Airport business case failed fiscal but met economic test

But the Minister felt compelled to bail out the airport with £8.6m in Department of Regional Development (DRD) funding as the business case did meet the grade economically with estimates suggesting it could yield £276m over the next 40 years.

The Minister also said he moved to back City of Derry as the local Council would have had to cut back on essential projects and borrow heavily to finance the airport - driving the District Rate upwards - in the absence of support.

He revealed the financial appraisal’s failure to meet the grade in response to an Assembly Question from Ulster Unionist Party (UUP) MLA Tom Elliott who asked whether a business case has been prepared on his intentions to allocate £8.6 million to airport.

He said Derry City Council had submitted a business case and that this was “prepared in accordance with relevant guidance and was supervised by a Steering Group, involving DRD and DFP officials. It looked at both the financial and economic case for the works.”

The Minister stated: “Although the business case concluded that the financial appraisal did not meet the assessment criteria necessary to justify further public investment in the airport, it estimated the benefits to the economy of the North to be at least £276 million over the next 40 years.

“I am convinced that the wider benefits that the airport will bring, as an economic gateway, outweighs the adverse financial case.

“I have noted also that, if Government grant is not forthcoming, the Council will have to cut back on other projects and seek loan financing, the interest on which will have to be borne as a significant cost on the district rate.

“For these reasons, I have sought and obtained the agreement of my Executive colleagues to issue a direction to my department to pay capital grant towards the cost of these important safety works.”