Autonomy of CIE at heart of conflict with Minister

Brian Joyce's resignation letter as chairman of CIE to the Minister for Public Enterprise indicates that he has been unhappy with his relationship with Ms O'Rourke for some time.

The question of CIE's autonomy - on fare structures, industrial relations and on the subsidy it is paid - was at the heart of these difficulties.

Further issues surround Mr Joyce's assessment of the Luas initiative. He argued in his resignation letter that the project "was potentially going to absorb up to 50 per cent of all capital resources for national public transport in return for carrying less than 10 per cent of peak hour passengers into central Dublin".

Delivered by Mr Joyce to the Department of Public Enterprise yesterday evening, the letter cited fundamentally differing views with Ms O'Rourke on CIE's autonomy. Mr Joyce said he was unlikely to agree in the foreseeable future with the Minister.

Mr Joyce (59) was due to retire as CIE chairman in November, five years after taking up the position. It is understood he plans to concentrate on his career in the private sector, where he holds several directorships.

He said sub-strata involvement in industrial relations matters "completely undermines" CIE's management, leaving it defenceless against any form of industrial action. "The confusion caused by such intervention is a recipe for continuous conflict and incremental demands from the trade unions - the NBRU claim in Dublin Bus is a case in point," he wrote yesterday.

It is understood that CIE management involved in the dispute over pay at Dublin Bus - which caused a one-day stoppage of the bus service last month - was unhappy with what it perceived as strong and inappropriate pressure on it from the Minister during negotiations. The dispute is the subject of arbitration at the Labour Relations Commission.

CIE executives are also known to have been unhappy with the involvement of a management consultant, Mr John Behan, in long and difficult negotiations on a viability plan introduced in 1994, which was designed to cut some £44 million (€56 million) from its expenses. Mr Behan was appointed by Ms O'Rourke in 1997 after a threatened industrial dispute at Bus Eireann, which subsequently withdrew from the viability plan. The plan was implemented in Dublin Bus in 1998 and partly implemented at Iarnrod Eireann.

Mr Joyce's letter cited an address he gave to the Chartered Institute of Public Transport in November 1998 on CIE. "The paper outlined a number of items necessary to bring about a revitalisation of public transport in Ireland with a specific emphasis on handing back the management of the CIE companies to the managers within them," he said.

"Key issues addressed included public service contracts, freedom on farebox changes and freedom from the involvement of the Department, the Minister and the Government in industrial relations matters - all of these are in the gift of the Government yet remain an elusive pipedream," wrote Mr Joyce.

Mr Joyce argued in the address that fare increases must be indexlinked. While fares increased by about 11 per cent last January, this was the first price rise since 1991. CIE management have constantly argued in recent years that the group was chronically underfunded since the 1980s in terms of fare structures and its State subsidy.

In the context of the subsidy, Mr Joyce was unhappy that public service contracts had also failed to materialise, despite being discussed for several years. Under such contracts, CIE would provide generally unprofitable services such as certain bus and rail routes, agreeing to maintain specific standards for a specific subsidy.

Mr Joyce also argued in 1998 that the history of negotiation and confrontation in the CIE group had been one of appeasement and compromise. He said the reluctance of successive governments to countenance a disruption of service was always a trump card.

On Luas, Mr Joyce said he had informed Ms O'Rourke of the prospect of the project costing up to £1 billion, four or five times the amount originally planned. "You will know that I did this, as stated in my letter, so that you and your Cabinet colleagues would know the up-to-date position before large-scale irrevocable commitments were made for capital investment . . . I felt it was appropriate to provide you with the opportunity to review the project."

He continued: "It would be normal in the private sector to carry out such a review on any project that escalated so dramatically in order to establish whether the original objectives could be achieved in some other way."