Vol. 545 No. 1
30 Mr. Higgins (Mayo) asked the Minister for Public Enterprise if she has been notified by the management of Iarnród Éireann of a decision by the company to reduce the company's freight services; the manner in which the information was conveyed to her; and if she will make a statement on the matter. [29822/01]
The review group, comprising Mr. Bill Attley, Mr. John Dunne and Mr. Kevin Bonner, which reported to me on 4 July on Iarnród Éireann: The Way Forward, indicated that there are major questions to be addressed with regard to the future of the rail freight business.
The review group set out a number of arguments in favour of, and against, retaining freight services generally. In this regard, it recommended that a special and thorough study of the issue be commissioned as a matter of urgency. In addition, the review group suggested that long range plans need to be established for the rail sector as a whole.
I am aware the boards of Iarnród Éireann and CIÉ are considering a business plan for the rail freight sector for 2001 to 2006 arising from commercial losses being incurred. They have forwarded a copy to me for my information. They are in the process of having discussions with the trade unions on the plan. I understand that no decisions have been taken in that regard. Furthermore, I understand that Iarnród Éireann is working on a business plan for the rail sector as a whole. We will commission a strategic study of the rail sector in line with the report of the three wise men, Iarnród Éireann – The Way Forward. This study will assess the CIE proposals and take account of the various other rail proposals which arise from land use studies being undertaken around the country. This study will also assess the rail freight proposals. It is intended to discuss the terms of reference for the proposed study with CIE and the social partners at the partnership forum on public transport.
EU funding of approximately £196 million – 249 million – is provided in the rail development programme set out in the national development plan for the upgrading and renewal of suburban and mainline rail services. No provision has been made for re-opening of passenger or freight lines. The decision by Iarnród Éireann to close the Kingscourt to Tara Mines rail line following the loss of the Tara Mines business is a matter of day-to-day responsibility of the board.
(Mayo): Is the strategic study yet another means of putting this on the long finger to tide the Minister over until the next election? As the main shareholder, is the Minister prepared to stand over the decision to cut the number of employees working in the transportation of freight from 600 to 300? At a time when 6,000 new cars come on to the roads each week, convoys of juggernauts take over the roads and there is a huge increase in the number of road accident fatalities, is it not incredible that a proposal to cut freight is even contemplated?
I have no intention of proposing a cut in the numbers employed in Iarnród Éireann's freight business or in the amount of freight carried. I have made it very clear this was a proposal comprising for and against arguments. The board has taken no decision. I have spoken to the chairman about it informally because it is not my job to interfere in an actual decision. I fully agree with the Deputy that it is odd, when we are trying to reduce traffic on the roads, that additional heavy goods traffic would be put on the network. I do not think the plan is proper or that there would be a proposal of any kind to take freight from the railways. Iarnród Éireann's job is to look at where it is losing money and find what case it can make for a sustainable freight business. In every European country, freight is being moved more and more by rail and it does not make sense to say that we will take it from the railways and put it on the roads.
(Mayo): I thank the Minister for her reply. If this plan comes to the Minister, is she, as the main shareholder, prepared to veto it? Does the plan not reveal a manifest lack of marketing skills and competence on the part of the company? Why would it contemplate this at a time when there are many opportunities in the market and a willingness on the part of private industry to use railways? Most of Europe is now moving the transport of freight from road to railways. It is incredible that the company would not exploit the many existing opportunities.
If it requires a short-term subsidy, would the Department of Public Enterprise be prepared to make the necessary finance available to put a proper marketing strategy in place and avail of the many opportunities? Is the Minister aware that this is more than something that has just been mooted? I have discussed this with the managing director and this is something that is in the pipeline. Will the Minister give a categorical assurance that, if this plan comes before her for final ratification or sanction, she will not countenance it and will veto it?
To return to the first point, it is proper for any company to look at where it is losing money. In this case there are areas of Iarnród Éireann's freight business that are losing heavily. The company has not yet taken a decision. I have been informed that it has discussed the matter and it is to come back for further discussion.
It is clear there is corporate governance in Iarnród Éireann and there is a line over which the Minister does not step. The company is in receipt of significant annual subvention which increases yearly. The 2002 Estimates indicate the subvention will be further increased. How CIE chooses to divide its money is a matter, by law, for the company. Iarnród Éireann should look at each business it deals with and offer further services. I cannot see myself being in favour of taking freight from the railways and putting it on the roads. A proper business plan must be put in place.
