Stoppage on the rails risks exacerbating Iarnród Éireann’s fragile financial state

Tue, Aug 26, 2014, 01:00

The disruption caused to thousands of mainline rail and Dart users by industrial action taken by the NBRU/SIPTU group of unions represents an excessive response to relatively modest – and temporary – pay cuts. The action takes no account of the financial plight of the company; of the State’s own parlous position or the threat to existing employment. A belief appears to exist that if sufficient turmoil is caused, the Government will provide additional funding.

Given the past militancy of the trade unions involved, the strike may involve something of a “letting off steam” exercise, so as to allow talks to resume between the parties in a less confrontational atmosphere. That may happen in advance of three further days of strikes, planned for later this month. Minister for Transport Paschal Donohoe has refused to intervene in the dispute, but he has reassured workers that the Government’s subvention to Iarnród Éireann will not be reduced next year.

That is a significant concession. The trade unions are, however, likely to seek clarification of the Government’s intentions in relation to the future structure and funding of the railway network, following comments by former Minister Leo Varadkar concerning its long term viability. Providing such certainty would represent an important contribution.

The monopoly enjoyed by the CIÉ over public transport is a thing of the past, with private coaches competing on inter-city routes and Luas providing a light rail service in Dublin. But old attitudes persist. Recession brought a significant cut in the Government’s subvention in 2008, a fall in passenger numbers and fuel price rises. Four years later, Mr Varadkar warned that CIÉ would collapse unless realistic business plans were introduced; savings were made and assets sold off. Earlier this year, the Labour Court found that pay cuts were unavoidable if the future of the company and its employment levels were to be sustained.

Dublin Bus and Bus Éireann introduced similar cost-saving measures last year and, after limited strike action, a compromise was thrashed out at the Labour Relations Commission. Those temporary pay cuts will end next January. A similar approach should be taken in relation to the present dispute. Not only does strike action cause general disruption and economic damage, it threatens the employment prospects of those involved. On top of lost passenger income, Iarnród Éireann stands to face heavy fines from the National Transport Authority for failing to provide agreed services.

Iarnród Éireann is loss-making and deeply in debt. Accumulated losses over five years amounted to €150million and the company regards the situation as unsustainable. Nobody likes a pay cut. But workers and unions should consider the bigger picture and their future in providing a viable public transport service.