Agreement will lead to bus and rail fares rise

An agreement with employees is vital if CIE's parlous finances are to be put back on track. Last year alone it lost £56 million, despite a subvention in excess of £100 million.

But the figures are not as horrendous as they appear. Although restrictive work practices will have to be bought out and redundancies paid for, CIE made a provision of £57 million for such purposes last year. When implemented, the viability plans involving cost savings of £44 million, will quickly translate into results.

Once the plans are agreed, two other important steps will be taken. The company will introduce public service contracts. These will entail CIE committing itself to providing a specific service, which it will have to honour or face financial penalties.

Agreement will also pave the way for CIE to implement a fares increase for bus and DART services. This increase would be at least 2.5 per cent, or more in some cases. The company has argued that no real increases have been implemented since 1991 while it has had to pay a succession of pay-rises linked to national wage agreements.

CIE is losing heavily on its rail services. It wants the Government to pay for the upkeep of the railways which costs around £55 million a year. Its chief executive, Mr Michael McDonnell said at the group's a.g.m. last year that the Government spends £600 million a year on roads, so why should it not pay for the upkeep of the railways?

CIE also wants payment for other services - such as the school bus service - which are part of the group's social obligation, but which do not make money.

The new public service contracts will amount to subvention for the company by another name. But CIE would be fully accountable for its performance and a clearer picture would emerge of where Government aid is going.

CIE argues, with some justification, that it is one of the least subvented transport services in Europe. The EU average is around 50-50 according to company sources. In the case of CIE, the paying customer contributes 96 per cent of the cost of the fare.