Vol. 458 No. 6
3 Mr. S. Brennan asked the Minister for Transport, Energy and Communications if he proposes to issue any fresh mandate to the board of CIE in regard to policy matters; and if he will make a statement on the matter. [17420/95]
33 Mr. Clohessy asked the Minister for Transport, Energy and Communications the current position regarding the composition of the board of CIE and its subsidiary companies. [17431/95]
I propose to take Questions Nos. 3 and 33 together.
Since coming into office I have on a number of occasions set out a clear and consistent mandate for CIE which has three main strands: a clear vision for the future strategic development of the company; a definite medium term investment framework; and a plan to transform the company's financial relationship with the State.
I have specific strategic objectives for the future development of CIE: it must provide effective and high quality public transport services; it must give full value for money to both the taxpayer and the public transport user; it must develop a new industrial relations culture based on partnership and co-operation and it must be more competitive, customer driven and meet the real needs of users.
The Government is committed to a £600 million public transport investment programme over the six years 1994 to 1999. The strategic framework for that investment is set out in the Operational Programme for Transport, agreed with the European Commission. About £275 million is being spent on the renewal of the mainline rail network and upgrading the locomotive fleet. The strategy recommended by the Dublin Transportation Initiative provides the policy framework for an investment of over £300 million in light rail, quality bus corridors and other public transport improvements in the greater Dublin area.
The final part of my strategy is the creation of a new and sound financial relationship between the State and CIE. The company currently receives a £100 million Exchequer subvention each year. I plan to negotiate a series of public service contracts with CIE. They will cover a five year period, beginning with the 1997 financial year. These contracts will spell out clearly what services CIE will provide and what the State will pay to support socially necessary non-commercial services. CIE's contractual obligations will be defined in terms of both the quantity and quality of service to be provided and taxpayers will see how taxes are being used.
The Government is very concerned about the position in CIE. Although it appreciates the work which the individual members of the board have undertaken on behalf of CIE and do not intend to reflect on the integrity, ability of reputation of any individual members, the Government has decided that it no longer has confidence in the board and has resolved to restructure it in the public interest.
Consequently, the Government, in the public interest, has invited the members of the board, other than the worker directors, to tender their resignations by midday on Monday, 27 November. The Government proposes as part of the restructuring, to appoint two CIE executives and a senior civil servant to the board of CIE. This is fully in line with the recommendations of the Task Force on Commercial State Companies which I established earlier this year.
Why is the Minister proposing to sack some but not all members of the board?
As I have already outlined, the Government deems that restructuring of the board is necessary. Members of the board other than those elected under the Workers Participation Act have been asked to resign.
I remind the Minister that he appoints all the directors of the board and I note that he proposes to ask some members but not others to resign. On 19 October the entire board unanimously stood over the Horgan's Quay site sale, yet the Minister subsequently described the sale as a shameful deal. Is it not unusual that he should select some members of the board but not others for dismissal?
The Deputy has raised a matter which in my opinion is worthy of a separate question.
Question No. 33 is included.
We are dealing with priority questions.
My priority question deals with policy and the board of CIE. This matter is central to the board of CIE. Given that the entire board stood over the sale of the Horgan's Quay site and the Minister subsequently called the sale shameful, why does he propose to dismiss only part of the board?
Horgan's Quay would seem to be a separate matter.
Horgan's Quay is the subject of Question No. 20.
Did the Minister get the Tánaiste's agreement to sack these people?
And that of the Minister for Social Welfare, Deputy De Rossa?
The Deputy will be aware that this is a Government decision. I want to make it clear that the restructuring of the CIE board is necessary to implement the mandate which I outlined. Major challenges face the CIE group. It is commencing the largest public transport investment programme in the history of the State, totalling £600 million. CIE is the major player in the transport sector of the economy. It carries almost 300 million passengers per year, employs 11,000 and has a turnover of £400 million per annum. CIE receives a State subvention of £100 million annually. European Union legislation requires a move towards a more commercial approach to public transport.
Another factor which must be taken into account is the refusal of the board to reconstitute the property subcommittee. The Deputy mentioned Horgan's Quay. I would like to state——
Did the Minister convey that request to it?
——that it has been discussed at board level and at the Oireachtas Joint Committee on Commercial State-Sponsored Bodies. I gave all the necessary responses to questions in regard to that. Last week Deputy Brennan and some of his colleagues incorrectly tried to infer that the decision of the outgoing chairperson to resign was because of Horgan's Quay. However, he emphatically stated that it had nothing to do with his decision to resign.
It was because of the hassle the Minister created.
The Government must have confidence that the structural weaknesses in the CIE group relating to management, financial planning, sound industrial relations and service to customers are being addressed and that necessary changes are being implemented. The board of CIE must be restructured to face the challenges of the largest public transport investment programme in the history of the State, a changed commercial and competitive environment, a new industrial relations culture based on partnership and co-operation and a sound financial relationship with the State. These considerations are the sole basis for the removal of board members under the 1950 Act. No other basis is being advanced.
We are dealing with priority questions to which a rigid time limit applies and I therefore seek brevity.
Does the Minister agree that selecting some members of the board for dismissal but not others sets a significant precedent? How does he expect future directors to feel comfortable with an incoming Government in that they may be politically selected for dismissal?
It is the decision of Government to govern. This decision has been taken in the long-term interest of CIE and its employees. I am aware that two directors have acceded to the request of Government to resign. I take this opportunity to pay tribute to the individuals who have honourably acceded to the Government's request to tender their resignations. It cannot have been an easy decision and it is appropriate that I acknowledge the public spiritedness of the individuals in question in agreeing to the Government's request made in the interest of the public good. It must be said that persons appointed to State boards work largely as a matter of public service for modest remuneration and I acknowledge that these individuals served in that tradition. Their willingness to step aside is a tribute to their sense of public service which the Government and I acknowledge.
The chief executive has come from the Civil Service and the Minister told us today that he proposes to appoint two CIE executives to the board and somebody else from the Department. Do either of the two executives come from the Department? If they do, there could be up to four civil servants appointed to the board, including the chief executive.
A takeover of the board.
This would tighten the Minister's and his Department's grip on CIE. It is clear the Minister is firing these people because they do not agree with him.
I am disappointed that the Deputy should avail of this opportunity to cast aspersions on the integrity and ability of civil servants.
He did not do that.
The chief executive, like many others, answered a public request when people were invited to make an application for the vacant position. He came through the due process, was appointed to this position and has been doing an exceptionally good job. The decision of the Government in respect of individuals who will be appointed to serve on the board will be made shortly. I do not know any private sector company which runs its business by excluding executives from the decision-making process at board level. I want to ensure that this does not happen again and that the views of those who run the affairs of CIE on a daily basis are represented when decisions and policies are made where it matters most — at board level.
The Minister wants control.
These are political sackings.
