Airport debt dispute - Consultants should drop contract

IT is totally unacceptable that financial consultants, appointed to act as independent brokers in the ongoing debt dispute between Cork and Dublin airport authorities ...

... should also be hired to advise the latter on the break-up of the State-owned Great Southern Hotels group.

In this potential conflict of interest scenario, there are compelling reasons for BDO Simpson Xavier to drop one or other of the highly lucrative contracts.

Otherwise, its independence will be in question. Rightly or wrongly, it will be virtually impossible for the firm to avoid the inevitable charge of bias in favour of Dublin Airport Authority, which commissioned the review of the multi-million euro sale of the hotel group.

When it announced the break up of Aer Rianta, the Government recognised the need to help launch the independent Shannon and Cork authorities on a sound financial footing. But it has since reneged on its written pledge that Cork would begin its new role debt-free.

Basically, the Government’s plan was for Dublin, by far the larger and busier airport, to shoulder the cost of building the new terminal at Cork.

Originally estimated at €160 million, the final bill could top €200m.

In the meantime, however, the Dublin Airport Authority has refused to pick up the tab for the overall project. This means before it even gets off the ground, the fledgling Cork venture would be saddled with crippling debts ranging between €80m and €100m.

The conflict of interest scenario has arisen despite Transport Minister Martin Cullen’s assurance that the review of the airport dispute would involve independent consultants.

It is disingenuous of Mr Cullen to be now seen as supporting the appointment of a group carrying out separate consultancy work for Dublin Airport.

It behoves Government to honour its pledge that Cork Airport would be free of debt and that the review would be fully independent.

It is unsatisfactory that airlines and the public are now facing possible increases in landing charges, passenger fees and car parking costs. Fears that Cork Airport could become a lame duck operation cannot be lightly dismissed. With the airport’s future in the balance, the possible conflict of interest scenario exposed by Labour TD Kathleen Lynch is insupportable.

The financial consultants have been placed in the invidious position of acting separately for the protagonist on one side of this dispute while simultaneously attempting to sort out the competing interests of rival authorities.

From a professional and pragmatic viewpoint, it flies in the face of logic that an expert group, seeking to resolve the Cork-Dublin airport financial row, should also be handed the lucrative contract of acting as consultant to the Dublin Airport Authority for the sale of the Great Southern Hotels Group.

In this intolerable situation, it is impossible to have a level playing field.