I move:
That Dáil Éireann approves the following Order in draft:
State Guarantees Act, 1954 (Amendment of Schedule) Order, 1987
a copy of which Order in draft has been laid before the Dáil on 29th October, 1987."
Is é cuspóir an ordaithe seo atá i ndréacht — an t-Ordú um an Acht Rathaíocht Stáit, 1954 (Leasú ar an Sceideal) 1987 — ná cumhacht a thabhairt don Rialtas dul i mbannaí i gcóir iasachtaí Aer Rianta cpt. mar is gá. Is féidir é seo a chur i gcrích trí leasú a dhéanamh ar an Acht Rathaíocht Stáit, 1954, trí Aer Rianta cpt. a chur isteach i Sceideal an Achta chomh maith leis an suim airgid atá i gceist. Ghlac an Seanad leis an Rún cheana féin ar an 20 Deireadh Fómhair, 1986.
This motion arises from the Government's approval of the construction of a new runway and associated works at Dublin Airport. The motion, if approved, will facilitate the provision of a State guarantee for up to £25 million of borrowing by Aer Rianta. It is unlikely that Aer Rianta's borrowings for this particular project will amount to £25 million but the draft order provides for a maximum of that amount to ensure that the amendment will be adequate to meet the cost of any unforeseeable developments.
The provision of a State guarantee facility in respect of borrowings by Aer Rianta requires an amendment to the Schedule to the State Guarantees Act, 1954. It is in this context that the motion arises. The order in draft has already been approved by the Seanad and Dáil approval is also required before the Government can make the order.
Dublin Airport's runway system dates from the mid-1940s. The runways were designed to cope with the types of aircraft operating at that time as well as aircraft and technological developments then anticipated. Since they were constructed the runways have been extended, overlaid and continuously maintained.
Conscious of the age of the Dublin Airport runway system, the developments in size and weight of aircraft in recent years and the need to provide for the long-term traffic needs of the airport, a group of experts, representative of Aer Rianta, the then Department of Transport and Aer Lingus was established to carry out a detailed examination of the airport's future runway requirements. The group, which completed its work in 1981, concluded that further maintenance of the existing main runway would not be a viable option and recommended that a new east-west runway should be constructed on the southern side of the airport terminal area.
On the basis of the group's report, and following a further technical analysis of the condition of the runways and an assessment of a number of alternative options, the Government gave approval in December, 1985 for the provision of a new 8,650 feet runway, together with associated facilities, at Dublin Airport, at an estimated cost of £31.26 million at 1985 prices.
The new runway will intersect the Ballymun/Naul Road. Local residents and other users of the Ballymun/Naul Road were very concerned about the proposal to close the road and to replace it by two new roads running parallel to and located on each side of the runway, linking the Ballymun/Naul Road with St. Margaret's Road. An action group made strong representations to the Minister for Tourism and Transport objecting to the proposed road closure and sought instead the provision of a tunnel to carry a road under the runway and parallel taxiway.
I can assure the House that all representations regarding the Ballymum/Naul Road proposal were carefully considered and while the Government were disposed to providing a tunnel, they had no option but to take cognisance of the advice of the Garda authorities on the security implications of a tunnel.
Their advice was that for security reasons the tunnel should not be built. In view of the concerns of the local residents, however, the Government decided in July 1987 to provide additional roads and to have further improvements undertaken to existing roads at an additional cost of £3.06 million.
Arising from the construction of the new runway, it will also be necessary to close a section of Collinstown Lane. A replacement road will be provided to connect the lane with the Old County Road at Commons Townland and this will meet the requirements of the local community.
The investment on the overall project will be the largest single investment ever undertaken at a State airport. As well as the runway itself, the project will include the provision of a parallel taxiway system, advanced navigational aids, a new air traffic control tower/technical building and the roadworks I have already mentioned.
The project will provide about 200 jobs at peak during the construction of the runway and the associated work and indeed will be one of the largest in the northern part of County Dublin over the next few years.
The new runway will have an east-west designation and as a result there will be a significant reduction in aircraft noise levels for densely populated areas of Dublin city and county, whose residents have from time to time complained about aircraft noise. Noise levels, in particular, will be significantly reduced in areas such as Ballymun, Finglas, Swords and Castleknock, a factor which I am sure will be welcomed by residents of those areas.
The actual development work on the project commenced in August 1986 with the provision of water and sewerage services to the proposed new air traffic control tower and technical building. A new high tension electricity supply for the project has been provided and relevant drainage works have been undertaken. Work on the actual construction of the runway commenced in mid-July 1987 and the runway should be completed in about 20 months.
I am quite pleased with the progress so far and I am hopeful that the new runway will be operational by early summer 1989.
As Deputies are aware, the three State airports are managed by Aer Rianta on an agency basis on behalf of the Minister for Tourism and Transport. Under these arrangements capital expenditure at the airports has traditionally been funded totally by the Exchequer, while the surpluses earned by Aer Rianta have been surrendered directly to the Exchequer. Recently the company have been given responsibility for the funding of certain commercial projects from their own resources.
In view of the heavy demands on the Exchequer, the scale of expenditure involved in the Dublin runway project, the expected commercial rate of return on the project and the strong financial performance of Aer Rianta in recent years, the Government have decided that the bulk of the funds for the runway project should be provided by the company from their own resources. It is envisaged that the company will provide 75 per cent of the funds required, with 25 per cent coming directly from their own resources and another 50 per cent from borrowings. The remaining 25 per cent of the cost of the project will be provided by the Exchequer in the form of capital grants over the next three years.
Aer Rianta have had discussions with a number of financial institutions including the European investment Bank, on their terms for borrowing. A final decision on the source of borrowing will not be taken until immediately prior to the time of borrowing because of the anticipated fall in interest rates.
In 1986, Exchequer funds amounting to almost £1 million were expended on the runway project. This year total expenditure on the project will be about £6.5 million, of which £2.6 million will be provided by the Exchequer. As some borrowing will arise, it is essential that the appropriate facility for State guaranteed borrowings by Aer Rianta be in place as soon as possible.
Passenger throughput at the three State airports is confidently expected to exceed five million by the end of 1987 compared with 4.42 million in 1986. Dublin naturally, and this is widely accepted, is the busiest of the three airports and accounts for about 66 per cent of the total passenger traffic.
In the ten months to the end of October 1987 passenger traffic at Dublin amounted to 3.1 million, an increase of 22 per cent over the corresponding period in 1986. There is no doubt that the growth in passenger traffic is due to the stimulatory effects of the low air fares policy being pursued by the Government. It is expected that passenger throughput at Dublin Airport for the full year will reach a record 3.5 million, which is over two-thirds of the total expected traffic for the three State airports. To eliminate congestion arising from these increased passenger numbers, improvements were made in the passenger terminal at Dublin Airport earlier this year at a cost of almost £1 million.
On the financial side Dublin's performance is equally impressive. It recorded a surplus of over £10 million in 1986. The provision of the new runway will not only enhance the future prospects of the airport and meet its traffic needs well into the next century, but it is confidently expected that it will generate a further increase in profits at the airport.
I should like to say a few words about our two other State airports, Shannon and Cork, which are managed by Aer Rianta. Major improvements are underway in the terminal building at Shannon and the apron is being extended on a phased basis. The cost of these improvements will be about £2 million and are necessary to enable the airport to cater for the increases in traffic which it is experiencing. Passenger throughput to the end of October this year at 1.1 million was up by about 8.5 per cent on the corresponding period in 1986.
Another welcome development at Shannon has been the construction recently of a new aviation fuel depot which enables Aer Rianta to sell, at very competitive prices, fuel to airlines using the airport. This project was, I am glad to say, financed directly by Aer Rianta from their own resources.
At Cork Airport major improvements are being undertaken which will also involve substantial investment. The main runway is to be extended by 1,000 feet and improved navigational aids will be provided. Improvements are also being undertaken to the terminal building. The overall expenditure involved is in excess of £4 million. The passenger throughput up to end of October this year at 383,369 has shown a 24 per cent increase over the same period last year. I am quite satisfied that the improvements now being undertaken will further enhance Cork's excellent performance of recent times as the airport will be able to accommodate without penalty larger aircraft for longer routes.
I recommend the motion to the House. Mar sin molaim go rithfear an Rún seo.