You are viewing the content for Thursday 9 February 2006

Airport faces €80m debt in Government U-turn

By Harry McGee and Eoin English
CORK Airport Authority could be landed with debts of €80 million as the Government prepares to row back on a commitment to leave the new authority debt-free.

The commitment was given by former Transport Minister Seamus Brennan, who said Dublin Airport Authority should bear the cost of building the new terminal at Cork Airport after Aer Rianta was broken up.

But when Senator John Minihan raised the issue in the Seanad this week, the Department of Transport indicated that Cork is unlikely to start independent operations debt-free.

The airport could be facing a debt of up to €80m - half the cost of its new terminal building - which is due to open in April. Servicing the debt could see landing fees and airport car parking charges rise.

Mr Minihan said yesterday he was disappointed that the Government seemed to be reneging on its commitment.

"It gives us little hope that what was originally intended and what everybody understood would happen will now take place.

"If the commitment is not going to be honoured, a mechanism has to be found by the Government to intervene and work out a package with the DAA that satisfies company law and the transfer of assets in order to allow Cork Airport Authority operate debt-free as promised."

He is seeking a meeting with Tánaiste Mary Harney to discuss the issue.

Lord Mayor Deirdre Clune called a meeting yesterday of the city’s 10 Oireachtas members. They will meet in her office next Monday for a cross-party discussion on the debt issue.

"It is very important that we all tackle this for the region," she said.

Fianna Fáil TDs also raised the debt at their parliamentary party meeting. Responding to Mr Minihan in the Seanad, junior minister Tony Killeen said there was an indication early in the airport restructuring process that the intention was to have Cork and Shannon start independent operations debt-free.

However, he said this arrangement was always subject to complying with technical provisions of the Companies Acts.

The minister mentioned the option of a finance lease covering a portion of Cork Airport’s assets to allow its establishment as a fully independent airport. The lease would be taken with the Dublin Airport Authority.

Arbitrated talks between Cork and Dublin airports designed to reach some form of debt compromise are continuing.

Last night Deputy John Dennehy (FF) said an outcome is expected in four weeks.

"Any details on how that will be handled is pure guesswork and idle speculation at this stage," he said.

"I will continue to argue the case for Cork."

Colleague Noel O’Flynn said it appears Cork will have to find a way to service a certain level of debt to operate independently.