Minister’s T2 Decision Sets DAA Challenge

The Dublin Airport Authority (DAA) notes the decision by the Minister for Transport, Noel Dempsey T.D. to conclude the public tender competition for the operation of certain aspects of Terminal Two at Dublin Airport.

Following the ending of the tender process, the Minister has asked the DAA to demonstrate that it can operate T2 within the benchmark costs for operating the new terminal that were stipulated by the Commission for Aviation Regulation (CAR) last year.

Minister Dempsey has given the DAA three months to confirm that it can meet the cost parameters specified by CAR; otherwise “alternative arrangements” for the operation of T2 will have to be made.
The DAA 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 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.”

For further information contact:
Paul O’Kane,
Tel 353 1 8141897, 353 86 6090221

Note to Editors:

The Tender Process

The public tender process for a facilities management company to handle cleaning, maintenance and security screening at T2 was run on behalf of the Department of Transport by an independent consortium comprising Goodbody Corporate Finance, Matheson Ormsby Prentice and Mott MacDonald.

Under the system devised by the consortium, the tender process was to have sought bids from third parties while the DAA would have separately submitted a benchmark price for the services in question. The consortium would have then compared the best bid from the tender process to the DAA benchmark and would have selected whichever option offered the best value for money.

Terminal Two
T2, the new passenger terminal at Dublin Airport, will open in November 2010. The new terminal will offer improved facilities and extra space for passengers. The cost of the new terminal is €395m, while the cost of the overall T2 project, which includes a new boarding gate facility, new aircraft parking stands, a new energy centre and an upgrade of the airport’s campus road network, is €609m.

DAA’s Operating Costs
A study of 12 comparable European airports by Indecon Jacobs on behalf of the aviation regulator CAR concluded that in 2008, Dublin Airport had the second lowest operating cost per passenger. Costs at Dublin Airport were 20-25% lower than the average cost. The other airports in the study were: Athens, Birmingham, Brussels, Copenhagen, Geneva, London Gatwick, Manchester, Oslo, Prague, Vienna, and Zurich.