisation of the preferred scheme in order that the most effective and appropriate scheme can be put forward for consideration by the people of Skibbereen and other stakeholders.

A date for the exhibition launch has now been set and I am pleased to say the process will commence on 11 April 2013. The proposals will be on display for one month with members of the design team attending on specified days to deal with queries from the public. Observations will be accepted for a further month, all of which will be assessed and responded to before further decisions are made on the progression of the scheme.

The OPW and Cork County Council have been in discussions in regard to ways in which some of the delay can be made up. It is now intended to bring forward the timing of the site investigations required for the progression of the detailed design of the scheme. This will allow the detailed design to commence as soon as the public exhibition phase is completed, subject to the preferred scheme being generally accepted by the public in Skibbereen.

As the Senator is aware from previous discussions, Cork County Council applied for separate funding in 2010 and 2011 for a study to develop an early flood warning system. However, as I have indicated before, it was considered best that the full feasibility study consider the efficiency of a flood warning system for the town rather than undertake another study. It is my hope that the scheme to be placed before the public in April will be received positively and that, subject to no significant delays occurring with the programme for the detailed design stage and procurement of a civil works contractor, it may be possible to commence construction works for the scheme in mid-2014. I am pleased to confirm that the OPW has made provision for the cost of implementing a scheme in Skibbereen in its financial profiles in the years 2014-16.

Senator Denis O'Donovan

I thank the Minister of State for his very comprehensive response which gives much cause for optimism. He can take a message back, in particular to the Minister of State, Deputy Brian Hayes, for whom I have great respect, that should there be further delays, I will raise this again. I appreciate the Minister of State is not the line Minister but his response has been helpful.

Deputy John Perry

I am delighted to note a definitive date has been set for April. The funding is in place for 2014 and that is important. I acknowledge the Senator's involvement in this important issue and compliment the voluntary committee in Skibbereen on the work it is doing. It is the Minister of State's intention, and that of the OPW, that there should be a public display so that there will be no major obstacle to the plan of action. I hope it will proceed as quickly as possible.

Fuel Rebate Scheme

Senator Martin Conway

I welcome the Minister of State, Deputy Perry, and wish him a very successful 2013. If 2012 is anything to go by, he will certainly make a significant difference in terms of creating jobs, which is a passion close to his heart. This matter relates to job retention as well as job creation. The announcement in the last budget that a rebate structure would be put in place for the road hauliers was great news because fuel costs for them were significant. There were challenges with the North and internationally in terms of the cost of fuel and the Government responded appropriately with a scheme. There was a significant amount of representation by the Irish Road Haulage Association dating back 14 months which led to this very important development.

That said, I would like to see it rolled out to the bus and coach industry which is a significant player in terms of economic development, tourism development and ensuring The Gathering is a success and people get from A to B safely, comfortably and easily. There is no difference between transporting people and goods.

One would suggest that they go hand in hand. Therefore, it makes eminent sense that the scheme that is applicable to the road hauliers, and appropriately and correctly so, should also be mirrored among the coach and bus hire operators. It is a significant industry because thousands of jobs rely on the sector directly and indirectly. These operators have found themselves significantly and economically challenged when tendering for State jobs. For example, school bus runs have been cut to the bone and service providers barely make a living. Recently I spoke to a bus operator who would have earned €40 per week if he had won a contract. The sector poses significant challenges but it is an open and shut case. The finance Bill gives us an opportunity to grant equity to the haulage and bus hire industry. I hope that the Minister of State will have good news in this regard.

Deputy John Perry

I thank the Senator for raising the important issue of the role of business and the survival of small companies. I am pleased to have the opportunity to speak on behalf of the Minister for Finance on the motion to introduce an excise rebate on diesel for passenger transport companies in the Finance Bill 2013.

My colleague, the Minister for Finance, announced in his budget address the introduction of a rebate on diesel for tax-compliant hauliers with effect from 1 July 2013. It is intended as a support to small businesses in all sectors of the economy as virtually all businesses rely on cost-effective transport for their inputs and outputs. Such transport is provided by hauliers, the majority of whom are themselves small businesses. The rebate was introduced to assist the competitiveness of this key industry.

The Minister, in providing for this support, did so in recognition of the high cost of fuel and the effect this was having on transport costs for small business. Ireland, as with other countries, has experienced an increase in the cost of petrol and auto-diesel. The increase in fuel prices is an international phenomenon. There seems to be a belief that the increased fuel prices in recent years is a result of high levels of taxation, but this is not the case. Fuel prices are driven by a number of factors including the price of oil on international markets, exchange rates, production costs and refining costs. The rise in oil prices over recent periods reflected additional factors such as the geopolitical uncertainty in northern Africa and the Middle East with potential supply disruptions.

The excise rates, including the carbon charge, in Ireland on motor fuels are 58.7 cent on a litre of petrol and 47.9 cent on a litre of auto-diesel. Ireland's excise rates are the ninth and fourth highest in the EU27 for petrol and auto-diesel, respectively. However, our rates remain lower than many of our main trading partners. Members will be aware that the Minister did not increase excise rates on fuels in the recent budget. The Minister has received a number of calls for a reduction in excise duty and there is a general belief that the increase in fuel prices was in some way a bonanza for the Exchequer. This is not the case. It should also be noted that the Exchequer yield from excise, as excise is set at a nominal amount, does not increase as the price of fuels increase. On the other hand, the yield from VAT per litre of fuel, as VAT is set as a percentage of the price, increases as the price of fuels increase. It is important to note that businesses that are registered for VAT are entitled to reclaim VAT incurred on their business inputs, including VAT incurred on auto-diesel. Accordingly, there is little or no gain to the Exchequer because it is a VAT reclaim and a lot of the businesses are VAT registered.

Members will be aware that in the past the Energy Tax Directive 2003 incorporated a special derogation for an excise duty relief on fuel used for local public passenger transport vehicles in Ireland. The derogation expired on 31 December 2006. The energy tax directive allowed for the relief derogation to be extended with the approval of the Commission. At the time, together with several other member states, including France, Belgium, the United Kingdom, Greece, Sweden, Malta, Italy, Portugal, Denmark and Finland, Ireland applied to have the derogations extended. However, all of the requests were refused by the Commission. The Irish derogations were officially turned down in March 2007. Consequently, the Finance Act 2008 provided the legislative changes to withdraw the relief in respect of fuel used for public passenger transport vehicles - the point raised by Senator Conway - with effect from 1 November 2008 and the appropriate full excise rates applied from that date. In the circumstances the reintroduction of such an excise relief does not arise.

The Minister acknowledges that the energy tax directive permits the application of a lower rate of mineral oil tax to diesel used for certain commercial purposes, provided that the minimum rate of taxation specified by the directive for that fuel is respected. Commercial use includes the carriage of passengers by road in vehicles with eight seats or more and to road haulage by larger vehicles with a maximum permissible gross laden weight of not less than 7.5 tonnes. The current EU minimum rate is 33 cent per litre. The maximum difference that may be allowed is the difference between the current Irish rate of 47.9 cent per litre and the EU minimum providing for a rebate of up to approximately 15 cent per litre.

The cost of a relief for all eligible commercial vehicles at the maximum permissible rate would be in the region of €200 million in a full year. In addition, the administrative difficulties for Revenue would be significant. A register of all users would need to be established including the details of the companies and individuals involved, identifying the type of vehicle that would qualify for relief, establishing that the fuel was used in the vehicles concerned, and the diversion of resources from other areas of tax control and compliance that this would involve. In addition, the rebate cannot be restricted to indigenous industry, foreign based hauliers and coach operators would also have to be included. This would present particular difficulties as they could not be subject to the same audit, tax clearance controls as Irish based operators. Any such scheme of repayment would potentially be open to serious abuse.

For all of these reasons the Minister for Finance decided that the commercial diesel rebate, announced in his Budget Statement, would be confined to licensed, tax-compliant road hauliers. It is worth noting that one of key arguments for the introduction of a rebate for the haulage industry is the fact that a large quantity of fuel purchased by the industry is purchased abroad thus generating no tax revenue for the State. A rebate should encourage hauliers to start purchasing their fuel in Ireland thus offsetting some of the costs involved. Such an arrangement does not exist, for the most part, for the coach industry or for other unlicensed hauliers.

With regard to fuel prices, given the current pressure on the public finances, there are no further plans for temporary taxation adjustments for specific sectors or businesses in general, as to do so could lead to significant costs to the Exchequer. The Minister has received a significant number of submissions and representations on behalf of the passenger transport sector and will consider the matter in the context of the Finance Bill.

Senator Martin Conway

I thank the Minister of State for delivering the reply, the vast majority of which outlined the reasons a fuel rebate could not be applied, but at the end he said the matter would be considered "in the context of the Finance Bill."

Acting Chairman (Senator Marie Moloney)

I am sure that the Senator knows that he can ask just one supplementary question.

Senator Martin Conway

Yes. There is a clear divergence in his statement, but I thank him for his reply. The issue shall not go away. Perhaps he will inform the Minister that there will be a significant campaign. One can self-declare for a register but there are ways around this.

Deputy John Perry

I appreciate the Senator's concern for the road haulage companies involved. Obviously the Minister supplied me with a detailed submission, but I will pass on the Senator's concerns. I have no doubt that the Minister will refer to it in the Finance Bill in whatever way that he can.

Road Safety Strategy

Senator Lorraine Higgins

I welcome the Minister of State and thank him for taking this Adjournment matter on the road safety measures required throughout the country.

The context in which I raise this matter is that I acquired the support and signatures of 300 people living in the Kilreekill area of County Galway who are very concerned about the condition of the Kilreekill to Mullagh road which, regrettably, is well known locally as a notorious accident black spot. This stretch of road represents a major hazard to all local road users and has been the scene of a number of fatal collisions in recent years. One of the main issues is that there is no white line on a portion of the road. This presents a significant safety risk as road users are unable to identify the central demarcation line.

The people of Kilreekill and surrounding areas should not have to put their lives at risk on a daily basis by having to drive on a clearly dangerous and substandard stretch of road. The 300 signatures which I will furnish to the Minister's office are further evidence of the strong depth of feeling locally concerning the issue. The Minister's intervention is urgently required to ensure this safety issue is addressed and that there is none or at least a much reduced number of fatal road collisions on this road and others throughout the country. It would be remiss of me not to put this issue to the Minister and ask him to set out a policy programme through the National Roads Authority to ensure the adequate lining of all secondary and regional routes in the interests of road safety.

Minister for Transport, Tourism and Sport (Deputy Leo Varadkar)

I thank the Senator for raising this matter and giving me the opportunity to address it in the House. As Minister for Transport, Tourism and Sport, I have responsibility for overall policy and funding in regard to the national roads programme. The construction, improvement and maintenance of individual national roads are statutory matters for the National Roads Authority, NRA, under the Roads Acts 1993 to 2007, in conjunction with the local authorities concerned. The NRA arranges for the lining of national primary and secondary routes by contractors under a multi-annual programme.

The improvement and maintenance of regional and local roads are the statutory responsibility of each local authority in accordance with the provisions of section 13 of the Roads Act 1993. Works on those roads are funded from local authorities' own resources supplemented by State road grants paid by my Department. The initial selection and prioritisation of works to be funded are also matters for the local authority.

A total of €346.5 million is available this year under the regional and local roads investment programme. However, it is a matter for local authorities to decide on their road programmes and how best to utilise the resources available to them.

The signage and delineation on Irish roads are provided for in accordance with the Department's traffic signs manual, the current standard for signing and road marking. The most recent edition of the manual was issued in January 2011. The manual was produced by my Department, together with the technical assistance of the NRA, the County and City Managers Association and Roughan & O'Donovan - AECOM Consulting Engineers and supersedes the previously published 1996 traffic signs manual.

There are various factors to be taken into account, including road width and sight distance, when deciding on the appropriate road markings to be used on any given road. The traffic signs manual provides the guidelines for all local authorities regarding road markings which may be used on roads in Ireland, including their layout and dimensions, the circumstances in which markings may be used and guidance on positioning them. This ensures consistency across the country.

The traffic signs manual also provides comprehensive advice on all aspects of signing and lining and emphasises the need for maintenance and the renewal of signs and road markings. Using the guidance detailed in the manual, it is a matter for local authorities to provide adequate road marking and signage where it is required.

I am satisfied that the guidelines outlined in the traffic signs manual are sufficient to ensure consistency on road markings across the country. I have no plans for a policy programme on the lining of secondary and regional routes.

As regards the illumination of bus stops, the NRA has regard to the need for bus stops on national routes where higher speeds apply to be located appropriately, taking safety factors into account. Where possible, bus stops are located where they can benefit from existing high quality street lighting. In keeping with this approach, Bus Éireann's policy on the illumination of its bus shelters is that, where possible, lighting should be provided at shelters on a 24 hour basis or from dusk to dawn. While it does not have a policy of illumination of bus poles, in the vast majority of cases these bus poles are located in urban settings where on-street illumination is provided. This is also the case where bus shelters are not illuminated.

I do not know the road in detail about which the Senator spoke, but I will ensure her correspondence is made available. I will take a personal interest in the matter and ask the local authority or the NRA, as appropriate, to respond directly on the issues raised.

Senator Lorraine Higgins

While I accept that local authorities and various State agencies have responsibility for road safety under statute, I acknowledge that the Minister is being incredibly helpful. I raise a very serious matter to do with road safety and it is clear that his intervention is needed, as quite a number of people use this road. As I stated, over 300 people have signed a petition to have the road marked and brought up to a good condition.

State Airports

Senator Marc MacSharry

I thank the Minister for taking the time to come into the House to deal with this issue. My Adjournment matter relates to Shannon Airport and the measures announced by the Government in the budget, as well as indications given throughout last year. My concern is that the State is unfairly promoting a policy to ensure the survival and growth of one airport potentially at the direct expense of another. I want to make it clear, as I have got some stick from a particular county yesterday and today, that I am for Shannon Airport, pro the south-west region and would not seek to scupper investment to help that region and Shannon Airport to perform to its potential. Ireland requires the airport to perform to its potential.

The Minister may or may not be aware that I have lodged a complaint with the European Commission Directorate General for Competition raising concerns about the measures announced some time ago indicating that they are anti-competitive on the basis that I understand Shannon Airport's business plan will specifically target 250,000 passengers at Ireland West Airport Knock and that, effectively, it now has the benefit of the apparatus of State agencies in seeking to do this following the announcement of what I estimate to be a €100 million debt write-off, the stripping of certain assets to be sold to IDA Ireland, the proceeds of which will go back to Shannon Airport, among other issues. I estimate that up to €300 million is the value of the investment to Ireland West Airport Knock and that region. This equips Shannon Airport unfairly and undermines the potential of Ireland West Airport Knock to continue to grow its business.

The Minister has said that in some ways he admires the performance of Ireland West Airport Knock in terms of what it has achieved in growing its business by 350% - to use his words - in the past ten years at a time when Shannon Airport had lost 63% of its business. In that period €160 million was provided for Shannon Airport, while just €15 million was provided for Ireland West Airport Knock. The Minister stated:

... if nothing was done for Shannon the airport stood in danger of being passed out by Knock airport in passenger numbers, despite a current gap of over 900,000 passengers.

I think if the trends continue as they are it will happen because Shannon’s numbers are already down 20 per cent this year and Knock is still growing. It is only a matter of time without a change in policy.

We have changed the policy through the actions of the Dublin Airport Authority, DAA, as announced by the Government, and other measures, as indicated by the Minister for Finance, Deputy Michael Noonan, in his Budget Statement to enhance the potential of Shannon Airport to grow and specifically target passenger numbers at Ireland West Airport Knock.

I am not against Shannon Airport, but the Booz report warned that supporting Shannon and Cork airports in isolation would jeopardise the viability of other airports. That is what will happen. We must take a strategic approach to our airports, acknowledge that they can all be economic drivers for their respective regions and maximise the potential of the regions in contributing to the national effort and, ultimately, national recovery.

I ask the Minister to acknowledge the strategic importance of Ireland West Airport Knock to the north-west region and its potential to contribute to the national effort and future national recovery. Second, I ask him to make available proportionate supports to Ireland West Airport Knock to help it to perform to its potential. I am not talking about "capex" and "opex" but rather take a strategic view. I am aware that members of the board and management have met the Minister and other Government representatives some 50 times since he took office to highlight the contribution that can be made in the context of some 900 jobs being created and in terms of the airport being an economic driver for that region.

Rather than Shannon Airport being enhanced in its role to try to rob Peter to pay Paul, all of us can be equipped to focus on the international market to get more people into the respective regions and those regions to contribute to the national effort. The Minister knows where I am coming from. I am aware that people in County Clare are extremely annoyed at this disruptive Sligo Senator from the north west potentially querying why Shannon Airport should be supported.

Senator Martin Conway

So is Deputy Timmy Dooley.

Senator Marc MacSharry

I am simply using the complaint to the European Commission to raise awareness and highlight the fact that we must have proportionate support for Ireland West Airport Knock in the interests of that region performing to its potential and making a positive contribution to the national effort.

Deputy Leo Varadkar

As the Senator will be aware, the Government decided in November to proceed with the separation of Shannon Airport from the Dublin Airport Authority, DAA, and to merge the airport with a restructured Shannon Development to form a new integrated Shannon entity in public ownership, "NewCo". This will grant Shannon Airport the freedom to determine its own future in the best interests of the airport itself and of the Shannon region. It will free the board and management of Shannon Airport, together with the employees, to bring a fresh approach to the future development of the airport.

In line with this Government decision, the assets and business of Shannon Airport were transferred from the DAA to the Shannon Airport Authority, SAA, on 31 December 2012, following the approval of the relevant order by both Houses of the Oireachtas. Shannon Development and Shannon Airport Authority are both owned by the State and the State, on behalf of its citizens and taxpayers, has been faced with these two ailing companies that have not been realising their potential to make a contribution to the economy of the wider region. The State is, therefore, restructuring its assets to make better use of them as a catalyst for the development of sectoral opportunities, and the creation of jobs, particularly within the aviation sector. This restructuring involves no more than a re-ordering of assets which are already in State ownership. It is the DAA, not Shannon Airport, that borrowed money during the years and it is for the DAA to pay that money back. The State is neither writing down nor writing off any debt as these borrowings will be paid back in full by the DAA. It will be for Shannon now to chart its own future as a separated State-owned company.

There appears to be some confusion in recent debate about the difference between a State airport and a regional airport. Please allow me to clarify that issue. There are two types of airport in the State, the State airports and the regional airports. The State airports, Dublin, Cork and Shannon, are owned by the State and the Government appoints their chairman and boards. They receive no Government grants or Exchequer subsidies. They are expected to fund their own capital development from their profits or borrowings against their own assets which are not guaranteed by the State. They should turn a profit, pay corporation profit tax and a dividend to the State and have done so in the past.

The regional airports - Ireland West Airport Knock, Kerry, Waterford and Donegal - are not owned by the State and we do not appoint their boards. They exist for reasons of regional and social policy to provide essential air access to relatively remote regions that do not have a major airport or State airport nearby. As a result, they can receive Government subsidies, subject to certain EU rules. Generally, these subsides are provided to allow them to break even and remain operational. They are not expected to pay a dividend and the Government does not guarantee their debts or financial obligations.

I have consistently said that all Irish airports should operate to a commercial mandate and have stressed on numerous occasions that regional airports, including Ireland West Airport Knock, must work towards achieving operational viability over the near term, particularly given the downward trajectory of Exchequer funding. In this regard, apart from the consideration of restructuring the State-owned airports, I have also endeavoured to rationalise the system of State support for the regional airports not owned or controlled by the State, including those in the ownership of private companies and private trusts, and the Government now has a settled policy in relation to those airports.

In line with the recommendations of the value for money review on the regional airports programme published in 2011, the Government has decided that funding under that programme for the period 2012-2014 is being consolidated on the four regional airports of Ireland West Airport Knock, Donegal, Kerry and Waterford since the start of 2012. Funding for Galway and Sligo airports ceased in 2012. Subject to funding availability, the other four airports, including Knock, will continue to be eligible for funding up to the end of 2014 when the current EU-approved scheme expires.

While it might be possible to put a scheme in place to fund the regional airports beyond 2014, any such scheme would, due to new EU guidelines, be subject to more stringent eligibility criteria and to prior approval by the European Commission. Of course this would also require the allocation of scarce Exchequer resources rather than to other competing demands such as public transport, road maintenance, hospitals and schools.

Since 1993, Ireland West Airport Knock has had the benefit of around €40 million in support under the regional airports programme. This includes funding for PSO air services, which although paid directly to the airlines, also benefits the airport through revenue paid by those airlines to the relevant airport. Approximately €1.3 million was provided in 2012 to the airport, €700,000 in capital expenditure funding for capital projects and €600,000 in operational subvention under the "opex" programme. In addition, in 2012 alone the tourism agencies, Tourism Ireland and Fáilte Ireland, provided a total of over €1 million for overseas marketing related to Ireland West Airport Knock and the surrounding region. Shannon, Cork and Dublin have not received such Exchequer support. While some may argue that Shannon and Cork have been cross-subsidised by Dublin, it could equally be argued that had these two airports, Cork and Shannon, the same status as Ireland West Airport Knock, a regional airport, they would have been eligible for the same Government grants for the past few decades.

The measures the Government has initiated in relation to Shannon will give rise to some degree of increased competition not only between the State airports but also between them and the regional airports, including Ireland West Airport Knock and Kerry, which is good. These measures are focused on increasing the overall number of passengers to and from Ireland through increased efficiencies and attracting new aviation business that would otherwise not be based in Ireland which will have a beneficial national impact.

I am confident that there is a role for all remaining airports in providing scheduled air access for Ireland, including Knock, Donegal, Kerry and Waterford. It is also obvious that visitors arriving at Shannon Airport are more likely to visit western regions than tourists arriving at Dublin Airport. I know the Senator will be aware of the importance of transatlantic connections and access to Heathrow Airport through Shannon Airport and that he will want to see the airport's decline halted.

I regret that some have attempted to suggest that the development of Shannon Airport must come at the expense of Knock airport. Both airports can have a bright future, particularly as the economy recovers and tourism initiatives such as The Gathering help to bring more people into the country. It will be for the airport boards and managements to bring this about.

In the context of overall aviation policy, the Senator may wish to be aware that I launched a consultancy process on the development of an aviation policy for Ireland at a major conference in December and that this will be pursued through 2013, leading to the adoption of a new policy in 2014. In that context Ireland West Airport Knock has been invited to participate actively and this is an opportunity for them to set out its vision for the future of Knock airport and the regional airport sector.

I reiterate for the benefit of the House that the Department and its agencies stand ready to work with Ireland West Airport Knock, but it must be within the existing budget envelopes, within state aid rules and must have regard to the fact that there are other regional airports in countie Kerry, Donegal and Waterford that also need to be taken into account.

In regard to the measures announced by the Minister for Finance, Deputy Michael Noonan, in the budget, these will appear in the Finance Bill which has yet to be published. Any measures will apply equally to all airports.

Senator Marc MacSharry

I thank the Minister for taking the time out of his busy schedule to respond. The mistake being made in the context of the north-west region is that Ireland West Airport Knock is seen as a regional airport. If we could grasp the opportunity it presents in that region it could pay dividends for the State. I am not seeking a huge amount.

Acting Chairman (Senator Marie Moloney)

Does the Senator have a supplementary question for the Minister?

Senator Marc MacSharry

I ask the Minister to take a strategic approach and make proportionate supports available to Ireland West Airport Knock and to view it as the international airport that it is, rather than a regional airport. This can be a contributor. I do not see it as an either-or issue. I am simply saying we must do something to acknowledge the strategic importance of Ireland West Airport Knock and what it can achieve for the region and Ireland Inc. as a whole in the same way as we in the north west acknowledge and support the fact that we need a strong Shannon and a strong south west.

Deputy Leo Varadkar

All I can add is that Ireland West Airport Knock is a regional airport and extremely important to Connacht and the north west but from a national point of view it accounts for only about 2% of air traffic to Ireland. If it was not a regional airport it would not be eligible for "opex" or "capex" funding or State aid. If it was a strategic airport such as Dublin Airport which accounts for 80% of traffic into the country, it would not be possible to State aid it. It is not possible to give Ireland West Airport Knock or any other airport some special status ,whereby it can receive State aid that other airports do not receive. The airports in State ownership that operate on a commercial basis receive no Government grants and no State aid. State aid is only provided for regional airports, precisely because they are regional airports and are important in providing access to regions that do not have motorway access such as County Donegal. Whatever is done for Ireland West Airport Knock must comply with state aid rules and similar treatment must be given to Donegal, Kerry and Waterford airports. It is not possible to give Ireland West Airport Knock some form of special treatment or priority treatment. That is not what has been done at Shannon Airport.

The Seanad adjourned at 6.50 p.m. until 10.30 a.m. on Wednesday, 23 January 2013.

Seanad Éireann debate - Tuesday, 22 Jan 2013