Vienna Airport – ACA detects weaknesses

Today, the Austrian Court of Audit (ACA) published its reports "Vienna Airport – Maintenance" as well as "Vienna Airport – Reconstruction and Extension of Terminal 3", although the ACA refrains from issuing recommendations to the Vienna Airport. Instead, it has identified several approaches that could provide solutions to address the weaknesses detected.

The background to this is the following: The Austrian Constitutional Court ruled that the Vienna Airport had ceased to fall within the ACA’s audit remit as of 1 June 2017. Since then, the ACA has not had the mandate to assess whether the company is acting economically, efficiently and effectively. The reports published today therefore have only limited informational value: numerous issues could neither be assessed nor evaluated. The ACA underlines that critical infrastructures, such as airports, are of strategic interest for the state and the public in general. Once again, it calls for expanded audit rights. In concrete, the ACA wishes to audit public companies in which the state holds 25 per cent or more.

Vienna Airport refused the audit

By arguing that the state does not have any control over the Vienna Airport, the latter refused to be audited by the ACA. The ACA therefore asked the Austrian Constitutional Court for clarification. This was done based on the fact that the ACA’s constitutional task is to audit the entire state economy and the ACA’s opinion that such a control by the state was in fact in place. The Austrian Constitutional Court ruled, among others due to the composition of the supervisory committee, that the state had de facto exercised control over the Vienna Airport only until 31 May 2017. As a consequence of this ruling, the Vienna Airport has ceased to be an audit subject since 31 May 2017.

Need for a clear audit remit

Critical infrastructures, such as an airport, are of strategic interest for the state and the public in general. The ACA advocates for the extension of its audit remit, namely a clear audit competence for companies in which the state holds a share of 25 per cent and more. As regards the draft bill that was recently prepared by the Federal Government for the implementation of the oversight and transparency package, the ACA also believes that the provision according to which its audit remit shall be limited to not listed enterprises should be reconsidered.  

Vienna Airport – maintenance: damage due to irregularities

In the audited period (2012 to end-May 2017), numerous irregularities occurred at the Vienna Airport Infrastruktur Maintenance GmbH. Contract staff, for example, was employed at inflated prices. At least one temporary employment business – owned by the son of a senior employee – had charged twice for services. Further malversations resulted from copper theft, the withholding of sales proceeds and the fact that a former managing director and a former authorized signatory had used employees and temporary staff for works in private homes during their working hours. The final amount of damages and the amount of compensation payments had not been determined by the end of the audit. The legal proceedings had not yet been concluded.

The ACA suggests the following to address these weaknesses: In order to ensure that the executives demonstrate a compliant behaviour, and to thereby strengthen their exemplary role, the responsible stakeholders should endeavour to increase awareness-raising measures and to carry out regular trainings. In their report “Vienna Airport – Maintenance”, the auditors also highlight the low proportion of women: in the organizational entities that were responsible for maintenance, the percentage of women decreased in the period of 2012 to May 2017. Most recently it was at 3.1 per cent; across the group at 21 per cent. 

Vienna Airport – reconstruction and extension of Terminal 3

In its second report “Vienna Airport – Reconstruction and Extension of Terminal 3”, the ACA audited restructuring projects and the extension of Terminal 3, formerly known as “Skylink”. The audit covered the period from 2012 to end-May 2017 – at the responsible Federal Ministry for Mobility even the period until May 2020.  

For its project regarding the south extension of Terminal 3, the Vienna Airport estimated the overall costs at EUR 301.70 million. However, some items were either not taken into account or were underestimated. The estimate, for example, did not feature the costs for the projects necessary for commissioning the terminal. Furthermore, a comprehensive estimate of all costs incurred for the operation of the south extension of Terminal 3 was also lacking. 

Spatial planning: the Federation and the provinces lack means of intervention

The ACA’s auditors also see a need for adaptation with regard to spatial planning. The areas outside the security-controlled area of the airport belong to the Vienna Airport as well. According to the zoning plan of the municipality of Schwechat, they are dedicated as “Private Transport Area – Airport”. In addition to its capacity building plans for aviation, the Vienna Airport also outlined plans for “landside” development. For instance, a new arrival hall, retail and gastronomy areas, a hotel or offices were under consideration. However, neither the Federation nor the provinces can exercise any authority to influence the planned and forward-looking design of the area in terms of spatial planning. This would be particularly relevant for buildings that are not required for air transport as future “landside” retail areas could, for example, conflict with spatial planning considerations of the state or the municipalities. This could, in turn, lead to an outflow of purchasing power from the region.

The ACA therefore recommends to the Federal Ministry for Mobility to jointly elaborate with the provinces the legal foundations for sovereign spatial planning for airfields and to thereby take into account the air transport needs.