O'Leary sees red over 'white elephant'; mobile mast dispute goes to arbitration; shape of things to come for Blue Cube; sporting Lions in the dock
O'Leary invective blows off-course
THERE WAS a time when Michael O’Leary would slag off all and sundry in the aviation/transport sector here and everyone would duck for cover, hoping the storm would pass without too much collateral damage.
Not anymore it seems.
Yesterday, in Dublin’s Alexander Hotel, O’Leary used an announcement about cuts to Ryanair’s winter schedule from Dublin as an opportunity to launch a broadside against the Dublin Airport Authority (DAA), Minister for Transport Noel Dempsey, aviation regulator Cathal Guiomard and the “incompetent” Government for its “insanely stupid” €10 travel tax.
O’Leary had a rant about the cost of Terminal 2, which he described as a “white elephant”.
He described Aer Lingus’s decision to become the anchor tenant as a “sweetheart deal” with the DAA. “Is there a lot of sweetheart deals going on between DAA and Aer Lingus?
“Yes, of course there is. They are both controlled by the Department of Transport. They both exist to make sure the Minister isn’t embarrassed by a second empty terminal. This is all about covering over Noel Dempsey’s mismanagement of transport here for years.”
Ouch.
Dempsey didn’t take it lying down. “Anything he says should be taken with a grain of salt. As was recently stated in the High Court, ‘the truth and Ryanair are uncomfortable bed fellows’.”
This was a reference to Justice Peter Kelly eliciting an apology from O’Leary recently for misrepresenting him in a letter to Noel Dempsey.
The DAA also came out fighting in relation to Ryanair’s claim that T2 was costing €1.2 billion.
“Ryanair also continues to lie, again not for the first time, about the cost of Terminal 2,” it said. “The overall T2 project, which includes the new passenger terminal, the new boarding gate facility known as Pier E, a new energy centre, new aircraft parking stands and a major upgrade of Dublin airport’s internal road network, is costing just over €600 million.”
O’Leary probably edged the verbal fight on points but his opponents are starting to land some good blows.
Shared Access at odds with OPW
THE STANDOFF between US telecoms equipment company Shared Access and the Office of Public Works over a contract to erect masts at Garda stations around Ireland is set to go to arbitration.
Shared Access chief executive Chris Jackman told me this week that an arbitration hearing will be heard in September to see if a resolution to the matter can be found.
But he wasn’t exactly exuding confidence that a compromise could be reached.
To recap, Shared Access, which is backed by Goldman Sachs and JP Morgan, is considering pulling the plug on a €50 million investment in Ireland due to delays by the Office of Public Works (OPW) in fulfilling a contract signed two years ago.
Shared Access was to fit masts and other equipment at 375 Garda stations that could be leased to mobile phone and other telecoms operators.
It would then manage the network of stations, with revenues shared with the OPW.
So far only a handful of stations have been fitted out and Shared Access has become frustrated at a lack of progress.
The OPW countered by saying the final decision on sites rests with An Garda Síochána for operational reasons.
It also said the contract does not cover providing broadband on the masts, a point that Jackman finds bizarre.
“Broadband is just one service defined for 3G, which all of the mobile operators are licensed for.”
It does seem a strange position for a public body to take given the Government’s commitment to the so-called smart economy, of which broadband is a key component.
"I've never been in this position before in my life," Jackman told The Irish Times. "It's absolutely unexplainable."
ILP's Blue Cube Personal Loans posts €2.2m loss for 2009
ACCOUNTS JUST filed for Blue Cube Personal Loans, the phone and internet- based lender owned by Irish Life & Permanent, show that it made a loss of €2.2 million in 2009.
“In 2010, the company does not intend to transact any further new business unless the market improves,” the directors’ report notes.
Blue Cube’s provisions for bad debts last year amounted to €3.9 million. While small in the context of the losses racked up by our big banks, it’s significant given that its loan book at the start of the year was €18.6 million.
Blue Cube closed 2009 with net liabilities of €4.6 million. Its status as a going concern is dependent on the “continued pledged support” of IL&P.
Blue Cube was launched in 2007 as banks here literally threw money at people to gain market share. At its launch, Blue Cube boasted that it would remove the bureaucracy that traditionally went with applications for even small personal loans.
“Our computer systems are set up to make speedy decisions – typically in minutes,” the lender’s chief Susie Thornton said at the time. “We believe that applying for a relatively small personal loan should be made as easy and hassle free as possible and Bluecubeloans will achieve this.”
Sadly, many of those customers had poor credit histories and were credit crunched. IL&P must now be regretting ever getting involved in the venture.
Losing Lions still manage profitable year
LAST YEAR’S British and Irish Lions rugby tour to South Africa, led by Munster’s Paul O’Connell (right), might have been a disaster on the field but it appears to have generated a tidy windfall for its shareholders, which include the Irish Rugby Football Union.
Abridged accounts for Dublin- based British Lions Ltd show that its accumulated profits rose to £1.35 million in the 12 months to the end of September 2009 from £316,311 a year earlier.
In addition, £6 million in “cost compensation and donations” was paid to the rugby unions in England, Scotland, Ireland and Wales.
Just over £1.48 million was owed to creditors within one year while £825,439 was due from debtors.
The Lions are paying €179,945 a year in rent to the RDS for offices on Simmonscourt Road, Ballsbridge.
LITTLE THINGS
FIGURES RELEASED on Wednesday by the energy regulator show that the Big Switch is very much on in the retail electricity market, with Bord Gáis and Airtricity neck and neck in poaching customers from ESB through cheaper pricing.
Between January 4th and June 27th, Bord Gáis acquired 82,317 customers while Airtricity bagged 82,067.
At the end of 2009, Bord Gáis had a 17 per cent share of the domestic electricity market – helped by an expensive TV advertising campaign fronted by Lucy Kennedy – while Airtricity had taken 6 per cent of the market.
This week’s figures indicate that Airtricity is upping the ante.
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AS HIS recent appearance before the Oireachtas Finance Committee will attest, Anglo’s new chief financial officer Maarten van Eden has a way with words.
The straight-talking Dutchman has developed a reputation for using idioms in internal meetings when discussing the complexities facing the State-owned lender.
During one discussion, van Eden was overheard saying: “You cannot pluck a naked chicken” – possibly the Dutch version of not being able to get blood out of a stone.
Was this a reference to getting more cash from the Government or to its pursuit of Seán FitzPatrick for repayment of his loans?
