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Office
of the Ombudsman Our Reference:
C 18/05/1193 Mr. Matthew
Harley Dear Mr. Harley, I refer to your complaint to the Ombudsman on behalf of the United Portmarnock Residents Opposing Another Runway, a sub committee of the Portmarnock Community Association, in respect of the cost benefit analysis regarding the new East- West parallel runway at Dublin Airport. It is first important to note that Aer Rianta and its successor the Dublin Airport Authority (D.A.A) are outside the legislative remit of the Ombudsman (See Section 4(4) of the Ombudsman Act 1980) and in this regard she sought and received a report on the matter from the Department of Transport. The Report states that the D.A.A(formerly Aer Rianta) has statutory responsibility under the Air Navigation and Transport (Amendment) Act 1998 and the State Airports Act 2004 to own, manage, operate and develope Dublin Airport and to provide such facilities and services as it considers necessary for aircraft and passengers. It also says that there is no obligation on the D.A.A. to seek Ministerial approval for its capital expenditure programmes/projects. In this the position of the D.A.A differs from the statutory position governing some other commercial semi State bodies which do require Ministerial approval for proposed capital investments e.g. the E.S.B. (Section 2 of the Electricity (Supply)(Amendment) Act 1982 and Bord Gais Eireann (Section 21 of the Gas Act 1976). It goes on to say that D.A.A. applied to Fingal County Council for planning permission for the new runway at Dublin Airport in December 2004. The Guidelines for the Appraisal and Management of Capital Expenditure projects applied at the time (New updated Guidelines were issued by the Department of Finance in February 2005). The purpose of the Guidelines is to assist public sector managers in evaluating and managing capital expenditure projects. In the case of capital projects at Dublin Airport, the sponsoring agency is the management of the D.A.A. and the sanctioning authority is the Board of the Company. It is a matter for the D.A.A to satisfy itself in relation to expenditure on capital projects and this is recognised in the Department of Finance Guidelines. In accordance with Section 8 of the "Code of Practice for the Governance of State Bodies" (Department of Finance, 2001), the Chairman of the D.A.A., in his confidential report to the Minister in respect of 2004 confirmed that the capital appraisal and management processes in the company reflect the guidelines of the Department of Finance. Subject to such confirmation, it is a matter for the D.A.A. to decide on the investment needs of Dublin Airport and to apply the appropriate appraisal methodology to major projects. The Department of Transport is not in possession of D.A.A.'s analyses of capital projects including that in relation to the proposed runway project. However, while the Department of Transport does not have any statutory role in approving D.A.A. 's capital expenditure proposals, the report points out that the aeronautical charges which the D.A.A. may levy at Dublin Airport are subject to a a cap as determined by the Commisssion for Aviation Regulation (C.A.R.) in accordance with the provisions of the Aviation Regulation Act 2001 (as amended by Part 3 of the State Airports Act 2004). The C.A.R. made its first determination of the maximum level of airport charges at the three state airports in August 2001 and it finalised a new determination for Dublin Airport on 29 September 2005. In determining airport charge caps, the C.A.R. subjects D.A.A.'s projects revenues and costs, including proposed capital expenditure, to rigorous analysis and scrutiny. The Report also states by way of background that the plans for the proposed second parallel runway at Dublin Airport are not new and they pre-date the Department of Finance 1994 Guidelines by over 20 years. The former Aer Rianta began acquiring the lands necessary for the runway in the late 1960s and as far back as 1972, the then Dublin County Council included the proposed new runway in the County Development Plan. Over the past 40 years, the planning authorities have had regard to the plans for the new runway and have ensured that little development has taken place within close proximity to the airport. The Report further states that while the D.A.A. is, of course, expected to comply with the Department of Finance Guidelines, they must also have regard to the long history of planning and preparation for this particular project and apply the Guidelines in a sensible and pragmatic manner. The Report says it would be totally incorrect to suggest that the airport authority was starting with a 'blank sheet' in the years immediately prior to submission of its planning application for the new runway. The Report says that having regard to the anticipated growth in Irish aviation and to the long history of planning for this runway project, the Minister for Transport has confirmed to U.P.R.O.A.R. that he has no proposals to commission any study of alternative options for the provision of airport capacity to serve the Greater Dublin Area; subject to planning permission, it is envisaged that the D.A.A. will provide such capacity through the expansion of existing facilities and infrastructure at Dublin Airport. Finally in response to a specific question from the Ombudsman the report states that the Department does not propose to seek the D.A.A.'s Cost Benefit Analyis in respect of the proposed runway project nor does it propose to carry out a seperate analysis of this project. The Department provided the Ombudsman with a copy of Minister Cullen's reply of 6 October 2005 to a Parliamentary Question on the matter for her information (copy is enclosed). The
Ombudsman's Position Yours sincerely, |
