THE DEPARTMENT of Transport has cancelled a competition to find an external company to operate Terminal 2 (T2) at Dublin airport, which is slated to open in November.

Instead, Minister for Transport Noel Dempsey has mandated the State-owned Dublin Airport Authority, which owns the building, to operate the facility.

The decision was criticised by Ryanair yesterday as a “scandal”, while Fine Gael criticised the Minister for “squandering” up to €1 million on the “facility management procurement process” that involved three external consulting firms.

Mr Dempsey has given the DAA three months to confirm to his office that it will be able to operate T2 within “a benchmark set out recently by the Commission for Aviation Regulation (CAR)”.

A consultants’ report commissioned by CAR found that it would cost €45 million to operate T2 for a full year, while the facility would need 500 staff.

Mr Dempsey initiated the procurement process in February 2009, hiring Goodbody Corporate Finance, Matheson Ormsby Prentice and Mott MacDonald to manage the competition.

The consultants sought operators for services including cleaning, maintenance and certain security-screening processes.

In parallel with this, the DAA was to have supplied a benchmark price, which was to have been compared with the bid submitted from the third parties.

It is understood that the DAA never submitted a benchmark price and the competition was scrapped after no third party passed the pre-qualifying phase.

The DAA was responsible for building T2, which will handle up to 15 million passengers when it opens later this year.

The airport manager is incentivised to open T2 on schedule as the aviation regulator has granted it an increase in landing charges once the building opens.

Fergus Dowd, Fine Gael’s transport spokesman, described the decision as another “Dempsey disaster”.

He said the dice was “loaded” in the DAA’s favour.

Ryanair chief executive Michael O’Leary said the Minister had done away “with this fig leaf of competition and simply awarded the contract for T2 to the DAA monopoly”.