Empty words lead down road to nowhere

The energetic Minister for Transport will have to skirt many potential semi-state landmines, writes Arthur Beesley.

Séamus Brennan may have survived the "cigars and brandy" affair at Aer Rianta earlier this month, but there is no indication that the energetic Minister for Transport will have an easier time of it in the new year.

Mr Brennan's first few months in office were characterised by a certain relish to publicise his plans to reform many of the organisations running the State's creaking transport system.

Yet while his consistent mantra of change has been likened to the relentless toy bunny in the Duracel ad, there is no doubt that 2003 will bring demands for more action than vision.

Since his return to Government after the election in May, Mr Brennan has demonstrated a determination to impose his will on bodies such as Dublin Corporation, whose confusing traffic signs he ridiculed, and the Garda, against whose wishes he pushed through the penalty points system for traffic infringements.

More recently, it was Dublin Bus that felt pressure from the Minister when a bungled round of fare increases went well above the 9 per cent sanctioned by Cabinet.

But the agenda to be pursued by Mr Brennan is far wider than that.

It is also one requiring more in the way of institutional reform than a single phone call from the Minister's office will ever bring. And ambitious as Mr Brennan's plans are, they are littered with potential landmines.

The "cigar and brandy" business was a case in point. Mr Brennan's desire to break up Aer Rianta and introduce an independent terminal at Dublin airport might not have been at the heart of the attempt to end his career through the airing of an unproved allegation that he had left unpaid a large bill for drink and tobacco.

But it illustrates that dealings with a powerful State monopoly, resisting change but vulnerable to it, are never going to be straightforward.

No decisions have yet been taken in relation to Aer Rianta. But the broad outline of what Mr Brennan wants is already clear.

On January 17th, he will receive a report from an expert group which is assessing 17 proposals to build an independent terminal in Dublin. This nightmare scenario for Aer Rianta is one which consultants to Mr Brennan's predecessor, Ms Mary O'Rourke, ruled out only three years ago.

Warburg Dillion Read and AIB said in a well-publicised report that international precedents for such a development were "not favourable".

Yet consultants tend to say what they are paid to say, so it is perfectly conceivable that Mr Brennan's panel will advise him to proceed with a tender plan. The three-man group is assessing 13 expressions of interest.

Whether the airports at Shannon and Cork are cut loose from the Aer Rianta mother company is another matter entirely. While Mr Brennan is said to be strongly in favour of the option, the Department of Finance has apparently sounded the warning bell over the degree of State support required to help Shannon, in particular, to stay in business.

While the Aer Rianta profit centre at Dublin cross-subsidises the other two operations, there is a fear that a break-up of the group would raise the difficult matter of a State subvention.Still, Mr Brennan seems determined to strengthen the individual airport operations within Aer Rianta. Moves are said to have been imminent almost weekly since the autumn, but the latest indications suggest developments are likely in the first quarter of 2003.

Expect another attempt to privatise Aer Lingus too. The State airline engineered a swift turnaround during 2002 after going to the brink of bankruptcy in the wake of the September 11th massacre last year.

With the survival plan and a new "low fare" strategy bedded down and operating profits believed likely to top €45 million for 2002, it is safe to assume that the airline will be back in play before long.

But a quick sell-off is unlikely. Strikes at Aer Lingus this year and last proved that trade unions in the airline are prepared to exact a heavy price for their co-operation.

Before any talk of a trade sale, first on the agenda this year will be a Labour Court review of the survival plan in January. So while the airline's young management team dig in to increase profit margins, staff will be pushing strongly for the end of a pay freeze. The very recent troubles at Aer Lingus suggest that agreement on pay will be difficult to reach.

The issue will have to be dealt with before the sale process is restarted. And we have been here before. Remember: the flotation of Aer Lingus was sanctioned by the Government in December 1998. Amid market fluctuations and internal industrial strife, it was not to be.

However, there is no doubt that the Government is committed politically to a sale. But finding a purchaser in a still sickly aviation market will require compromises on price that may themselves create political difficulty.

For its part, Aer Lingus says privatisation is not occupying any management time. With much of the internal groundwork already done, that could change very rapidly.

Then there is the matter of CIÉ. Notwithstanding the other challenges in Mr Brennan's sights, reform of the creaking transport group may yet prove to be his greatest challenge.

The National Bus and Railworkers' Union has already cried foul over the plan to break up CIÉ and establish its bus and rail companies as independent entities. It also questions moves to gradually open the bus market to competition.

In addition, there appear to be few if any actual proposals on the structure of a new regulatory authority to implement and monitor change.

But while the reality is that there is already competition in parts of the bus industry, liberalising the market will require a certain political steel. As the NBRU knows well from previous battles - and there have been many - it is quite feasible to bring the State to a halt if it does not get what it wants.

If the Government really wants to reform the under-performing transport group, it will have to make a decisive move soon. After all, any change process will take years - and no politician wants to face into an election amid industrial turmoil.

For all that, the Government has already dithered over public transport. Only this autumn it side-stepped a decision on the future of the Iarnród Éireann freight service.

Under Government pressure to save money, CIÉ wants to close down loss-making elements of that business and certain passenger lines.

Needless to say, this occurs at the same time as the Government attempts to coax traffic away from roads. The quick-fix solution to this particular snag was to postpone a decision before production of the Strategic Rail Study, which is expected in January.

As everyone knows, however, the transport system has already been studied to death. And for all those studies, in the absence of real reform and a thorough Government funding commitment, it remains third-rate.

With the poorly public finances in mind, Mr Brennan's first preoccupation is to reduce the CIÉ subvention.

Whether he has the mettle, time, or political support required to push the broader agenda forward, remains to be seen.

Facing into 2003, there is one thing in the transport scene that can be said with certainty: that the long-awaited and expensive Luas service will not be introduced before 2004.

This is despite the repeated publication of advertising promising the "next tram in 2003 and, after that, every five minutes". Cynics point out too that these adverts appeared before the general election.

Work on the Luas is progressing and the skeleton of the tram lines can already be seen on the Dublin streetscape. But there is a long way to go yet - and many more traffic jams to be encountered as the track-layers continue their work.

Dublin Bus failed to secure the contract to operate the system, pointing the way for the arrival of the French group Connex. This group will be the first private entity to solely operate a publicly funded Irish transport system since CIÉ was established.

Ironically, it is unclear quite how long CIÉ will remain in existence post the introduction of Luas. But just as the construction of the new system is proving to be a long, complex and expensive affair, the deconstruction of CIÉ will be no easier.