The chairman of CIÉ, Dr John Lynch, is to have his term of office extended by another three years, the Government confirmed last night.

Dr Lynch, who was previously director general of the training agency Fás, has been with CIE for the last five years. The decision effectively kills off plans by the previous minister for transport, Séamus Brennan, to abolish CIÉ.

A spokesman for the Department of Transport said a decision had been taken to renew Dr Lynch's contract and Dr Lynch would also be acting as executive chairman for another year.

Dr Lynch, a public servant with considerable experience in public relations, has lectured widely on business and industrial relations in Irish third-level institutions and the US.

CIÉ has yet to publish its annual results for 2004, but they are expected to show an improved position and strong growth in passenger numbers.

Revenue has been growing at the company in recent years on the back of increased State investment. Minister for Transport Martin Cullen is expected to announce further funding in a 10-year public transport plan.