The Minister for Finance, Mr McCreevy, has ruled out Exchequer support for any of the three Aer Rianta airports. His position, outlined in a letter to the Minister for Transport, Mr Brennan, raises questions about the funding of a new €130 million terminal at Cork Airport.
Because Mr Brennan has indicated that he will separate the airports at Dublin, Cork and Shannon, Aer Rianta is reluctant to fund a terminal which it might not own in the future.
In addition to trade union opposition to Mr Brennan's plans, this has emerged as a central area of uncertainty surrounding his efforts to liberalise the State airport sector.
Mr Brennan's spokesman said he was "pretty close to finalising proposals for Cabinet". It is unclear how he will deal with Aer Rianta's debts if he decides to split the company up. The spokesman said the Minister wanted Shannon and Cork to "start with a clean balance sheet" if they were established as independent entities.
While sources in Government circles believe that the airports at Dublin and Shannon could sustain their debts, it is not known what mechanism Mr Brennan would use to provide funding for the terminal at Cork.
Correspondence between Aer Rianta chairman Mr Noel Hanlon and Mr Brennan shows that Aer Rianta had a concern "about the rationale of investing €130 million in an airport which we might not necessarily own in the future".
The project is at the planning stage. But in the most definitive indication yet that the Government will not fund the project, records released under the Freedom of Information Act show that Mr McCreevy told Mr Brennan that any State support would be "impossible in the short term given current budgetary outlook". The letter was released by the Department of Transport last month, before the Government restricted the Act. Such correspondence is now exempt from release.
It shows that Mr McCreevy told Mr Brennan last October that State support would be "entirely inappropriate" because "the last thing we need is a situation in which our airports end up being run on the same basis as our public transport companies".
Mr McCreevy added: "I believe it is essential that whatever structures are put in place should ensure (and make it explicitly clear from the start) that there would be no question of Exchequer funding (by way of capital investment or ongoing subvention) for any of the airports."
Mr Brennan's spokesman said the Minister agreed with Mr McCreevy.