Thursday 18 July 2019

Shane Ross’s €5m grant for airport with no flights

Minister rejected officials’ advice

‘No new money’: Transport Minister Shane Ross. Photo: Kyran O’Brien.
‘No new money’: Transport Minister Shane Ross. Photo: Kyran O’Brien.
Kevin Doyle

Kevin Doyle

TRANSPORT Minister Shane Ross has gone against the advice of spending officials by giving €5m to an airport which hasn’t had a single commercial flight in three years.

The ministers for finance and regional development both raised red flags about the handout for Waterford Regional Airport – but it was pushed through at Cabinet last Tuesday.

The Irish Independent understands a memo compiled by the Department of Public Expenditure suggested the allocation was not justified.

The airport is in the constituency of Mr Ross’s Independent Alliance colleague John Halligan.

The Minister of State confirmed that there was significant opposition within Government, saying that while negotiations were always calm he had to fight “tooth and nail”. 

Mr Halligan said: “If people want to say it’s parish-pump politics, I don’t care. It’s a big hit for the south-east.”

It comes at a time when Finance Minister Paschal Donohoe’s management of the national purse strings is under increasing scrutiny.

Earlier this week, the Irish Fiscal Advisory Council (IFAC) warned the Government's medium-term projections for the public finances are "not credible".

Asked why €5m was being provided for the airport in spite of advice to the contrary, a spokesperson for Mr Donohoe said he had indicated to the Department of Transport that "no new money" would be provided.

"Any additional allocation for Waterford Airport must be made from within the capital funding already allocated. The decision was made on that basis," the spokesperson said.

On top of the direct donation from the Exchequer, another €2m of taxpayers' money will be provided from the coffers of Waterford, Kilkenny and Wexford county councils.

A number of employers in the south-east, including Glanbia, Coolmore Stud and Dawn Meats, are also being asked to stump another €5m to help fund the project.

Mr Halligan, who spent six years on the board of Waterford Airport, argued it was "unprecedented" that private investors were going to help build a runaway.

"I trust them rather than the civil servants on this," he said.

Waterford has not operated a scheduled commercial service since June 16, 2016, when Belgian airline VLM discontinued flights to Birmingham after entering receivership.

The runway, when extended from its existing length of 1,433 metres to 2,280 metres, will be able to accommodate commercial passenger aircraft such as Boeing 737s and Airbus 320s.

In 2012, more than 77,000 passengers used Waterford Airport - but by the time flights were suspended in 2016 this was down to 13,500.

Efforts to develop routes to Luton, Birmingham, and Manchester in 2017 failed.

Ministers were told this week that their focus should be on supporting the regional airports in Donegal, Knock and Kerry.

But a negative assessment in relation to Waterford from the Department of Public Expenditure was backed up by a similar evaluation from the Department of Rural Affairs.

It was noted that while "no new money" was being provided to Mr Ross, there was an "opportunity cost" associated with diverting €5m to an airport which only caters for a coastguard helicopter and private jets.

However, sources said Taoiseach Leo Varadkar was in favour of supporting Waterford, having met with business representatives alongside Mr Halligan.

But one Fine Gael minister told the Irish Independent: "If it wasn't in Waterford, it wouldn't be happening."

Another suggested the announcement was deliberately delayed until after the local elections so as to avoid controversy.

A spokesperson for Mr Ross said the project was merited "from the perspective of regional development, tourism and enterprise". They argued it was fully aligned with the Government's commitment "to support the dispersal of economic growth throughout the regions".

"This particular model of funding, delivered in partnership with private and local authority interests, is a new one in the context of funding for regional airports.

"As a result, the minister has attached certain conditions to the funding.

"Firstly, it will be dependent on the airport being able to demonstrate, following the necessary procurement processes, that the project can be delivered for the estimated amount of €12m.

"In addition, the Exchequer contribution of €5m will only be paid when all upgrade works are completed and the runway is confirmed to be ready for service by the Irish Aviation Authority," the spokesperson said.

Mr Halligan said the south-east deserved the investment.

"This is nothing to do with John Halligan, Shane Ross or the Independent Alliance kicking up a stink. I'm comfortable with where I am on it," he said.

"I don't even know if I'm standing [for election] again. If I genuinely thought this airport wasn't viable, I wouldn't do it."

Irish Independent

Today's news headlines, directly to your inbox every morning.

Also in this section