Irish Rail seeks fare rise to offset loss

Irish Rail will seek another substantial fares rise as it grapples with a deteriorating financial situation.

The company announced the largest loss (€22.4 million) of the three CIÉ companies yesterday, as its payroll and other costs escalated to €212 million for 2002 from €189 million the year before.

The company received a 9 per cent fares increase in December, but a spokesman said another increase was needed to deal with worsening financial problems. He declined to discuss a precise figure at this stage, but said it needed to be considerably in excess of inflation.

Meanwhile, the Minister for Transport, Mr Brennan, has said he has no intention of paying off the company's €214 million net debt. Speaking at a meeting of the Joint Oireachtas Committee on Transport he said the debt was there and it was up to the company to deal with it.

He also said figures which had been "thrown about" concerning the break up of CIÉ were "totally incorrect".

"I can't see for the life of me how it would cost millions to close down a company," he said.

He said he was not going to make anyone compulsorily redundant and he was not going to alter anyone's pension arrangements. However, he called on the unions at CIÉ to call off a "no fares" day they are planning for July 18th. He said it would cost the CIÉ companies €1.1 million in lost revenues.

He strongly emphasised in his presentation that he was not contemplating complete deregulation of the Dublin bus market, but instead a "tightly controlled form of franchising".

He was speaking as CIÉ announced its results for 2002. These showed the company producing a deficit of €3.6 million, compared to €7.8 million the year before.

The company received a subvention of €253 million, compared to €245 million in 2001. The chairman of the company, Mr John Lynch, said traffic congestion was draining the resources of the company.

"Recent studies carried out by BDO Simpson Xavier have shown that traffic congestion cost Bus Átha Cliath and Bus Éireann almost €52 million in 2002," he said.

Bus Éireann produced a deficit of €9.4 million for 2002. However, it pointed out that it increased the number of public service routes in 2002 because of the National Development Plan.

The company believes the subsidy for these routes is not sufficient. It received a price rise at the end of 2002 but it came too late to impact on the figures for the year.

Mr Brennan's call on workers to call off their planned protest actions was immediately rejected by one of the biggest unions in the company, the National Bus and Rail Union.

Mr Michael Faherty, assistant general secretary of the NBRU, said the Minister would have to "try a lot harder" if he was to convince workers that his plans did not jeopardise their futures.

Transferring 25 per cent of Dublin Bus's business to private operators would inevitably have implications for a quarter of the company's 3,200 staff, he said.

"Addressing employees without telling them anything specific about how they will be affected is just not good enough."