Council demands urgent release of £2.5m for CoDA London route

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Derry City and Strabane District Council (DC&SDC) is to hold crunch talks with leading civil servants to demand £2.5million in route development funding for City of Derry Airport is urgently released

Top council officers have already met with the head of the civil service in the North, David Sterling, to insist that a pledge of £2.5 million in route support issued by the last Northern Ireland Executive two years ago is honoured.

The matter was raised at Tuesday’s meeting of Council’s Governance and Strategic Planning Committee during, which Independent councillor, Paul Gallagher, asked for an update on the withheld funding, which Mr. Sterling, had indicated in June may not now be forthcoming.

Council Chief Executive, John Kelpie said he met with Mr. Sterling on July 17, during which the Council’s case was robustly put and that both he and Lead Finance Officer, Alfie Dallas, had requested the urgent release of the monies to help fund CoDA’s London route, which is subsidised through a Public Service Obligation (PSO).

Mr. Kelpie said the urgency of the situation was emphasised to Mr. Sterling, who, he said, had been sympathetic to the Council’s position.

Another meeting, which will be attended by both Mr. Sterling and Noel Lavery, the Permanent Secretary at the Department for the Economy, is due to take place in the near future, said Mr. Kelpie.

The matter came to a head after Mr. Sterling wrote to the Council in June claiming that the £2.5m route development funding agreed by the last Executive had been for the support of new routes, rather than existing routes like the one to Stansted, which was operated by Ryanair until March 2017 and is now operated by British Midland Regional Limited.

Mr. Sterling revealed in his June letter that the development of an outline business case for further potential route development from Derry had been grounded by the collapse of power-sharing at Stormont in January 2017.

Earlier, Mr. Kelpie wrote to Mr. Sterling on behalf of the Council advising him that the withdrawal of the Ryanair Stansted service in May 2017 had placed the airport at “significant risk of closure.”

He wrote that it was “critical that the £2.5m route development funding is made available to CoDA by August 2018 and the sustainability to ensure the continuity of the London PSO route of the airport beyond May 2019”.

Mr. Kelpie explained that BMI was receiving £2.1m a year in public funding over two years to run the Stansted route under the PSO.

Twelve per cent of this was being provided by the Council and 88 per cent by the Department for Transport (DfT) in London.

However, after May 2019 it’s expected that DfT support for the Derry to London link will reduce from 88 per cent to 50 per cent of the net service cost. This will lead to a substantial increase in the level of subsidy required from DC&SDC.