DAA ready to draw up Cork debt plan

Dublin Airport Authority (DAA) is prepared to put proposals concerning debt at Cork airport directly to Government, even if agreement cannot be reached with the authorities locally in Cork.

Cork airport is attempting to become debt-free as soon as possible. Former minister for transport Séamus Brennan signalled that its debts should transfer to the balance sheet of Dublin airport. However, Dublin needs to have certain distributable assets in place before major debts can be transferred.

Some directors of the DAA have also raised the issue of whether wiping the debts of Cork airport clean would amount to a form of State aid. It is understood the Department of Transport has sought the advice of the Office of the Attorney General on this.

Under the 2004 State Airports Act, the three airports are meant to become autonomous bodies. When the bill was introduced, Mr Brennan said he hoped Cork airport would be debt-free under the new structure. But agreement on this has proved elusive and the DAA claims it was never established definitively that debts of up to €200 million would transfer.

It is understood from information seen by The Irish Times that the DAA is prepared to press ahead with its own plans if agreement cannot be reached with Cork Airport Authority.

The accountancy firm BDO has been appointed to study Cork's development and its debt burden. Arising from this process a business plan for Cork will be drawn up.

It is understood the DAA would prefer agreement with the authorities in Cork on this, but if agreement cannot be secured, it will submit a business plan for Cork airport to the Government without agreement.

The key players in the next few months will be the Ministers for Finance and Transport, Brian Cowen and Martin Cullen respectively. So far they have been careful to avoid committing themselves on the issue, although Mr Cullen has admitted Dublin's balance sheet is not yet strong enough to absorb the debts.

The debt burden could seriously hamper Dublin's own plans to build a needed second terminal and add a new Pier D to the airport.

In a parliamentary reply in March, Mr Cullen said: "We should also bear in mind that Dublin Airport Authority is now embarking on an investment programme of at least €1.3 billion for Dublin airport, which is essential for the development of this country. I do not know where the deputies think the assets will come from to cater for all that, and for the borrowings," he said.

This week it was disclosed that the opening of a new terminal in Cork airport was being deferred by up to a month because of delays in construction.

Cork Airport Authority issued a statement on Thursday confirming it had informed employees and customers that, due to delays in construction, access to the terminal for testing and training would not be possible until May 8th.