MINISTER for Finance Michael Noonan expects “full and early discussions” with staff at Shannon Airport and Shannon Development on the implications of the Government’s new direction for the airport.
Under radical plans announced last week, Shannon Development is to be broken up. Land assets around the airport are to be merged with Shannon into an independent, state-owned entity which will run the airport with a commercial mandate. This new organisation will also be responsible for developing ancillary aviation industry on Shannon Development owned lands. Other staff at the agency, which employs 110, are expected to transfer to the IDA, Enterprise Ireland and Failte Ireland.
Also facing restructuring are over 200 staff at Shannon Airport after the consultants who reported to Transport Minister Leo Varadkar warned its cost base was too high.
Minister Varadkar has said there will be no compulsory redundancies at either agency and Minister Noonan has said negotiations with staff will be one of the first tasks of the steering group being set up to work out the finer details of securing Shannon’s future.
“The cost base is one of the key factors in Shannon and the number of people working in the two agencies contribute to cost base but nothing is decided,” Minister Noonan told the Leader.
He expects the steering group to have “full and early discussions with the staff in both organisations”.
Requests to interview Shannon Development chief executive Dr Vincent Cunnane were declined but a spokesperson said the company was “taking time to reflect” on the impact of the shake-up on its staff and client companies.
Industrial rents from the Shannon Free Zone have been proposed by Minister Varadkar as a new revenue stream for developing the airport. But some sources have expressed scepticism that this proposal is not the bonanza it might first seem when parts of the Free Zone are “outdated” and the industrial estate requires investment.
Shannon Development had rent revenues of over €13 million in 2010 but the company declined to say how much of this related to the Free Zone for reasons of “commercial sensitivity”.
Minister Noonan commented: “Shannon Development for a number of years were not getting any money from the taxpayer and were running their operation on the basis of rent collected but, of course, rents have fallen off so they are no longer self-sufficient in that sense. But they are bringing a rent book to the table.”
On whether attracting the world-class aviation industry proposed by Government would require investment, the finance minister added: “If it’s going to be the base for world aeronautical industry, decisions about plant and so on will be made by the potential investors and the new promoters of the airport”.
But attracting this new industry would require tax incentives and Minister Noonan said work would begin promptly on changes in tax legislation.
“On the lead-in time, I would envisage doing this in the next budget, in the next finance bill”.
Shannon’s new future, Minister Noonan said, would be one “unencumbered” by historic debts of €100 million.
“The actual mechanism will be up for discussion but you can take it that Shannon will not have a debt burden to carry.”