Tuesday, 2 March 2004

Questions (23, 24)

Róisín Shortall

Question:

109 Ms Shortall asked the Minister for Transport the status of the Government decision announced by him on 10 July 2003 to proceed with arrangements with a view to establishing Dublin, Shannon and Cork as independent airport authorities under which new arrangements the three airports would compete with each other and vigorously pursue new business, free from central control, including arrangements (details supplied), in the wake of the press reports of 21 February 2004; and if he will make a statement on the matter. [7091/04]

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Denis Naughten

Question:

344 Mr. Naughten asked the Minister for Transport if his Department has resolved the legal difficulties surrounding the break up of Aer Rianta; if he has satisfied himself that the three airports are commercially viable as stand-alone entities; and if he will make a statement on the matter. [6836/04]

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Oral answers (25 contributions) (Question to Minister for Transport)

I propose to take QuestionsNos. 109 and 344 together.

I am satisfied that the Government decision of July last to restructure Aer Rianta will be implemented within the timeframe originally envisaged for this project. As I said in response to questions a few weeks ago in this House, there are significant technical and legal issues which my Department and its advisers are working through in conjunction with Aer Rianta management and its advisers. We want to ensure, in accordance with the Government decision, that the new independent Shannon and Cork airport authorities commence business with a fresh start while at the same time ensuring that Dublin Airport, which is the country's main metropolitan gateway, is also positioned to develop and grow to meet the increasing travel demands of our business and tourism sectors.

The articles in the media on 21 February last referred to a confidential document drawn up by my Department for the purpose of advancing the implementation of this important, strategic and of course complex project. The project steering group which comprises officials of my Department and the Department of Finance, Aer Rianta management and advisers, is evaluating the technical, operational and commercial aspects of the approach proposed in that document. This exercise includes the prompt finalisation of revised financial projections for each of the three State airports as stand-alone entities. Obviously, it is essential that each of the new airport authorities would have sound opening balance sheets and that each would be able to trade successfully on a commercial basis in the future. As I have emphasised on numerous previous occasions, however, the preparation of these revised and updated financial projections will not in any way inhibit the commercial freedom and responsibility of the new authorities, when formally established, to develop strategic business plans for each of the three airports.

While no decisions have yet been taken on the precise methodology to give effect to the Government decision, the approach being explored by the steering group would involve the transfer of Shannon and Cork airports out of Aer Rianta by way of a distribution in specie. Under this approach, the transfers would take place on a phased basis as the reserves of the parent company permit. It would be an objective of this approach to keep the timescale associated with the phased transfers to the minimum and, in this regard, other financial options for allocating airport assets among the three airports are also being examined. In this regard also, the issue of Aer Rianta's main subsidiaries such as Aer Rianta International and the Great Southern hotels group is being carefully examined. Deputies will appreciate that while this important work is ongoing, it would not be appropriate for me to speculate on or pre-empt the outcome.

Additional information not given on the floor of the House.

In tandem with this work, my Department is also well advanced with the drafting of the necessary amending legislation to give effect to the restructuring. At this stage, it is not envisaged that the amending legislation will dictate the specific methodology which is ultimately decided upon to effect the restructuring. Instead, it will contain enabling provisions which will preserve a degree of flexibility and ensure that optimum mechanisms, which are in the best interests of each of the new independent airport authorities, are employed. The enactment of the amending legislation, which I believe will be achieved before the summer, will also enable the establishment of the three new boards for the State airports on a formal, statutory basis.

Both I and my Department are also maintaining the ongoing process of full engagement with the Aer Rianta unions to deal with issues of concern to workers arising from the implementation of the Government decision. When the revised financial projections for the three airports which I referred to earlier are completed, I have already confirmed my willingness to share key financial information with the unions in the context of the current engagement process being facilitated by the Labour Relations Commission before legislation is finalised. As Deputies are aware, I have also conveyed assurances and clarifications about the protection of the current terms and conditions of employment of Aer Rianta workers in the context of the three new independent airport authorities when established.

Does the Minister accept that he has made a hames of the restructuring of Aer Rianta? Does he accept that, when he announced last July on the basis of a hunch that he intended to break up the Aer Rianta company, he did not have a clue what he was getting into? Does he accept that, because of that, he has had to employ an army of consultants, such as PricewaterhouseCoopers, Matheson Ormsby Prentice and God knows who else? Will he inform us how much taxpayers' money he is spending on consultants to get him out of the legal and economic mess he has created for himself and Aer Rianta?

The Minister said that he was on target and within his timescale. I remind him that, in his announcement last July, he said he would immediately establish the three boards designate for the three airports. That has not been done. He spoke about having builders on site in Dublin Airport by last Christmas to commence construction of the second terminal. There has been no movement on that, nor has there been any movement on pier D. The Minister spoke about having the legislation in the House by last December. There was a delay and he promised it for January. It is now the end of February and there is no sign of that legislation because it is almost impossible to legislate for the hunch the Minister had in mind last year not knowing and not giving any consideration to what was involved.

The Minister has informed us in recent days that the reason he is not publishing the legislation is that he is meeting the unions as part of his negotiations. What negotiations are taking place? When did the Minister last meet the unions? Has he met the unions since the industrial action was called off some weeks ago?

The Minister is talking about legislating for something for which it is not possible to legislate. Will he put on the record the legal obstacles that have been identified by the consultants? How does he propose to overcome them?

There are about 18 questions there.

The Minister has about one minute to answer the questions.

I do not accept that I made a hames of it. That is the answer to the first question. I do not accept that it is impossible to legislate.

Where is the legislation?

Deputy Shortall should allow the Minister to continue without interruption.

I do not accept that it is impossible to legislate. This House should have no difficulty in taking a State company and establishing three independent airports by legislation.

The Minister cannot just take a PLC——

We will move on to the next question if the Deputy frustrates the Minister in answering the question. It is not appropriate to do that in a parliamentary democracy.

The Chair is giving the Minister excuses for dodging the question.

The Deputy took three and a half minutes to ask her question. The Minister had one minute remaining to answer it.

I depend on the Chair to notify me of time.

It is not impossible to legislate. The legislation is almost completed and will be brought before the House. There are issues that have yet to be resolved. I explained to the Deputy that they were complex, and that is why we need good advice from consultants and specialists to ensure we do this properly. We are doing it for the future. The reason we are doing it is to allow Shannon and Cork airports to have a fresh start with new leadership and regional input and to place the future of these airports in the hands of the regions. The Deputy and I will never agree on that and I do not envisage there ever being a meeting of minds on it. I firmly believe the Shannon and Cork regions have the capacity, talent, ability and determination to grow those two airports in a way that will never happen in the Aer Rianta structure.

It does not matter what the Minister believes, the evidence——

The time for this question has concluded. We must move on to question No. 110.

It is not a matter of what the Minister believes. He is doing a huge damage to Shannon Airport and Cork Airport.

That is the trade union view. We know from where the Deputy is coming on that matter.

No, it is the view of the——

There are other Deputies who have submitted questions and who are entitled to hear the replies to them.

Deputy Shortall should ask the people of Shannon and Cork.

They are extremely concerned about the jobs haemorrhaging out of Shannon Airport.

I believe in Shannon and Cork.

What about——

I will have to ask Deputy Shortall to leave the House if she does not allow the Minister to answer question No. 110 in the name of Deputy Eamon Ryan.