Fudged deal gives McCreevy a veto on Aer Rianta break-up

Compromise on airports: The deal on the break-up of Aer Rianta will implement the controversial plan in stages rather than the…

Compromise on airports: The deal on the break-up of Aer Rianta will implement the controversial plan in stages rather than the single sweeping measure proposed last year by the Minster for Transport, Mr Brennan. In short, it is a fudge.

Despite a Cabinet decision last July to establish independent, autonomous airport companies at Dublin, Cork and Shannon within 12 months, it now appears that the Minister for Finance, Mr McCreevy, has been given a veto over the final implementation of the policy.

People close to Mr Brennan reject that interpretation. But the fact remains that the legislation will require Mr McCreevy to give his consent to the final transfer of assets from the Dublin Airport Authority to the authorities at Shannon and Cork.

This will not now happen until next April at the earliest, some nine months later than the deadline set by Mr Brennan. He has championed the initiative for two years and received strong backing from the Tánaiste, Ms Harney.

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Under an agreement reached early yesterday which removed the Aer Rianta obstacle to a social partnership pay deal, legislation will create three new airport authorities at Dublin, Cork and Shannon.

The board of the Dublin authority will replace the current Aer Rianta board, chaired by Mr Noel Hanlon, which has had a tense relationship with Mr Brennan.

The three boards will be required to agree what day-to-day management functions will be transferred from Dublin to Shannon or Cork.

But no assets or staff will be transferred from Dublin until the boards produce business plans which demonstrate a viable future for each of the airports.

At least in the short and medium term, this structure seems akin to that mooted in a plan for the formation of subsidiary airport boards under Aer Rianta which Mr Brennan rejected last year.

However, Government sources insist that the structure will ultimately deliver Mr Brennan's objective with three fully independent and autonomous authorities.

While it was suggested during the pay talks that airport boards would be given a year to produce their plans, Ms Harney intervened to demand that the deadline be brought forward to next April.

She also rejected union demands that pay, conditions and work practices in Aer Rianta should be extended throughout "Dublin airport zone" and in any new independent terminal at the airport.

The Government has taken no decision on the development of such a terminal, but clarity is expected soon.

The timelag in the transfer of assets allows for some cooling off by the Aer Rianta unions, who remain opposed to the break-up initiative.

In addition, senior Government sources say the delay will enable Dublin to build up its capital reserves in advance of the decision to transfer assets worth €90 million to Shannon and assets worth €110 million to the Cork authority.

The sources say this process could be achieved within six months in respect of the assets in Shannon, while the process could take up to 18 months in the case of the Cork assets.

Meanwhile, the boards will be charged with the development of business plans for the airports.

But with SIPTU maintaining yesterday that it was "totally untrue" to suggest that it had agreed to the break-up, convincing the trade unions will not be easy.

One informed trade unionist said yesterday that SIPTU only went along with the plan "in the hope that the business plans don't stack up".

More importantly, the very fact that the proposals must be to the satisfaction of Mr McCreevy implies that he has yet to see a business plan which justifies the policy.

If this raises fundamental questions about the merits of the break-up, it seems extraordinary that the Cabinet went ahead with the original decision in the absence of detailed financial projections.

Arthur Beesley

Arthur Beesley

Arthur Beesley is Current Affairs Editor of The Irish Times