Today Minister for Transport, Noel Dempsey TD announced his mandate to the Dublin Airport Authority (DAA) to operate Terminal 2 - -T2 -- , while demonstrating that it can do so within a benchmark set by the Commission for Aviation Regulation (CAR). This follows a decision to terminate the facility management procurement process relating to Terminal 2 at Dublin Airport.

Dempsey said: “As Minister, I was keen to pursue the option of a competition for the operation of facility management services in Terminal 2 as a way of achieving efficiencies in the Terminal and across airport operations generally. While every effort was made to design a workable process, unfortunately the market did not respond as hoped. There was no choice but to terminate the procurement process last December. None of the candidates had met the minimum requirements for pre-qualification and I had no option but to terminate the procurement process in the light of the outcome of the pre-qualification phase and my advisers’ general assessment of the process. “

The Minister continued: “The Dublin Airport Charges determination for 2010-2014 made by the Commission for Aviation (CAR) in December last year, has set very specific and stringent operating cost targets for operating an efficient Terminal 2. In my view, the airport charges determination has effectively superseded the procurement process.

At this point (following my advisers’ general assessment of the procurement process) and consultation with my Government colleagues, I do not see any practical alternative but to mandate DAA to operate Terminal 2. In doing so, the DAA will need to demonstrate that it can operateTerminal 2 (T2) within the benchmark set by CAR.”

Dempsey concluded: “I have informed the DAA as follows: 'In view of the provisions of the airport charges determination regarding T2, if DAA is not in a position to confirm that it can operate T2 within the parameters set by CAR, then it would then be necessary to make alternative arrangements for the operation of T2. Accordingly, in view of the above considerations, I would be grateful if you would report back to me within three months on DAA’s capacity to operate T2 satisfactorily with effect from November 2010. I intend to review the position regarding the operation of T2 in advance of the expiry of the 2010-2014 Determination of Airport Charges.'”

The DAA said today it is already an efficient airport operator, as confirmed by a number of independent studies carried out on behalf of CAR in recent years. CAR’s most recent research found that in 2008, total operating costs per passenger at Dublin Airport were the second lowest in a study of 12 comparable European airports and were 20-25% lower than the average operating cost.

“The DAA says it has been set a significant challenge by this decision, as the benchmark costs envisaged by CAR will require a different cost model than that which currently pertains in the existing terminal,” said DAA Chief Executive Declan Collier. “We will now work to try and meet the criteria stipulated by the Minister and are committed to responding to him within the three-month period.”