Minister denies debt guarantee to airport

TRANSPORT Minister Noel Dempsey sparked a fresh row yesterday by denying Cork Airport claims he had guaranteed financial support if it struggled to service its debt.

The Cork Airport Authority (CAA) voted on Thursday to accept a controversial €113 million debt package to secure its independence from the Dublin Airport Authority (DAA).

The CAA said it sought and received assurances that the Government would bail the airport out if it failed to meet repayments.

But Mr Dempsey said Cork Airport had been given no such assurances, stating: “I couldn’t give those assurances. European state aid and competition rules would prevent it.”

“This is a direct contradiction to the position as stated by the CAA and raises serious questions about the basis on which the decision to accept a €€113m debt was taken,” Fine Gael TD Deirdre Clune said.

Senator Jerry Buttimer said Mr Dempsey and the CAA should be called before the Dáil transport committee to explain their contradictory positions.

Under the terms of the Peter Cassells-brokered deal, Cork Airport will assume responsibility from the DAA of a €113m loan.

An area near the airport’s second runway and land in the adjoining business park, with a combined value of between €50-€70m, will be transferred to Cork.

The DAA will also pay €10m towards pensions for CAA staff.

The deal was discussed during a CAA board meeting on Thursday.

The four worker-directors, Tom O’Neill, Tony O’Connell, Mary O’Halloran and Sean Mac Suibhne, joined by Alf Smiddy, voted against acceptance.

Cork Airport chief executive Pat Keohane, Don Cullinane, Humphrey Murphy, Pat Dalton, and Loretta Glucksman, in contact by phone from America, all voted in favour. Veronica Perdissatt abstained.

The tie resulted in chairman, Joe Gantly, casting the deciding vote to accept.

Enterprise Minister Micheál Martin welcomed the outcome and said he is confident the airport would remain competitive.

“My main priority is to move away from the Dublin operation and set up on our own — people would prefer less debt at the end of the day but it’s a State company and people seem to have missed that point,” he said.

Siptu official John Pearson described the vote as a “purely political act”.

“We were promised in 2003 that we would be debt-free. We bought in to that in good faith.”

Public Accounts Committee chairman Bernard Allen TD expressed concern that passenger charges could rise. “Once again this arrogant Government has shown a total disregard for the regions,” he said.

Cork Chamber chief executive Conor Healy said: “Successive ministers for transport have reneged on their commitment to Cork Airport, which makes usseriously question Government policies on balanced regional development.”

Meanwhile, Pat Shanahan, chairman of Shannon Airport Authority, welcomed news that separation of the airports would proceed.