Dáil Éireann Debate, Thursday - 29 September 2016
264. Deputy Robert Troy asked the Minister for Transport, Tourism and Sport if the regional airports will avail of the recent funding due to the EU 75% restrictions on state aid; if he considers the four regional airports will be in a position to raise the necessary 25%; his views on whether a case can be made for 90% funding; and if he will make a statement on the matter. [27907/16]
Amharc ar fhreagraI announced on 14 September last that an allocation of €2.7m in funding support for the four regional airports in Donegal, Ireland West Airport Knock (IWAK), Kerry and Waterford, most of which was in respect of safety and security projects at the airports that were approved for funding under the CAPEX Scheme of my Department's Regional Airports Programme.
The maximum level of grant aid that is permitted under the 2014 EU Guidelines on State aid to airports and airlines for projects that fall within this Scheme is 75% of the 'funding gap', i.e. the net present value of the difference between the positive and negative cash flows (including investment costs) over the lifetime of the project. The projects that were the subject of my announcement earlier this month were all approved at this maximum 75% aid rate.
As the Deputy has indicated, the EU Guidelines provide that, in certain limited circumstances, an aid rate exceeding 75% may be justified in exceptional circumstances for airports with traffic volume below 1 million passengers per annum. In such a scenario, the EU Commission have indicated that a business case, justifying the proposed higher aid rate, would have to be approved by them.
Clearly, the EU Commission view any support above the 75% level as an exception, rather than the norm.
I believe that having the public purse pick up the tab for three-quarters of the cost of airport investments removes a considerable financial burden from our regional airports and it is not unreasonable that these airport companies should fund the balance from their own resources.
I am aware, however, that IWAK has indicated that, even with the maximum level (75%) of capital support allowed for under the EU Guidelines, they believe that they will be unable to finance their two major upcoming projects – an apron extension and an overlay of the runway. My Department has indicated to IWAK that we will support the making a case to the EU Commission to permit a 90% aid rate for these two planned major projects.
I should also mention that under the Public Policy Remit Capital (PPR-C) Scheme of the Regional Airports Programme, former Transport Minister Paschal Donohoe announced €1.2m in funding last April for the four regional airports. The PPR-C Scheme caters for projects and operations at the airports which are generally obligatory under national or international aviation requirements and which involve costs for the airports that generate no economic return (e.g. Air Traffic Control, fire services, security services, etc). Exchequer support for PPR-C projects is not regarded as State aid and the support provided by my Department under this Scheme is at the 90% level.
