State transport firms could face legal issues over Covid losses, union claims

Bus Éireann losing €700,000 weekly, NBRU tells Oireachtas committee on Covid-19

Bus Éireann said recovery from the financial impact of Covid-19 ‘will take some considerable time’. Photograph: Dara Mac Dónaill

Bus Éireann said recovery from the financial impact of Covid-19 ‘will take some considerable time’. Photograph: Dara Mac Dónaill

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Dublin Bus, Bus Éireann and Irish Rail are expected to make losses for the next few of years due to Covid-19, creating potential problems under company law, the National Bus and Rail Union (NBRU) has said.

In a submission to the Oireachtas committee on Covid-19 the union pointed out that there would be no reasonable profit for the companies in 2020, with commercial services either mothballed or operating at a loss.

The union said if directors of the companies could not state when they would meet their bills over the next 12 months – to continue as a going concern – they could be accused of trading recklessly.

The NBRU said Bus Éireann was losing €700,000 per week due to Covid-19 public-health restrictions and the market downturn due to the pandemic.

“The reality is that as the CIÉ subsidiaries are using cash reserves – some of which had been earmarked for capital investment at Irish Rail – to keep operating. With no profits on the horizon, they are breaching company law by not being able to declare themselves as going concerns and also not having the requisite levels of shareholders’ funds to satisfy the law,” the union said.

“The consequences for not being able to declare as a going concern mean difficulties purchasing, obtaining credit or banking facilities. Dublin Bus, Bus Éireann and Irish Rail need their status altered to remove the threat of not being able to declare themselves going concerns,” it added.

Bus Éireann told the committee in its submission that recovery from the financial impact of Covid-19 “will take some considerable time, especially as revenues could be depressed by capacity and demand constraints for the medium term”.

It said at the peak of the crisis its passenger numbers fell by 96 per cent “with similar impact on revenue, which has significantly and adversely impacted the business’s reserves”.

Since June, “passenger numbers have been slowly but steadily rebuilding to 35 per cent of pre-Covid19 levels,” it said.

It said the cost of increased personal protective equipment and other safety measures, including additional cleaning services, would be more than €5.5 million for 2020. However, it said the National Transport Authority would pay for the costs incurred in operating State-subsidised public-service routes.

Transdev, the operator of Dublin’s Luas system said up to mid-May revenue had dropped by 38 per cent compared with the same date last year.

“Since that date the restrictions have been eased and it is hoped that the later periods will see an increase in passenger fare revenue; however, it will still be very significantly lower than 2019 levels.”

Traffic levels

The company said car journeys in Dublin city centre were “recovering a lot faster than public transport journeys”.

“Car traffic at the canal cordon is at 80 per cent of pre-Covid levels, whereas public transport levels are at just over 30 per cent of their pre-Covid levels.”

The NBRU argued that six months of Government supports for the commercial transport sector to run into early next year did not go far enough and were not for long enough. It said supports should continue “until such time as the ‘new’ bus market landscape is mapped out and agreed”.

The union said that with a procurement process started to buy new rail and Dart fleet, “we may need to revisit or examine the physical layout of the rolling stock – standing shoulder to shoulder not an option going forward – to determine the best virus-proof set-up that is practicable to allow the trains carry the greatest number of passengers in the safest manner possible”.

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