[Article] DAA announces airport city plan

Victor

What is it about mega projects this week?

http://www.rte.ie/business/2008/0425/airport.html

DAA announces airport city plan
Friday, 25 April 2008 14:41

The Dublin Airport Authority has announced plans for what it describes as a new city to be built near the existing terminal complex.

The DAA wants to build a €4 billion development over 350 acres to the east of the airport comprising mainly office space.

There is no planning permission for the development, and funding has yet to be arranged.

AdvertisementBut the DAA says it fits in with development plans of Fingal County Council. It says this would become an economic hub targeting foreign direct investment.

Infrastructure would be put in place to enable executives based at the Dublin Airport City to get from their desks to airport check-in an average of six minutes.

They say it would mean 600,000 square feet of office space, along with retail and hotel facilities and an aviation college.

Although it could take 20 years to build, the authority claims it could add €1 billion a year to the Irish economy.

Mr Magnolia

Heard about it on Matt Cooper this evening. Sounds like it has great potential if it can get planning permission and funding.

BendiBus

What's the difference between an "Airport City" and a bog standard business park?

Victor

BendiBus wrote: »

What's the difference between an "Airport City" and a bog standard business park?

14 stories.

serfboard

More un-balanced regional development by a crowd who objected to everything that was planned for around Dublin airport - except for when they are building it.

Schuhart

serfboard wrote: »

More un-balanced regional development by a crowd who objected to everything that was planned for around Dublin airport - except for when they are building it.

I'm sorry but, regardless of whether the DAA plan is a good one (I'm still undecided), your post reeks of begrudgery.

Dublin Airport has grown to its present passenger levels despite being hamstrung and obstructed by the Shannon lobby. Frankly, a growing number of people are impatient at the sort of obstructive attitude of some in the West to necessary development in the East. Its that case of the Irish lobsters not needing a cover on their pot as if one looks like escaping the rest will drag him back.

If there's a commercial opportunity, why shouldn't it be seized? As I understand it, this is a commercial development, which will be financed by private investors attracted in by DAA. If they can make it work, fair play.

serfboard

Schuhart wrote: »

I'm sorry but, regardless of whether the DAA plan is a good one (I'm still undecided), your post reeks of begrudgery.

Guilty as charged, m'lud. On 2 counts actually. The first is a genuine go at the DAA who objected to developments by the likes of the McEvaddys et al on the grounds that it would interfere with the airport. On this point, it's not just me saying that. Yer man on RTE also put that point to the fella from the DAA as well, and he answered rather unconvincingly.

Schuhart wrote: »

Dublin Airport has grown to its present passenger levels despite being hamstrung and obstructed by the Shannon lobby.

If anything it was the other way around. Shannon was managed at one time by Aer Rianta who didn't give 2 fcuks for developing anything at Shannon. When Seamus Brennan broke it up, in stepped Michael O'Leary who rightly argued that, instead of whingeing about the stopover, Shannon should have been seeking to develop more routes of its own. And he has now put his money where his mouth is by doing just that. Contrast this with the attitude of Aer Lingus who moved a money-making route to Belfast, where they have way more competition.

One of the reasons that Dublin grew, by the way, was that people from the West/Midwest/South had to go there to fly anywhere. It's getting better now.

Schuhart wrote: »

Frankly, a growing number of people are impatient at the sort of obstructive attitude of some in the West to necessary development in the East.

Well now, that depends on what you mean by necessary. Speaking as someone who was forced to relocate to Dublin due to lack of opportunities in the West, and working as I did with people who were enduring horrible commutes from Meath, Wicklow, Kildare, Louth, Westmeath, Laois, Carlow and Kilkenny (and that's just off-hand, without really thinking about it), a hope that large-scale developments such as this one would be re-located around the country isn't too much to ask. I, for one, was (naively, I know) all in favour of the Spatial Strategy when it was launched, and disgusted when it was binned more or less the following day when the disastrous de-centralisation policy was introduced, and it transpired that the locations were along the old pork-barrel lines. (And yes, I am opposed to de-centralisation on the grounds that if they want to do this they should be de-centralising power - not moving bits of offices to places where no-one wants to go).

Schuhart wrote: »

As I understand it, this is a commercial development, which will be financed by private investors attracted in by DAA. If they can make it work, fair play.

And of course the DAA are perfectly right, from their point of view, to try and grow their business as much as they can. Whether they would manage it correctly remains to be seen - given how they've (mis) managed growth in Dublin airport thus far.

Schuhart wrote: »

If there's a commercial opportunity, why shouldn't it be seized?

Don't get me wrong - this is good idea. It's just that it does not need to be in Dublin. When you consider the amount of secondary jobs that may be created from this venture both during construction and afterwards this could be a tremendous boost to the likes of, well, for example Shannon. And this development will grow airport traffic - no matter which airport it is beside.

Off-topic and speaking of Shannon, as someone from Galway I always thought that it was a shame to build an airport in Galway. What they should have done years ago, was build a good road from Galway to Shannon. I know that they're doing that now, but it's a but late. Then, at least you could have a bit of critical mass between Limerick and Galway to drive real development in Shannon, this providing more routes out of Shannon and giving people in this part of the world less reason/need to fly from Dublin. (Which I do much more often than I want to).

Schuhart

serfboard wrote: »

Yer man on RTE also put that point to the fella from the DAA as well, and he answered rather unconvincingly.

unfortunately I didn't see the interview, so I just don't know.

serfboard wrote: »

If anything it was the other way around. Shannon was managed at one time by Aer Rianta who didn't give 2 fcuks for developing anything at Shannon.

I'm sorry, but just no, it wasn't the other way around and Dublin is still hampered by its runway being kept too short in th evain hope that this would make business flock to Shannon.

serfboard wrote: »

When Seamus Brennan broke it up, in stepped Michael O'Leary who rightly argued that, instead of whingeing about the stopover, Shannon should have been seeking to develop more routes of its own. And he has now put his money where his mouth is by doing just that. Contrast this with the attitude of Aer Lingus who moved a money-making route to Belfast, where they have way more competition.

I actually don't follow the point here..

serfboard wrote: »

One of the reasons that Dublin grew, by the way, was that people from the West/Midwest/South had to go there to fly anywhere.

That's one way of putting it. Another is that there are too many regional airports which really just prevent each other from gaining economies of scale. But, because Dublin has that scale, they find it supports a wider range of desitination.

serfboard wrote:

Well now, that depends on what you mean by necessary. Speaking as someone who was forced to relocate to Dublin due to lack of opportunities in the West, and working as I did with people who were enduring horrible commutes from Meath, Wicklow, Kildare, Louth, Westmeath, Laois, Carlow and Kilkenny (and that's just off-hand, without really thinking about it), a hope that large-scale developments such as this one would be re-located around the country isn't too much to ask.

Well, yes it is too much to ask as the kind of development envisaged is one that needs a reasonably sized city to support it. This is a commercial development, it will either be where it is or it will not be done at all.

serfboard wrote:

I, for one, was (naively, I know) all in favour of the Spatial Strategy when it was launched,

Indeed, we all like to see meaningful regional development. The main block to it is the lack of political commitment within the regions to actions that would actually support that.

Incidently, obstructing development in the East doesn't create development in the West. It just makes for a poorer country, as we found for decades.

serfboard wrote:

And of course the DAA are perfectly right, from their point of view, to try and grow their business as much as they can. Whether they would manage it correctly remains to be seen - given how they've (mis) managed growth in Dublin airport thus far.

In fairness, the DAA are hardly responsible for the failure to invest in facilities to cope with the growth in demand. It was political dithering that did that.

serfboard wrote:

Don't get me wrong - this is good idea. It's just that it does not need to be in Dublin. When you consider the amount of secondary jobs that may be created from this venture both during construction and afterwards this could be a tremendous boost to the likes of, well, for example Shannon. And this development will grow airport traffic - no matter which airport it is beside.

I'm sorry, but you are just wrong. Whats planned, if it is to hold water, requires a major airport. Through some magic, Dublin has managed to grow itself into being the 14 largest international passenger airport. That's the asset that makes the project commercially viable. Shannon just isnt in the same league, or even close, which means it simply isnt a suitable location for this project - which, remember, is a commercial venture that needs to turn a profit.

Can I also suggest that any rational small country would be delighted if it managed to get an international passenger airport into the global top twenty and would similarly see this as an opportunity to be seized. But, of course, we have to put up with this winge about 'why can't it be in Shannon?' The answer is nothing is stopping the SAA doing something similar. I mean, ffs, Shannon and the Mid West generally has received lavish State support.

Whats objectionable is the efforts to obstruct and hamstring the East; as if the West can't bear the sight of some other part of Ireland having a life.

Victor

I wonder if Dublin-Derry is international and New York-Hawaii is domestic.

Schuhart

Victor wrote: »

I wonder if Dublin-Derry is international and New York-Hawaii is domestic.

The short answer is yes - and, indeed, JFK would serve far more passengers than Dublin when domestic flights within US are included. However, I'd suggest the 14th ranking is still significant, when you consider the locations where similarly its likely that there would be no significant domestic traffic.

And, I think, a key point is we invested a squadload of money trying to make this happen at Shannon, while frustrating it happening in Dublin. Shannon simply failed; despite having the Shannon Develop,ent agency and a load of resources. I'm a little worried at the reluctance by so,e to acknowlege this or even act as if it never happened.

MLM

I find it interesting that the DAA launches a 4 billion euro project only a few weeks after being unable to find a mere 113 million euro to clear the Cork Airport debt. Both Shannon and Cork could support a project of this size, but then neither Shannon or Cork have the political clout of Bertie Ahern, who played a key role in putting together the DAA project.

Schuhart

MLM wrote: »

I find it interesting that the DAA launches a 4 billion euro project only a few weeks after being unable to find a mere 113 million euro to clear the Cork Airport debt.

The 4 billion is a commercial investment. They'll be seeking punters to put money in, in exchange for profit. I somehow doubt that a private investor would react kindly to a proposal along the lines 'can you give me €113 million to clear the debt on an asset that neither of us will get any return from'. And that's assuming we set aside why the Cork Airport debt should be paid for by people landing in Dublin. And, no, the sale of the loss making hotel group isn't particularly relevant, unless you're suggest the CAA will contribute to the historical losses and the restructuring costs at Shannon.

On the same day that it was first announced that Cork would have to carry some of its own debt there was a package of 86 million in State grants announced for the regional airports paid for by the taxpayer (regional airports as in non-former Aer Rianta ones like Knock). That would tear the guts out of the portion of the Cork debt not being covered by DAA - yet this allocation of State funds to airports that carry fewer passenger than Cork and make less contribution to regional development is never commented on. Instead, the linkage is made to the DAA, as if the development of the opportunities of having the 14th largest international passenger airport was something that a small island nation should see as expendible.

Both Shannon and Cork could support a project of this size

Have you any actual basis for this statement? Neither airport operates at anything like the scale of Dublin. Shannon has a longer runway, but its simply not that attractive a destination.

Bear in mind also that Shannon has already been the site for this kind of thing, heavily supported by State incentives (unlike the DAA venture which is a commercial venture).

Shannon Development still exists. What is the explanation for this apparant blindness over Shannon's failure? And the apparant assumption that Dublin just getting on with its life is a bad thing in itself?

Incidently, given that Cork Airport is in a difficult location, the fact that it manages to attract as much business as Shannon suggests that those incentives might have found a more useful home where some permanent benefit might have been achieved.

Victor

About the €113 million - DAA keeps all the money from selling off the foreign investments.

MLM

Schuhart wrote: »

[/URL] Have you any actual basis for this statement? Neither airport operates at anything like the scale of Dublin. Shannon has a longer runway, but its simply not that attractive a destination.

The Shannon Free Zone proves its attractiveness as a destination. If it is not an attractive destination than why have 110 companies decided to locate there? The scale is bigger than what is proposed in Dublin. http://www.shannonireland.com/

Schuhart

Victor wrote: »

About the €113 million - DAA keeps all the money from selling off the foreign investments.

Indeed, and the DAA keeps half of Cork's debt, the inherited losses at GSH, legacy Aer Rianta pensions and debt and restructuring costs at Shannon. Would you expect the CAA to take some of that cost on?

Would you also feel that the future of the airport that serves 75% of air traffic in the State is expendable? Is there no national interest at stake here? Is it acceptable to stuff Dublin from any direction, and to hell with the consequences? And, unlike Cork, there is no prospect of the European Commission approving direct State grant aid for Dublin.

Bear in mind that what caused the problem was the DAA successfully arguing that its balance sheet could not take on the repayment of the Cork debt. I think we can all accept that the political will wanted to stuff Dublin - if it didn't the debt-free promise would never have been made. They simply found it wasn't physically possible.

Which, I'd suggest, is why the focus of interest should be more on the question of direct State aid for Cork. Even intuitively, suggesting the DAA should take on extraneous debt when its airport is so obviously in need of investment is just ludicrous. I feel like I'm labouring an obvious point if I was to go on about how Dublin airport is so obviously both vital to the functioning of the State and capable of bringing even more business to Ireland. But when that reality seems to be passed over so quickly and not even mentioned, it seems to be necessary.

The question (said he, tired at repeating what seems an obvious point) is if we regard a debt free Cork Airport as something that will contribute to regional development in a meaningful way (and I feel it very likely would) why don't we seek EU clearance for a State grant? We've thrown enough mullah at Shannon for no gain, including vandalising Dublin's runway and allowing them to hijack firstly all and then every second transatlantic flight. We throw €86 million at toy regional airports like Knock that do next to nothing. Why not a State grant for Cork?

MLM wrote: »

The Shannon Free Zone proves its attractiveness as a destination. If it is not an attractive destination than why have 110 companies decided to locate there? The scale is bigger than what is proposed in Dublin. http://www.shannonireland.com/

Then what's your problem with this development in Dublin if Shannon already has one? Why the need to gratuitously obstruct Dublin?

Note: You might actually reflect on how the Shannon Free Zone is and was the recipient of considerable State largesse, including at one stage an attractive tax rate. And you might then reflect (as clearly you haven't digested the point) that what the DAA plan is a commercial development - ie not something that gets State grants. IDA no longer give incentive grants to companies establishing in Dublin, and haven't for years.

Victor

I don't think the sate aid argument comes into it - the EU has always said that governments can invest in state companies, but it has to be investment, not subvention covering current loss making.

Schuhart

Victor wrote: »

I don't think the sate aid argument comes into it - the EU has always said that governments can invest in state companies, but it has to be investment, not subvention covering current loss making.

That's also my understanding. The Government could inject 113 million into the CAA as a commercial investment.

The state aid issue only arises if it was felt the injection was more in the nature of a subsidy, which I feel might arise if it was to give CAA 113 million to wipe its debt clean. The EU guidelines for State aid to airports is here.It says

For this reason any measure which may constitute State aid to an airport must be notified so that its impact on competition and trade between Member States can be examined, and, where appropriate, its compatibility.

I would take that to mean that the EU would need to be informed of any capital injection to the CAA. That's not to say that the EU would block any investment or aid. Just that they would ensure that it did not frustrate competition and trade between Member States. Given that Cork would fit into the Category C 'Large Regional Airports' group that the guidelines identify, the case could certainly be made for such an injection. Here is where this was done to clear the grants given to Knock et al (which are category D 'small regional airports').

Dublin, just to be a complete anorak, is deemed a category A or 'Large Community airport', which means it basically cannot expect aid in any form. There are no Category B "national airports" in the State, although Belfast International might shade it into this category.

MLM

Schuhart wrote: »

Indeed, and the DAA keeps half of Cork's debt, the inherited losses at GSH, legacy Aer Rianta pensions and debt and restructuring costs at Shannon. Would you expect the CAA to take some of that cost on?

Would you also feel that the future of the airport that serves 75% of air traffic in the State is expendable? Is there no national interest at stake here? Is it acceptable to stuff Dublin from any direction, and to hell with the consequences? And, unlike Cork, there is no prospect of the European Commission approving direct State grant aid for Dublin.

Bear in mind that what caused the problem was the DAA successfully arguing that its balance sheet could not take on the repayment of the Cork debt. I think we can all accept that the political will wanted to stuff Dublin - if it didn't the debt-free promise would never have been made. They simply found it wasn't physically possible.

Which, I'd suggest, is why the focus of interest should be more on the question of direct State aid for Cork. Even intuitively, suggesting the DAA should take on extraneous debt when its airport is so obviously in need of investment is just ludicrous. I feel like I'm labouring an obvious point if I was to go on about how Dublin airport is so obviously both vital to the functioning of the State and capable of bringing even more business to Ireland. But when that reality seems to be passed over so quickly and not even mentioned, it seems to be necessary.

The question (said he, tired at repeating what seems an obvious point) is if we regard a debt free Cork Airport as something that will contribute to regional development in a meaningful way (and I feel it very likely would) why don't we seek EU clearance for a State grant? We've thrown enough mullah at Shannon for no gain, including vandalising Dublin's runway and allowing them to hijack firstly all and then every second transatlantic flight. We throw €86 million at toy regional airports like Knock that do next to nothing. Why not a State grant for Cork?Then what's your problem with this development in Dublin if Shannon already has one? Why the need to gratuitously obstruct Dublin?

Note: You might actually reflect on how the Shannon Free Zone is and was the recipient of considerable State largesse, including at one stage an attractive tax rate. And you might then reflect (as clearly you haven't digested the point) that what the DAA plan is a commercial development - ie not something that gets State grants. IDA no longer give incentive grants to companies establishing in Dublin, and haven't for years.

No one here wants to "stuff Dublin". We want more balanced regional development. Have you ever considered the fact that running 75% of the country's passenger traffic, through such badly planned airport, might actually be a bad thing? Dublin Airport is a mess and cannot cope with this level of traffic. The infrastructure is not there, will cost billions to put in place, and by the time it is in place will be obsolete; while the congestion will remain. If Dublin were to handle 50% of traffic it could cope better, and be less of a cattle mart, and more business and tourism friendly.

The IDA may not give incentive grants in Dublin anymore. There is a lot gained through incentives in the form of tax breaks. Think IFSC, docklands etc, massive massive spending on infrastrucure.

How do you know the DDA plan won't be getting incentives? Have you evidence to support this? Weren't the government suggesting, in the not too distant past, the establishment of special development zones near our airports?

paulm17781

MLM wrote: »

No one here wants to "stuff Dublin". We want more balanced regional development. Have you ever considered the fact that running 75% of the country's passenger traffic, through such badly planned airport, might actually be a bad thing? Dublin Airport is a mess and cannot cope with this level of traffic. The infrastructure is not there, will cost billions to put in place, and by the time it is in place will be obsolete; while the congestion will remain. If Dublin were to handle 50% of traffic it could cope better, and be less of a cattle mart, and more business and tourism friendly.

Where do you think most commercial travelers want to go? It's not Shannon or Cork.

Schuhart

MLM wrote: »

No one here wants to "stuff Dublin". We want more balanced regional development.

And, indeed, there is no need to stuff Dublin to achieve regional development. However, there is a common misconception, present in this thread in the form of aspirations to ‘relocate’ this development outside Dublin, that hamstringing Dublin is a good way of fostering regional development. So, indeed, some very much do want to continue the failed approach of trying to achieve balanced regional development by stuffing Dublin.

This outlook is doubly ludicrous in this case, where the whole basis of the development is that would be located beside a major international airport beside a significant city handling nearly double the international traffic of, for the sake of argument, Stockholm. Shannon simply cannot offer that, so talk of relocation is meaningless as the factor that makes this a potential runner is lost.

MLM wrote: »

Have you ever considered the fact that running 75% of the country's passenger traffic, through such badly planned airport, might actually be a bad thing?

I agree it is a very bad thing. Clearly the right capacity should have been put in place in Dublin. Have you ever considered that the presence of all this traffic in Dublin is not due to lack of capacity in regional airports? Have you ever considered why all this business keeps turning up despite the lack of capacity in Dublin? Have you ever considered that if this traffic was not coming to Dublin, it would just go to Manchester or some other comparable city, and be lost to Ireland?

For my part, it has never occurred to me that Ireland was better off when we didn’t have the 14th largest international passenger airport. Your apparent suggestion that we should be trying to halve passenger numbers in Dublin is extremely bizarre. I’m honestly at a loss for words as to how to bridge the yawning gap between that incomprehensible outlook and reality.

MLM wrote: »

If Dublin were to handle 50% of traffic it could cope better, and be less of a cattle mart, and more business and tourism friendly.

Consider how meaningless this statement is. If it was more business and tourism friendly, then more people would want to fly there, and passenger numbers would increase. But that’s not particularly what I’m saying. I’m just hoping you are realising there is no meaning to what you just said – that we’d be better off with half the number of travellers, half the number of flights. You are saying that Ireland would be better off without a significant international airport. Just not making sense.

MLM wrote: »

The IDA may not give incentive grants in Dublin anymore. There is a lot gained through incentives in the form of tax breaks. Think IFSC, docklands etc, massive massive spending on infrastrucure.

This seems to be aimed at denial of how little Shannon achieved with the massive resources put at its disposal. The IFSC regime is gone, and our low taxation rates are equally available to all regions. I’m not actually aware of any specific tax breaks for the Docklands, but I’m open to correction. My picture was that the public funding for Docklands was coming from things like the income from the Grand Canal Docks marina, and the rest was coming from commercial investors. But I’m open to reason, supported by links to reliable sources.

Incidently, Shannon’s dirty little secret is hidden on Page 19, Table 13 of this publication. Never mind compulsory Irish, that CSO document should be on the Leaving Cert so that Irish people actually gain some meaningful insight into the country they live in. What you should be looking at is the level of economic value produced compared to share of the labour force. The Mid West region produce 7.5% of national value, with 8.5% of the workforce. In other words, the workforce in the region is not especially productive. This illustrates that the jobs in Shannon (contrary to popular belief) are not high value and that it is not a business cluster of national significance. If you're struggling with these facts, then consider that if its invisible in regional statistics, then its doubly invisible at the national level.(Incidently, I’m just using the CSO release as its readily available. Business and Finance published a more detailed analysis making this point a year or two ago.) Compare that to Dublin, where about 30% of the workforce produce 40% of national value.

In passing note that the South West region similarly has relatively high value employment, illustrating that Cork City has definite potential evidently lacking in Limerick, despite the absence of the kinds of incentives given to the Mid West. I think you should be starting to see where we should be going if we’re serious about development a regional location in the State.

This reflects the simple reality that you need a significant city to support high value employment and no amount of sticking our fingers in our ears and going LAlalalaLALA changes that. There are certain types of development that we will only see happening in Dublin, and we would be insane to turn them away or pretend they can be ‘relocated’ in Shannon.

And consider again the incredible cost for this paltry return in Shannon. We decimated our chances of meaningful transatlantic services, butchered the only airport we have that has shown the capability (as distinct from aspiration) of attracting significant numbers of passengers, handed out expensive grants and tax reliefs ignoring significant needs to invest in national infrastructure – all because we had some insane desire to keep a load of Clare people on the payroll of a redundant overstaffed airport.

MLM wrote: »

How do you know the DDA plan won't be getting incentives? Have you evidence to support this?

Yes, the evidence I posted about state aids in my post immediately proceeding yours. The European Commission would be unlikely to approve any incentives, as Dublin would be expected to be able to stand on its own merits.

That said, you might also consider that, as there are a multitude of propositions that cannot be positively disproven, its more normal for people to expect evidence that something exists, rather than evidence that something doesn’t exist.

Victor

Can we get back on topic please?

Schuhart

Victor wrote: »

Can we get back on topic please?

I don't mean to be cheeky, but I wasn't conscious that I'd left the topic. I'm pointing out that its ludicrous to talk about 'relocating' commerical investment by companies who would like to be beside an airport with lots of flights/destinations to an airport with far, far fewer services.

The constraint on the DAA's plans is really just to what extent we can expect air travel to continue to increase over the coming years, given global concern at both environmental and energy costs. But Shannon is simply an irrelevance in this context.