DAA: Cork Airport must accept €100m debt to go independent

GOVERNMENT plans to establish three independent airports were plunged into a fresh crisis last night after Cork Airport’s board was told it cannot achieve independence unless it accepts a €100 million debt.

The board of Cork Airport Authority (CAA) has called an emergency meeting, which could take place as early as Monday, to discuss the latest development in the four-year saga.

It was confirmed last night the chairman of Dublin Airport Authority (DAA), Gary McGann, wrote to the CAA chairman Joe Gantly on November 26 insisting the CAA take responsibility for e100m of the e220m debt incurred as part of its redevelopment costs.

As far as the DAA is concerned, the only way for Cork Airport to achieve independence is for the CAA to take on the e100m debt as indicated by the Taoiseach, the DAA and supported by the findings of consultants, Mr McGann wrote.

In the absence of this, the DAA will propose to the Government that the CAA will not separate from the DAA, he added.

And even if separation is successful, Mr McGann said a range of employee issues, including pension provision, will still have to be resolved.

The letter has sparked furious reaction amongst CAA board members.

Anger and frustration is rising and confidence in Mr Gantly is low, a source said last night. There is a feeling government policy is being dictated by the DAA, the source added.

A spokesperson for the CAA declined to comment.

Mr McGann’s insistence Cork carry the debt comes despite a government pledge in 2003 that the CAA would start independent operations debt free.

A report commissioned by the CAA earlier this year also found that in ideal circumstances, the airport could only handle a maximum debt of between e50m and e60m.

The report is understood to have recommended a e20m debt level would be more realistic.

News of Mr McGann’s intervention also emerged just days after it was confirmed the CAA has submitted its business plan to the DAA for consideration. The plan, which factors in a debt of level understood to be about e60m, has to be examined by the DAA and the Government, before the CAA can begin independent operations.