Vol. 263 No. 2
asked the Minister for Transport and Power if he will make a statement in regard to the financial structure of CIE and on the proposed increases in transport charges, freight charges and rail and bus fares; and what action he proposes to take in the matter.
90.
asked the Minister for Transport and Power whether he proposes to sanction further increases in CIE fares; and, if so, why.
91.
asked the Minister for Transport and Power if he will comment on the £6.5 million loss sustained by CIE in the last financial year; and whether the Government proposes to take any special steps to meet the future financial needs of the company.
With your permission, a Cheann Comhairle, I propose to take Questions Nos. 89, 90 and 91 together.
The Transport Act, 1964 (Section 6) Order, 1969, provided for payment to CIE from 1st April, 1969, of an annual grant of £2.65 million to meet the board's estimated revenue losses during the ensuing five year period. This grant has, however, proved to be seriously inadequate.
The board's net deficit has increased from £3.234 million in 1969-70 to £6.171 million in 1970-71 and £6.493 million in 1971-72. Supplementary Exchequer grants of £2.98 million in 1970-71 and £4.464 million in 1971-72 have been voted for CIE by Dáil Éireann in order to keep the board in funds. In the current financial year, the total provision for subsidy for CIE in the Vote for my Department is £6.15 million, i.e. £3.5 million in excess of the statutory grant of £2.65 million.
As Deputies are aware, the McKinsey Report on CIE indicated that the rapid deterioration in CIE's financial position was due mainly to inflation and to the growing competition from private transport. The consultants found no scope for immediate significant savings. Major savings which they did envisage and which would involve some contraction of rail services would take about five years to achieve.
Earlier this year, CIE estimated that their losses in the current financial year would amount to almost £9 million. To reduce the burden on the taxpayer to more reasonable proportions, the board submitted proposals for increases in fares and rates with effect from 4th September, 1972. These proposals are at present under consideration by the National Prices Commission. Until the commission's recommendation is available, I cannot say what action will be taken on the CIE proposals.
It is now clear that the board's subvention of £6.15 million for the current financial year will be inadequate and consideration is at present being given to the measures necessary to deal with this problem.
