Consultant hired to help cut £70m Iarnrod losses

IARNROD Eireann has appointed an outside consultant to help cut its operating loss of over £70 million a year.

The management consultant, Mr Leslie Buckley, was appointed by the State rail company last week.

His job is to conduct a general review of the firm's cost base, a company spokesman has confirmed.

He said Mr Buckley's mandate included reviewing staffing levels and work practices. The appointment was made by Iarnrod Eireann and not by CIE, its parent company, the spokesman said.

The unions, who represent more than 5,000 employees of Iarnrod Eireann, have been consulted on his appointment.

The review will take several weeks to complete. It is similar to one carried out at Bus Eireann by the consultants Bernard Somers & Associates.

Mr Somers' report recommended widespread changes including the use of outside contractors and less overtime for drivers.

The Bus Eireann review followed a shake up in senior management at CIE after the appointment of Mr Michael McDonnell as chief executive last year.

Iarnrod has not published its results for 1995 yet. But the company had an operating deficit of £80 million in 1994 and no major improvement is anticipated.

In addition, the company paid almost £12 million in interest on its debts of over £140 million.

In 1995, a State grant of £93 million was required to support the company and allowed it to return a surplus of £2 million.

Iarnrod Eireann is made up of the mainline rail service and the DART suburban service in Dublin.

The group also includes a road freight business, Rosslare Harbour and a catering company.

Both the mainline rail service and the DART operate at a loss and receive State aid.

The mainline rail service made an operating loss of £85 million before interest and received £80 million in State aid in 1994.

The DART made an operating loss of £9 million before interest and received State grants of £14 million, during the same period.

Both operations are saddled with the cost of maintaining the rail infrastructure, which cost almost £50 million in 1994.

The road freight division made a surplus of £600,000 and the Rosslare Harbour company returned a surplus of £2.3 million. The catering operation was also profitable, making a surplus of £400,000.

Mr Buckley is best known for his work at Irish Steel, were he was brought in as acting chief executive by the executive chairman, Mr Pat Dineen.

Mr Buckley implemented a rescue plan that achieved savings of £8.4 million and involved 200 redundancies out of a workforce of 550.

Prior to establishing his consultancy in 1990, Mr Buckley worked with Waterford Crystal, Smurfit Group, Agra Meat Packers and Monaghan Mushrooms.

As a consultant he has been involved in restructuring at Waterford Crystal, Aer Lingus, where he worked with the executive chairman, Mr Bernie Cahill, and Irish Steel.