The Commission for Aviation Regulation has published a valuation of land associated with the proposed Dublin Airport City development project and a guidance paper on how the CAR is minded to treat this project in future Dublin Airport price cap determinations.
The document provides parties with guidance on the regulatory treatment at the time of the next Determination in 2019 should DAA proceed with Dublin Airport City. In doing so, it fulfils a commitment made in the CAR’s 2014 Determination on airport charges.
DAA plans to develop extensive office accommodation on almost 28 hectares (70 acres) of land adjacent to the terminals at Dublin Airport, a project known as Dublin Airport City. The development costs could be of the magnitude of €1 billion. To put this in context, the 2015 opening regulatory asset base (RAB) for Dublin Airport is €1.6 billion.
The CAR paper says: “To date, the representations from users at Dublin Airport suggest that they would like to be protected from the risk associated with such a development. DAA have put forward a proposal to move the land and assets associated with this project from the regulated entity to the non-regulated part of DAA, hence transferring the risk from users to DAA’s shareholder.
“To date DAA has spent about €45 million acquiring leasehold interests on lands and buildings associated with Dublin Airport City. None of this expenditure has been included in RAB calculations.”