Private Notice Questions. - Resignation of Chairman of CIE.

Three private notice questions to the Minister for Transport, Energy and Communications on the resignation of the chairman of CIE and related matters have been allowed. I will call on the Deputies in the order in which they submitted their questions. I call first on Deputy Robert Molloy.

asked the Minister for Transport, Energy and Communications if he will make a statement on the resignation of the Chairman of CIE and the continuing difficulties on the board of CIE, namely the lack of morale among the staff of CIE and the apparent continuing lack of any coherent national transport policy.

asked the Minister for Transport, Energy and Communications, in view of the resignation of the chairman of CIE and the negative media attention that the company has been receiving over the past seven months, the way in which he and the Government propose to lift the morale of the staff of the three companies in question.

asked the Minister for Transport, Energy and Communications if he will make a statement on the regrettable decision by the CIE chairman to resign; if he will confirm that virtually all the directors, including those appointed by the previous Government, had expressed their full support for the chairman in advance of his decision to resign.

I propose to take the three private notice questions together.

I confirm to the House that Mr. Éamon Walsh yesterday tendered his resignation as Chairman of CIE and that the Government has accepted it with regret.

I sincerely thank Mr. Walsh for his service to the company. Éamon Walsh has steered CIE safely through a difficult period of change and transition. In his brief term as chairman of CIE Mr. Walsh has made major advances towards fulfilling the mandate I gave him on his appointment. These advances included: the appointment of a dynamic group chief executive together with a top management team with a range of skills and expertise in financial management, project management, marketing and human resources management; turning around the old confrontational relationship between management and front line staff which has bedevilled CIE for decades; putting value for money to the customer and the taxpayer at the heart of CIE's corporate mission; and commencing the process of preparing the CIE group for the advent of sharper competition in line with developments at EU level.

Mr. Walsh, in his statement today indicated that, having put in place the main elements of my mandate to him for the development of the CIE group, he wished to resign.

Yesterday, to ensure continuity and an orderly transition at board level in CIE, I appointed Ms Tras Honan to the position of deputy chairperson of CIE.

Since coming into office as Minister for Transport, Energy and Communications, I have articulated a national policy on public transport more clearly and in great depth and detail than has been done for many years. I do not propose to go over the detail of that policy here today. Suffice to say that the main elements of my policy are: a dynamic, competitive, customer focused and commercially driven mission for the CIE group; securing the optimum return to the taxpayer and the public on the major investments in public transport now being implemented; ensuring that these investments are delivered in a timely and effective manner; restructuring the financial relationship between the Government and CIE by introducing public service contracts to replace the existing State subvention in respect of socially necessary but commercially unviable public transport services. These contracts will be multi-annual and will include performance targets for the quality and quantity of services to be provided. Performance will be measured and the results made public.

The Government will appoint a successor to Mr. Walsh as quickly as possible to take forward the implementation of this mandate and to put in place the £600 million investment programme, the largest in public transport this century.

Did Mr. Walsh give the reasons for his resignation? Did the Minister press him to stay on? Did the Minister express lack of confidence in the board during his two hour discussion with Mr. Walsh? Does the Minister propose to take any action on the existing board? Does the Minister accept that during his short time in office we have had two chairmen of CIE and are now about to have a third; we have an acting chairman in the former Senator Tras Honan to whom I offer congratulations on her appointment.

I asked Mr. Walsh to remain in his position. He is a very decent, honourable, capable and competent person who had much to offer to the board of CIE. He fulfilled his functions admirably during his time there.

Mr. Walsh did not give any specific reasons for his decision, but it is common knowledge that he felt he was not at all times receiving the full support and co-operation necessary to implement the mandate given to him by me as Minister. It is obvious from the statements made in respect of Mr. Walsh that he was also concerned that he and his family had become the focus of media attention. He has had a very successful career in the private sector and, to sum up his position, he can do without the hassle.

The Minister has not answered my question about the board.

This decision was made less than 24 hours ago. I have given a preliminary report to my Cabinet colleagues. I have the matter under review and expect to be in a position shortly to announce my intentions regarding CIE. My priority at the moment is to appoint a new chairman immediately to give the leadership required in CIE.

Is the Minister considering replacing the board?

The position of CIE is under review. I will be in a position, in the not too distant future, to communicate my views to the Cabinet. Arising from my discussions with my Cabinet colleagues I will then be in a position to make a public statement.

I regret that Mr. Walsh has found it necessary to resign. Prior to my election to Dáil Éireann I was employed by Iarnród Éireann. I am, therefore, speaking with some authority and knowledge when I say that the 11,000 workers at management and staff level are appalled at the manner in which the company has been used as a political football in recent months. This has had a devastating effect on the staff. Does the Minister agree that this is totally unacceptable and must be brought to an end? In the light of recent developments will the Minister give a commitment that in making future appointments to semi-State bodies only people with experience, talent and qualifications in the relevant field of activity will be appointed as directors?

I agree with the points made by the Deputy about the morale among staff in CIE. On my appointment as Minister approximately 12 months ago my attention was immediately drawn to the serious difficulties in CIE's management structure which was totally inadequate and needed to be strengthened. I immediately moved to strengthen the management structure and a number of key and important appointments were made. I have studied CIE's record in regard to industrial relations which has been appalling in recent years. That issue was addressed by way of the new appointments made. The CIE board had a lengthy meeting this morning. I have not yet received a report of the meeting and I intend to meet with the deputy chairman within the next half hour to get a report of the outcome.

I agree with the points made by the Deputy about the calibre of people appointed to State boards. In this context I would draw the attention of Deputies to the corporate governance section of the task force report which states that the chairpersons and directors of commercial State companies should be appointed solely on the basis of their experience, competence and expertise. I hold that view very strongly and have implemented it in appointments to semi-State bodies.

On behalf of my party I wish to express regret at the decision of Eamon Walsh to resign. It is difficult to find people of his calibre and we genuinely regret his decision to leave office. We wish him well, as we did when he agreed to take up that post. Is the Minister aware that all the directors of the board of CIE consistently expressed and gave their support to Mr. Walsh during the past four-five months?

I am surprised that the Deputy has asked that question. I would expect all members of State boards to fulfil their obligations and responsibilities, irrespective of their political persuasion or who appointed them. It is common knowledge that that was not always the case in regard to Mr. Walsh. If the Deputy is saying that some people had a change of heart when they recognised his ability and competence I accept that.

Does the Minister agree that this sorry episode will have the effect of deterring decent men and women with the necessary ability and professional acumen from taking up positions on semi-State boards? I do not think anyone would want to endure five-six months of the kind of carry-on we have had since the middle of summer.

I agree that we will find it difficult to attract people with the necessary calibre to fulfil these functions on behalf of the State. It is important for us to recognise this. Unfortunately in Mr. Walsh's case this was not recognised in time. The Deputy said that the carry-on began in the middle of the summer. Mr. Walsh clearly outlined his reasons for resigning. He said:

I strongly support Minister Lowry's policies to effect a change in public transport in Ireland. I support unreservedly the Minister's vision for CIE and the State sector in general and notably his commitment to put an emphasis on the customer and value for money for the taxpayer. Any suggestion that the Horgan's Quay issue was relevant in my decision to resign is simply wrong.

He went on to say that during his tenure of office he achieved considerable progress in managing change and recognised that he achieved this with the co-operation of the management, staff and trade unions.

And the board.

That is an accurate reflection of what he achieved during his short tenure as chairman of the CIE group.

I join other Deputies in expressing my regret at Mr. Walsh's decision to resign. On the morning after the Government made the appointment I welcomed it as Mr. Walsh is a man of substance and the kind of person we need in State companies. Does the Minister agree that the focus of the CIE board in recent times has been a political rather than a commercial or strategic one? Will he further agree that it would be in the interest of CIE and the public if the entire board of CIE was replaced?

It is a matter of public record that at times the discussions and attitude of the board became over-politicised. The fact that five members of the board found it necessary at one stage to have a secret meeting and later issued an invitation to a journalist to express their views in public was extremely unhelpful and is something I would not like to see arise again. As I have clearly stated, I gave a preliminary report to the Cabinet meeting this morning and within the next half hour or hour I intend to have discussions with the deputy chairperson of CIE with a view to ascertaining the outcome of today's board meeting. This evening I intend to have discussions with a potential candidate to replace Mr. Walsh as chairman of the group and to report further to Cabinet. After I have reviewed the matter I will discuss it with my Cabinet colleagues and when we have made a decision I will communicate it publicly.

While acknowledging that change in CIE in inevitable, does the Minister agree that the company and staff have performed very well since the restructuring of the company in 1987, particularly given the lack of resources and direction by successive Governments?

I accept that significant progress has been made and I am pleased to acknowledge that there has been a general improvement in the approach and attitude of all those working in CIE. There is now a high level of co-operation between the management, workers and trade unions. The Government has been genuinely concerned for some time about the impact on the work force. We have set out a clear strategic vision for the company based on customer needs and the provision of value for money for the taxpayer. The new management team has already demonstrated its intent to replace the old adversarial approach to industrial relations with one based on a shared consensus approach to solving the problems at CIE.

It is important to point out that the largest investment programme in public transport in the history of the State will take place between 1994-99. This investment, which amounts to more than £600 million, clearly demonstrates the Government's commitment to CIE and indicates the need to ensure that we have a strong and responsible management team in place. One of the first mandates I gave the executive chairman of the company was to make the necessary arrangements to appoint a chief executive officer and a new management team. Mr. Ray Byrne was appointed head of programmes and projects; Tony Bergin was appointed head of human resources; Jim Cullen was appointed chief financial officer and Eddie Lane was appointed head of marketing. The chief executive and the four function heads bring together the range of skills needed to lead the company through a difficult transition to a more commercial and competitive era.

I wish to illustrate the level of progress made and the seriousness with which these people take their task. Mr. Byrne has had extensive experience in the Departments of Finance and Transport in dealing with a wide range of commercial State bodies. He has had particular experience of large project management and is heavily involved in the Dublin light rail and national mainline rail investment programme. He brings a level of knowledge and expertise which significantly complements the skills available in the CIE group. Mr. Bergin will inject — and this is his job — current private sector industrial relations practices into the group which has suffered in the past from an inward looking old-fashioned confrontational approach in this area. Already we have seen considerable progress in this area. Mr. Cullen, the chief financial officer, has extensive experience in financial management and control and has a specific mandate to address the issue of cost reduction and cost efficiency throughout the group. Mr. Lane, who has worked in CIE's advertising arm has been promoted to head of marketing and sales with the remit to improve marketing of CIE services and to maximise revenue arising from ancillary activities such as advertising. There have been significant improvements in this area with advertising profits set to increase by more than 50 per cent in the next few years. In the past, marketing was seriously neglected in CIE and Mr. Lane's appointment has already redressed this neglect.

In thinly veiled language it would appear that Deputy Sean Ryan has indicated his unhappiness with the way in which the Minister has dealt with CIE to date.

I can speak for myself, Deputy.

The Minister speaks of low morale in CIE, but would he accept that nobody contributed more to the low morale in CIE than him?

What about Mr. Tuffy and his Fianna Fáil friends?

Nieces and relatives travelling at taxpayers' expense.

The low morale predated my appointment as Minister. I have referred to the appalling and unacceptable practices that operated at CIE, the lack of efficient management at CIE which percolated to the workforce who were very conscious of the lack of leadership of that group. Over recent weeks Members opposite have chosen to ignore that. Deputy Sean Ryan was quite right when he addressed the issue of morale but I am sure the Deputy is well able to speak for himself and that Deputy O'Donoghue interpreted him correctly. I have had private discussions with Deputy Sean Ryan and he is very conscious that great progress has been made and that has been acknowledged throughout the group from management down to the workforce who are very happy with the sense of direction and the leadership they are getting. They are very happy also with the level of communication that exists between management and members of the group.

In reply to Deputy Sean Ryan the Minister said that since 1987 there had been a considerable improvement on matters within CIE which I was very glad to hear because it appears to contradict the Minister's earlier statement. The Minister said that since 1987 there has been a considerable improvement in the operational strength and activities of CIE. The Minister said that Members should speak for themselves, but I take from what he said that he will be considering the membership of the board. Will the Minister confirm that he will continue to have worker directors on the board of CIE? I had thought that Deputy Sean Ryan would raise that point.

The Deputy can take nothing from what I said other than what I said. At the appropriate time I will announce my intentions together with the Government's intentions in respect of the replacement of Mr. Walsh. I confirm that significant progress has been made and that the progress is down mainly to the fact that in less than 12 months, we have appointed four new members to the management team, in addition to a new chief executive. Under their leadership significant progress has been made.

Has the Minister contributed to the instability within CIE and to the low morale of staff? In particular may I pinpoint the meeting of 19 October when the board of CIE ratified for the second time the sale of Horgan's Quay site as being in the best interests of CIE. Given the further castigation of that sale — the Minister indicated clearly his lack of confidence in the decision taken by CIE — the position of the chairman was untenable as a result of his action.

I noticed that the Deputies opposite have been clutching at straws in recent hours. A number of Fianna Fáil spokespersons are adverting to and trying to draw in the Horgan's Quay site. I wish to quote one line from the statement issued by the chairman of CIE, which is a direct rebuttal of the imputation that the Deputy is trying to draw:

Any suggestion that the Horgan's Quay issue was relevant in my decision to resign is simply wrong.

I ask Members to accept the word of the outgoing chairman in that regard. The Deputies consistently attempt to justify the decision in regard to Horgan's Quay. I have placed on record the facts and the details in regard to the Horgan's Quay site. I said and I will say it again, it was a shameful and disgraceful sale of a public asset which is totally unacceptable. It is obviously acceptable to Fianna Fáil but it is not acceptable to me or to the Government.

Does the Minister realise the seriouness of the situation in that the person selected by him to be a full time professional chairperson of the board of CIE has resigned after a few months thereby expressing no confidence in him as Minister? Is this not very serious?

Deputy Sean Ryan adverted to the fact that Fianna Fáil has consistently made a political football of the CIE group. All I can do is again quote the following from the statement issued by the chairman: "I strongly support Minister Lowry's policy to effect a change in public transport in Ireland, I support unreservedly the Minister's vision for CIE and for the State sector in general". This is crystal clear. The Deputy should address his question nearer home.