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Declan Soars as DAA Crashes

Posted on: June 27th, 2010

PIGS were flying high over Dublin Airport last Wednesday. Porkies were being peddled by the bucketful.

Pilots on the piggy planes were looking down from on high, fleeing from the white elephant being paraded miles below, where a public relations coup was being plotted.

The Dublin Airport Authority (DAA) was doing what it does best: pulling a quick stroke to mask the disastrous financial future facing the State’s airports.

TV3 and RTE had been offered a first-ever shot of the spick and span, sparkling monstrosity that has been hovering over the third world airport for years. Obligingly, they wheeled out the cameras.

Accompanying the special viewing of the empty terminal was a press release announcing 500 jobs at Terminal Two. So the white elephant will be occupied by workers, even if the airlines are not interested.

Spinning is all about timing. Both television stations swallowed the bait. Crews headed for the airport. None seemed to spot the pigs flying overhead.

The squads from RTE and TV3 took plenty of footage. The DAA’s spinners achieved their desperately needed news story.

As if by pure coincidence, at 3.45pm that very afternoon, the DAA’s top brass were due before the Oireachtas Committee on Transport as witnesses about the woeful state of the airport authority.

A grilling before the committee was the last thing the DAA spinners wanted the public to see on Wednesday. So they pulled the public relations stunt. There it was, all over both channels’ news bulletins: the tale of how the mighty DAA had created 500 jobs in Terminal Two. A brilliant smokescreen, smothering the alternative tale of the DAA going on in the vaults of Leinster House.

Chief executive Declan Collier strutted into the committee room with a couple of cohorts, happy that the only DAA story likely to surface that day was the favourable footage already back in the newsrooms — in good time for the evening bulletins.

He made a banal opening statement about the wonderful world of the DAA.

Then he faced questions from Oireachtas members.

Collier’s replies were lifted straight out of the Alan Dukes school of arrogance. He must have been watching the chairman of Anglo’s refusal to answer questions a week earlier. The two guys have plenty in common. Both are “public interest” directors of diseased banks. Declan is a state appointee to AIB. Alan is chairman of Anglo.

Both are well connected and vastly overpaid. Declan nets just short of €600,000 from the two state gigs. Alan only pockets €250,000 (€100,000 as a ministerial pension and €150,000 from Anglo).

Both “public interest” directors know how to brandish two fingers at the public.

As a member of that committee, I kicked off. I had an initial skirmish with DAA financial officer Ray Gray about the extraordinary fees paid to auditors KPMG for “other services”. KPMG had received more than €1m for non-audit services while trousering €806,000 for the DAA audits over a two-year period.

Such a huge figure earned by KPMG in the non-audit bracket raises questions about the audit itself being compromised. Ray Gray muttered about “other services” being for taxation, but was hopelessly vague. Instead, he promised to provide fuller information later.

Frustrated, I turned to Declan.

Declan is on a gravy train. Last year he enjoyed nearly €30,000 from AIB plus a DAA package of €568,000. This included a surprise performance bonus of €51,000 — in a year that the DAA turned a profit of €47m into a loss of €13m.

I asked Declan how he could merit a performance bonus of a grand a week when the state monopoly was in the red. Declan pleaded that there were other criteria besides profit. When asked what they were, he limped into the language of “strategic objectives, etc”. When pressed on the matter, he refused point blank to be more specific.

I still have no idea why Declan gets a bonus in a losing year; but I know the taxpayer is entitled to answers. In both Alan and Declan’s case, the taxpayer is being treated with contempt.

A later question revealed that Ray Gray had also received a bonus. But Ray had caught the omerta bug from Alan and Declan, refusing to state the amount of his bonus.

Ray is the guy in charge of the scary DAA gross debt of €1.25bn. A few months ago, DAA debt was downgraded from A- to BBB+, making interest payments more expensive. Not to worry. Gray still gets his bonus.

When committee chairman Paul Connaughton asked Collier how many other favoured DAA staff received bonuses, he initially refused to say. Connaughton, a far more persuasive questioner than I, eventually forced Declan to admit that it was about 100.

An unsavoury picture is surfacing. Out at the DAA the top man gets a 50 grand bonus while the company loses millions; the finance officer receives a bonus even though the debt has been downgraded by Standard & Poors; and about 100 hand-picked staff receive similar rewards.

A less-than-charitable thought occurred to me. Is Declan given a bonus for cost reductions? Could it be that his bonus depends on reducing the pay of the other staff — the ones who did not receive bonuses?

Perhaps. Last year Declan and his lieutenants gained agreement on a plan that the annual report boasts includes “wage reductions for all staff earning more than €30,000 a year and a voluntary severance programme . . .”

So the happy hundred are being given bonuses while others suffer pay cuts.

No wonder Declan and Ray refused to answer questions.

Declan escaped probing challenges about the white elephant because the Fianna Fail TDs used their slots on the committee to lob soft local queries to the banker-cum semi-state boss.

Listening to Declan, the pigs flying over the airport must have wondered if they would be in the air forever.

The pigs know the score about the white elephant.

The white elephant is stillborn. T2 was built for Celtic Tiger traveller numbers. The DAA is caught in a deadly cycle.

In the boom years, Dublin Airport was dangerously overcrowded. The politically-driven DAA was unprepared for the expansion of Ryanair and soaring passenger numbers. Indeed, its obsessive hate for Michael O’Leary has clouded its judgement.

When the boom ended, it was still building a massive second terminal with borrowed money on the assumption that passenger numbers would rocket for decades.

Someone should tell them that the Tiger is dead, that passenger numbers are tanking and that they will go broke unless they call a halt to this folly. The nightmare of unwanted properties around Ireland could soon be mirrored in the airport’s flagship building.

Michael O’Leary, the biggest customer of the airport, has told them that he will not use the terminal. On Friday, Aer Lingus skilfully took advantage of the DAA’s chronic weakness to land a peach of a deal in Terminal Two.

The DAA’s response to its dilemma was to create a new position for DAA insider Bob Hilliard. Bob is filling a suddenly created post of “chief operations officer”. No doubt he is due a performance bonus for completion of Terminal Two — a year late.

It is difficult to know why Bob is necessary, but presumably he will be useful to the DAA at those times when Declan is absent down at AIB board meetings, pocketing his second income from the State.

If the DAA continues to flounder, Declan may find himself grateful for the AIB gig.

The pigs will be in the air for months. Then they will crashland with a thud.