Cassells urges Cork airport to shoulder debt of €113m

FORMER TRADE union leader Peter Cassells has recommended to the Government that Cork airport should assume responsibility from the Dublin Airport Authority (DAA) for a €113 million loan on separation.

In return, Mr Cassells has recommended that the DAA should transfer ownership of land around the airport to the Cork Airport Authority, along with its stake in the Brooklyn business park. These assets have been valued at €50 million to €70 million.

Mr Cassells has also suggested that the DAA make a payment of up to €10 million to the Cork Airport Authority to help it meet pension and "other funding requirements".

When an €13 million adjustment in the costs of servicing the European Investment Bank loan is factored in, Mr Cassells has projected Cork's "funding solution" at €20 million to €40 million.

If the recommendations are accepted, the CAA will gain control of €220 million worth of assets while the DAA will have its debt reduced by €113 million.

In a statement, Minister for Transport Noel Dempsey, who published Mr Cassells' report yesterday, said the recommendations "provide an opportunity for a final decision" to be made on the consideration to be paid by the CAA in relation to the transfer of €220 million worth of net assets on separation from DAA.

"Having considered them [the recommendations], I believe they represent a sensible solution, which I would urge both parties to accept as soon as possible," Mr Dempsey said.

Although no definitive timeframe has been set down for an agreement, it is understood that the Minister wants to resolve the matter before the summer.

"I have asked Mr Cassells to assist the two boards as regards bringing this issue now to a speedy, mutually acceptable conclusion," Mr Dempsey said.

The DAA and CAA both said they had received the report and were "studying carefully" its findings. In his report, Mr Cassells said the two sides were unable to reach a "final agreement".

Mr Cassells' recommendations are not likely to sit well with the CAA, which was originally promised a debt-free separation from Dublin, as was Shannon.

The report states the DAA concluded Cork could "support" debt levels of "at least" €100 million.

Advisers to the CAA, meanwhile, concluded last year that an initial debt of €85 million was "sustainable" but revised this down to €50 million to €60 million.