Minister for Transport Martin Cullen is expected to sign an order in the coming weeks which will see a €350 million increase in the level of CIÉ borrowing for new rail infrastructure which is guaranteed by the Government. John Downes reports.
This follows a ruling by the EU Commission that the guarantee does not constitute State aid.
This raises the permitted limit for the State guarantee from €250 million to €600 million and allows CIÉ to raise money with private banks to finance necessary investment.
In time, for example, this could see the speedier development of 200kmh "fast trains" along the Cork to Dublin route. These trains are currently the subject of a feasibility study by CIÉ.
If they prove to be viable, the new level of State guarantee might see the company proceeding with the construction of the necessary infrastructure through privately-raised finance, and seeking this money back from the Government at a later date.
It is also expected CIÉ will use its higher "credit rating" to implement key aspects of the Transport 21 initiative when they are needed, rather than waiting for the necessary Exchequer funding to come on-stream.
Similarly, smaller capital development works could be undertaken without having to seek Exchequer funds. These would then be repaid out of the company's own finances.
The EU Commission judgement, which was sought by the Government two years ago, has been warmly welcomed by a spokeswoman for Mr Cullen and a spokesman for Iarnród Éireann.
The EU Commissioner for Transport, Jacques Barrot, said it reaffirmed a "long-standing practice" of the commission.
He said under this practice supervising the construction of new transport infrastructure by a public authority is not an economic activity subject to competition law, but a sovereign decision of the member state.
However, this is under the condition that all potential users of the infrastructure enjoy "free and non-discriminatory access", he added.
The commission also noted that it had been told by Irish authorities that the rail network was currently in an unsatisfactory condition and in "urgent need" of investment.