Before I came into office CIE was experiencing serious difficulties. It was not facing up to the reality of competition and to the need to adopt a more commercial approach. It was poorly managed and providing an inadequate service to its customers. I took immediate action by instituting a series of top management changes which saw the appointment of a new chief executive and new function heads in the major areas of finance, programme and projects, human resources and marketing.
When I announced my proposals to restructure the top management, I clearly outlined the Government's mandate to the company, which placed the emphasis on a much more commercially-driven and customer-focused CIE, delivering quality services at competitive prices.
In the period 1994-99 an investment of over £600 million from European Union and national sources is being made by CIE in its infrastructure and services. This investment programme will significantly enhance the group's ability to offer attractive, efficient and cost-effective services. To ensure that the full benefits of these investments are realised, the group must identify and address its weaknesses and make the transition to a new culture of service delivery to survive in the more competitive environment that is already emerging. The public service contracts regime which I propose to introduce in respect of socially necessary, non-commercial services will facilitate that transition by emphasising transparency, accountability and performance.
A key requirement at this stage is the reduction of the undoubted imbalance that exists between the group's costs and revenues. As Deputies are aware, the managements of the three companies have developed cost containment plans aimed at ensuring the viability of the companies through reduced costs and increased efficiency.
I have been in constant contact with the chairman of CIE and have had several discussions with him this month to keep myself informed of developments in the group, especially those related to the implementation of the cost containment plans. I have made it clear that the cost reduction issue must be negotiated by unions and management on a basis of partnership. They have a common interest in developing realistic and workable plans to promote the competitiveness of the company to enable it survive and prosper in the new competitive operational environment.