CIE fares rise included in plan

CIE will be given more freedom to increase its fares if the £44 million viability plan for the company is agreed by the end of the year, the Minister for Public Enterprise, Ms O'Rourke, announced yesterday.

If unions and management can conclude negotiations for the plan the Minister has also promised to fund CIE through the use of public service contracts. These contracts would involve CIE commiting itself to provide a specific service, which must be honoured or a fine would be incurred.

To help speed up the negotiations, Ms O'Rourke said both unions and management should agree that "no individual element will be introduced until the overall agreement for the particular operating company has been concluded".

The issue of fare increases has been a source of some tension between CIE and Government over the last few years.

The chairman of the CIE group, Mr Brian Joyce, welcomed the Minister's announcement and said the new framework for fares would give the company commercial freedom, which was "essential if the CIE group of companies is to compete effectively into the long-term future".

A fortnight ago Ms O'Rourke intervened in a dispute between management and unions over the issue of the introduction of a minibus service.

After this CIE management were said to be angry and a number of meetings with them and unions were held by Ms O'Rourke.

Mr Joyce said management would appoint a "change management specialist" to assist in achieving an early agreement.

The Minister's announcement was welcomed by SIPTU's Regional Secretary, Mr Jack Nash, who said the changes in the company must also "deliver an acceptable level of earnings for the workforce".

To prevent the negotiations from "dragging on", Ms O'Rourke has suggested the use of "appropriate intermediate benchmarks", to review progress.

She called on both parties to agree that agreement on a re-structuring package for one company should not be made conditional on agreement in respect of the other companies.

In 1996 CIE lost £56 million and it is understood the company wants to increase fares by 2.5 per cent or in line with inflation.