DERRY CITY COUNCIL PROGRESSES WITH GOVERNANCE REFORM AT CITY OF DERRY AIRPORT

09 October 2009

PRESS INFORMATION
FRIDAY 09TH OCTOBER 1.00PM
DERRY CITY COUNCIL PROGRESSES WITH GOVERNANCE REFORM AT CITY OF DERRY AIRPORT

Derry City Council has today confirmed its next steps in governance reform at City of Derry Airport. The reform programme recommends the adoption of a holding company structure for City of Derry Airport, 100% owned by Derry City Council, and the commencement of a formal "Market Test" seeking expressions of interest for private investment. Chairman of City of Derry Airport Committee, Cllr Colum Eastwood explaining the governance reform programme said:

"Reform is driven by our commitment to reduce annual public subvention of £3.5million, a need to strengthen the airport''s commercial performance and a requirement by government to establish a new governance regime.

"The airport business plan demonstrates the capability for long-term revenue and passenger growth and we must make decisions that enable the airport to operate effectively in a very competitive environment. However, the continuation of public subsidy at its current level is unsustainable and it is essential that Council progress steps to reduce this level of subvention. Our aim is to ensure the region has an affordable and successful airport and this sequence of reform will safeguard investment and growth".

Derry City Council has operated City of Derry Airport for thirty years and has established it as a vital piece of local infrastructure that supports employment and underpins economic activity in tourism and investment. The newly adopted company structure will see Derry City Council owning a 100% shareholding in CODA (Holdings) Ltd. This company will own two subsidiary companies, CODA (Operations) Ltd and CODA (Property) Ltd that will, respectively, operate the business that is City of Derry Airport and hold the lands and facilities that constitute the physical infrastructure of the airport. Airport Licensee, John Meehan continued:

"The Council has created a company structure that helps retain maximum flexibility for commercial and investment decisions. The companies activities will be supported by a board membership from the public and private sector with a public recruitment process commencing in November 2009. The final phase of the governance reform process will be a "Market Test". This is a formal public procurement exercise that will seek submissions that will result in private investment in City of Derry Airport. It aims to establish a commercial partnership that can meet the continuous financial commitments arising from business planning projections and capital investment requirements".

It is expected the company structure will be established immediately and operate in shadow form from December 2009. While the formal Market Test will commence in October 2009 it will be early 2010 before Derry City Council will consider any proposals that may emerge.

Ends

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