The Dublin Airport Authority (DAA) has approved contracts to the value of €200 million for the construction of a second passenger terminal at the capital's airport, writes Ciarán Hancock, Business Affairs Correspondent.

DAA chief executive Declan Collier said the authority hoped to begin initial site work for Terminal 2 (T2) in the first week of October, subject to agreement with the relevant statutory authorities, including Fingal County Council.

Planning approval for T2 and a second runway was granted by An Bord Pleanála last month with a long list of conditions.

Ryanair, Dublin airport's biggest user, has said it will seek a judicial review of the board's decision. Ryanair said the decision was politically motivated and has criticised the cost of T2.

The DAA, however, plans to press ahead with the construction of the second terminal. It is not clear if Ryanair will seek an injunction to prevent this.

"With the best interests of all of Dublin airport's customers in mind, the board hopes the construction timeline for T2 and related facilities is not subject to vexatious legal challenges and the threat of further unnecessary delays," DAA chairman Gary McGann said yesterday.

The DAA said the contracts covered the terminal's substructure, superstructure, steelwork, exterior walls and roof.

The second terminal is part of a €2 billion upgrade of Dublin airport aimed at increasing the airport's capacity to 32 million passengers a year when it opens in April 2010.

At today's prices, the building is set to cost €395 million, but the bill increases to about €610 million when related facilities are factored in.