CIÉ's €36m band-aid can't hide its true ills
What does the Cabinet’s decision earlier this week to give CIÉ an extra €36 million in State subsidy tell us?
One, that the company is in dire straits financially. This money is a temporary salve that gets the bus and rail group through to the end of the year. What then?
It plans to sell certain assets – its fibre-optic cable network and properties – but that will be just a once-off gain. It won’t provide a long-term solution.
Two, CIÉ’s financial forecasting leaves a lot to be desired. Seven months into the year it has a €36 million hole in its finances in spite of the State subsidy cut for 2012 being well flagged by the Minister for Transport Leo Varadkar and lengthy consultations with the National Transport Authority on fares increases.
Three, that higher fares are most definitely en route for bus and rail passengers. CIÉ is currently negotiating with the National Transport Authority for an average 6 per cent fares rise. CIÉ won’t talk about the timing but sources indicate that it could be as early as October.
Four, that Irish Rail is a financial black hole and clearly needs radical restructuring.
The vast bulk of the €36 million in emergency funding is going to Iarnród Éireann. Dublin Bus is getting some extra cash, too, but Bus Éireann, which is profitable, gets nothing.
We know that Iarnród Éireann is negotiating with its unions about reducing its employee headcount by 450. What about axing or curtailing lightly-used rural rail services? It won’t be popular with voters but the Government might have to bite the bullet on this one.
Five, that the time has arrived to act on the recommendations from the Colm McCarthy-led review of State assets.
In April 2011, McCarthy recommended selling Bus Éireann expressway, Rosslare port and CIÉ Tours, and privatising all or part of the Dublin Bus network after a model for competition in our capital city’s bus market is decided upon.
What are we waiting for?