Report to recommend sell-off of Dublin, Cork and Shannon airports

THE sell-off of the state airports at Dublin, Cork and Shannon is expected to be one of the more controversial recommendations contained in a new report due to be presented to the Government later this week.

The Review Group on State Assets, chaired by economist Colm McCarthy, is understood to come out in favour of the sale of the three airports controlled by the Dublin Airport Authority (DAA).

However, it is believed the report, which is expected to come before the Cabinet at its weekly meeting tomorrow, does not recommend the immediate privatisation of the country’s three main airports because of the DAA’s current debt of €750 million.

The group’s recommendations may also impact on plans for the separation of the three airports as independent operators, which would allow Shannon and Cork to compete with Dublin for business.

Former transport minister Noel Dempsey announced in December 2008 that he was deferring a decision on the separation of the three state airports until 2011.

Mr Dempsey claimed his decision was based on business plans submitted by the boards of the three airport authorities and he accepted their view that it would be best to defer the planned separation because of difficulties in the aviation market at the time.

Since then revised governance arrangements have been agreed by the three airport authorities to allow for reciprocal membership of each other’s boards.

The chairmen of the Cork and Shannon boards are now members of the DAA board, while the DAA in turn has nominated a senior executive to the boards of the other two airports.

In 2008, outgoing chairman of the Cork Airport Authority Joe Gantly controversially used his casting vote to accept a €113m debt on the airport’s new terminal as part of gaining independence from the DAA. However, both Cork and Shannon remain under the control of the DAA because of the deferral of their proposed separation.

The new Programme for Government published by Fine Gael and Labour last month contains no specific reference to plans for the break-up of the airports into separate entities. It merely states the Government will “work with the Aviation Regulator to cut airport charges in order to deliver increased routes, airlines and passenger numbers”.

However, the coalition promised to generate up to €2 billion by selling “non-strategic” state assets.

Briefing papers prepared for Transport, Tourism and Sport Minister Leo Varadkar show a decision on whether to proceed with the separation “is required in 2011”.

Labour TD Tommy Broughan has warned that any proposal to sell Dublin, Cork or Shannon was likely to be resisted by the party’s members in the Cabinet.

“We have always been opposed to the sale of key infrastructure networks, whether we’re talking energy companies or anything else,” said Mr Broughan.

Fianna Fáil leader Micheál Martin said yesterday he was very much opposed to the sale of the state airports.

“They are of strategic importance to an island nation that relies on connectivity of people, products and services to ensure its development,” said Mr Martin.

“These facilities were built up at considerable cost to the taxpayer. It’s important that we retain the levers of control of these assets.”

Irish Aviation Authority figures show commercial traffic at Dublin fell by 0.7% in the first three months of 2011 and by 11.8% in Cork and 15.7% in Shannon.