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JOINT COMMITTEE ON TRANSPORT debate -
Tuesday, 19 Nov 2002

Vol. 1 No. 1

Presentation by CIE and Iarnród Éireann.

I welcome Dr. John Lynch, chairman of CIE; Mr. Joe Meagher, managing director of Iarnród Éireann; Mr. Steven Aherne, freight manager of Iarnród Éireann and Mr. Richard O'Farrell, manager of finance and administration of Iarnród Éireann. I draw attention to the fact that members of this committee have absolute privilege but this privilege does not apply to witnesses appearing before the committee. Members are reminded of the long-standing parliamentary practice to the effect that they should not comment on, criticise or make charges against a person outside the House or an official by name in such a way as to make him or her identifiable.

I propose that Dr. Lynch make his presentation and that members then ask questions.

I hesitate to say it is a pleasure to be here because our last time here was in Kildare Street and it was not pleasurable. I thought I would not have to go through this again.

First, it is important to explain how we arrived at this important decision. It is a result of the way CIE is structured. CIE is a statutory body, has a single shareholder - the Minister - and is governed by a number of Transport Acts, including the 1950 and 1986 Acts. Iarnród Éireann, on the other hand, is a wholly-owned subsidiary and is a limited company. As one would expect with a limited company, it is governed by the Companies Acts of 1963 and 1990.

CIE being a statutory body is governed mainly by section 2(3) of the Transport Act which states that it must conduct its business so that its operating expenditure does not exceed its revenue. When the CIE board asked its subsidiary, the Iarnród Éireann board, to do its projections over the next couple of years, it found out that to use the 1964 Transport Act would cause problems for the directors in so far as they were projecting significant losses for the next four years. The CIE finance committee instructed Iarnród Éireann to come forward with proposals that would minimise those losses.

Iarnród Éireann's management came up with proposals and the Iarnród Éireann board considered them. Before these came before the main board, as one would expect, some of the information leaked out. As a result, there was considerable uisce faoi thalamh and difficulties arose. The CIE main board was considering the matter when it received a request from the Minister to wait until the strategic rail review, which he expected to be complete within two months, was forthcoming. As this was the request of the single shareholder, we decided to wait.

However, that does not overcome the fact significant losses have been incurred and it is obvious that resources will be critical in the near future. We have a number of difficulties. For example, 50% of railway carriages are in excess of 30 years old and need to be replaced. In 1996, the capital given through CIE for Iarnród Éireann was £460,000. The amount needed now is a quantum of that figure because successive Governments neglected the railways or did not have funding available to allocate to them. It must be remembered that railways consume considerable sums of money.

These problems did not appear out of the ether. Resources are needed mainly for passenger services. Where losses exist, it is, in the first instance, incumbent on the directors, under the provisions of the Companies Act, not to allow these difficulties to continue. In our projections to 2012, a total of £1.5 billion will be required to merely maintain the status quo in terms of passenger business. It is important to put that in context and Mr. Meaghar will explain it in more detail. That is the broad position under which that the board of CIE and Iarnród Éireann considered this proposal. The losses that are projected just under the particular items for which we have been asked to account represent just one subset of a series of three or four items required to return the company to a decent financial position.

Mr. Meaghar

I thank members for inviting us to address the committee. Since this is our first opportunity to meet the committee. I will briefly describe the company and outline our plans in general. I will also deal with the key issues relating to freight and the lightly used passenger lines.

Iarnród Éireann is the provider of rail services nationally. We operate intercity services to all major population centres and commuter services, predominantly in Dublin but also a number in Cork. We operate rail and road freight services and we own and operate Rosslare Europort. We carried 34 million passengers in 2001. Usage of our passenger services is at record levels and our passenger carryings have increased by 16% over the past five years. Since 1998, staff numbers have risen by more than 800 to just over 6,000. Costs have continued to outstrip the growth in revenue and the company is facing a serious financial situation. Our customer revenue amounts to €190 million. In the current year we will receive State operating support of €155 million and are projecting an operating deficit of €25 million. I will elaborate in more detail later in my presentation.

Members will be aware of the chronic under-investment in railway infrastructure and equipment over recent decades. Thankfully, this has now changed and in recent years we have been undertaking a major investment programme. While much of this has gone towards addressing shortfalls in areas such as track, signalling and stations, we have also begun to increase capacity, particularly in the Dublin area. An indication of the made progress is as follows: some 325 miles of track have been renewed, with an average of 75 miles per year which is considerably more than in previous years; some 200 bridges have been replaced; some 400 level crossings have been upgraded; there have been DART extensions to Malahide and Greystones; some 38 new DART carriages have been added in the past three years - there were 80 when the DART became operational in 1984 and three years ago there were just the same number; we have upgraded Maynooth line with doubled track between Clonsilla and Maynooth; we have put 47 new Arrow diesel railcars into service; the redevelopment of Heuston Station is well under way and we expect it to be completed next year; Drogheda maintenance depot -at which railcar maintenance is carried out - is under way and will be completed next year; a further 80 diesel railcars will be delivered for service in mid-2003 - in the late 1990s we had 17 railcars in our fleet, we now have 64 and by the end of 2003 we expect to have 144, which will increase our capacity for carrying commuters; and new stations have been constructed at Clontarf Road, Grand Canal Dock, Drumcondra and Monasterevin.

There are a number of things we are about to do and I have highlighted three of them. We will place an order for 67 intercity carriages. No European railway operator uses carriages more than 25 years old, but as stated earlier, half our intercity fleet is more than 30 years old. We will commence a project to increase the capacity on the DART by putting in place the infrastructure to allow us to operate eight car trains, compared to the current maximum of six. We plan to place an order for another 40 DART carriages. This investment has brought about much needed safety improvements, which was the priority in recent years. By the end of 2003 the lines to Cork, Tralee, Limerick, Waterford, Galway, Westport, Sligo and Belfast will be renewed with continuously welded rail. Peak capacity in Dublin has been increased by 40%. This level of investment must be sustained if the railway is to continue to expand to meet the current and future demands.

In parallel with the capital investment programme, there has recently been a major transformation in respect of employees' working conditions and remuneration. Low basic wages and long working hours have been replaced with new contracts, a five-day week and greater flexibility. This was essential because many staff were working seven days a week and for over 60 hours before the new conditions were put in place.

In the future we plan to continue upgrading, modernising and expanding the railway. Our priorities for the coming decade will be to increase the suburban track capacity to enable us to carry more people at peak times. Our objective is to increase our current capacity, which has already been increased in recent years, by another 75% over the next five years. We plan to provide eight new stations and we are in discussions with developers with a view to their funding the construction of those stations. We have a major plan to upgrade Tara Street, which is our busiest station, and we plan to provide a new station at Spencer Dock. Capacity is quite tight in the central area, but we need to find new ways to bring trains into that area. We plan to purchase 67 new intercity carriages to come into service in 2005 and it is our aim to replace all life-expired carriages - those over 30 years old - by 2007. It is an ambitious programme but it must be carried out.

We must continue with our safety programme, complete the re-signalling programme, redevelop Cork, Galway and Limerick stations, provide new booking and reservation systems - we plan to be able to sell tickets on the Internet - and increase frequency of service on main corridors as we get new rolling stock. Overall, investment of €2 billion to €3 billion is required over the next decade if the railway is to meet current demands and more if it is to expand to meet the growing expectations being placed on it. The railway will be competing for scarce national resources and available funding must be prioritised and targeted.

The committed and anticipated investment will permit a major expansion of the passenger business market. We are planning to grow volumes from their level of 34 million per annum to 44 million within five years with significant growth projected in both the Dublin commuter market and the prime Intercity routes. The improved railway product, population growth and congestion problems on urban and interurban corridors will fuel this growth.

larnród Éireann can only fulfil this role if it is on a sound financial footing. While the sustained level of Exchequer capital funding has been welcome, account must also be taken of the current financial implications of the proposed expansion. As mentioned earlier, larnród Éireann is facing a critical financial situation in the current year. Costs have increased significantly, principally due to increases in staff numbers. This has arisen because of expansion of services, revised working arrangements and the enhanced capital programme. In 1998, prior to the investment programme and the new working arrangements, larnród Éireann staff numbers stood at 5,165. This has now increased by 885 to 6,020 and the increases can be attributed to: the investment programme - 340, new services - 90, new working arrangements to allow 5 day week - 375, and safety and training - 60. In 1998, the total man-days training was 10,000 which was totally inadequate. We expect to hit 40,000 annually this year.

The increases in staff numbers, implementation of national wage rounds, general inflation, fuel price increases and limited fares increases have all contributed to the financial situation now facing the company. Our wage bill has increased from €129 million in 1998 to €215 million in 2002. We have projected a financial deficit of €25 million for 2002 and if no action is taken this is projected to increase to €50 million within four years, assuming an increase in State subvention of 5% annually. The present level of operating subvention is €155 million. The board and management have been considering this critical situation and it is imperative that action be taken immediately.

larnród Éireann is a limited company, operating separately from the CIE holding company. CIE is obliged under various Transport Acts and the 1986 re-organisation of CIE Act to operate commercially. larnród Éireann is also bound by the Companies Acts and cannot continue to sustain losses of this nature and risk trading in a reckless manner. A combination of measures is necessary to address the situation. These can be summarised simply as follows: increased productivity and cost efficiency, significant fares increases, freight rationalisation and suspension of poorly used services. None of these measures alone presents a unique solution and it is clear that a combination of all options must be pursued. The company is continuing to improve productivity levels and implement cost efficiencies. A total of €6 million in savings is projected in 2003. The fares increase announced last week is welcome and will generate additional revenue of €5 million in 2003. The application of regular increases is essential to help finance ongoing payroll and other cost increases.

Rail freight is best suited to transporting bulk freight over long distances. In Ireland, the industrial configuration is not one of heavy industry and there is a strong concentration of movement in and around Dublin. Few firms are rail connected and most rail freight movements necessitate costly road transfers at either end. Volumes transported by rail in Ireland have stagnated over the past decade. larnród Éireann management has made every effort to maintain market share and retain businesses in a competitive market. However, losses are being incurred and must be addressed. Overall, larnród Éireann freight revenue for the current year will be €53 million and the net rail figure after allowing for the cost of collection and delivery is estimated at €21 million. Losses in the freight business have increased in the last few years and are forecast to reach €14 million this year. The situation has been exacerbated by the closure of IFI with an annual loss in revenue of approximately €4 million. A plan has been prepared by management to increase the contribution of the profitable businesses and to withdraw from unprofitable businesses. Should the plan be implemented net rail revenue would reduce from this year's forecast of €21 million to €10.1 million in the first full year of operation, growing to €12.5 million by 2007. As a result the profitability of the freight business would improve from a loss of €14 million this year to a positive contribution of €2.25 million by 2007.

Business levels throughout the network are heavily influenced by demographics. Increased urbanisation has dictated that passenger business is heavily concentrated around Dublin and on the primary interurban routes. This is reflected in the current usage of the rail network where volumes in the Dublin area and on prime interurban corridors are growing while volumes are low and static on secondary routes and branch lines. In 2001, larnród Éireann carried 10.8 million passengers on intercity routes and the percentage breakdown of revenue by route is as shown on the graph. The bulk of the revenue is generated by five routes as illustrated. There are approximately 30,000 journeys per annum on the Limerick Junction to Rosslare line yielding annual revenue of €100,000. The Limerick to Ballybrophy line is also lightly used with approximately 35,000 annual journeys yielding revenue of €200,000. The annual loss incurred on the Limerick Junction to Rosslare line is €3.6 million and the loss on the Ballybrophy line is €1.8 million. The track and associated infrastructure is in poor condition, speeds are low and the trains used date from the 1960s. Major capital expenditure is required to upgrade the lines - up to €70 million on the Limerick Junction to Rosslare line and €30 million on the Ballybrophy line.

There are major demands for capital investment throughout the rail network. Priority has to be given to the busier lines where demand is greatest and better returns on investment can be achieved. These lines have a low revenue base and high on-going losses and consequently the proposal to suspend services on these lines was made.

The board of larnród Éireann was presented with the measures necessary to address the financial crisis at its October meeting. The board approved a package of measures and these were submitted to the main CIE board at its November meeting. At the request of the Minister for Transport, the board deferred a decision pending the outcome of the strategic rail review. There may be other issues which the Government may wish to take into consideration based on the review recommendations. However, losses are still being incurred and cannot be sustained by the board and corrective action is necessary.

It must be understood that larnród Éireann has based its proposals on fundamental business principles and in the interests of financial stability. The measures proposed are just one element of a package of measures to improve financial performance and develop the role of the railway in Ireland. Others will include fares increases, increased State subvention, cost efficiency measures, targeted investment and a substantial 30% growth in volume from 34 million passengers in 2001 to 44 million in 2006.

I thank the Chairman for the opportunity to make a presentation and we will be happy to take questions from the committee.

Thank you, Mr. Meagher. I have one question on those figures. On the suspension of poorly used services, would you agree that the shortfall in numbers and the financial losses are largely attributable to the fact that, as you have said, the rolling stock is very old and unattractive, there is only one train per day in many cases and, for many people, it goes at the wrong time of day? In general, with a bad service and poor rolling stock, one will not attract people to change from their comfortable cars to the railways.

Mr. Meagher

Yes, as I said, the rolling stock is old and the service is limited. Even with an enhanced service, with more than one train during the summer period, the loadings are still poor. Once we reach September, we withdraw the extra train because there is no demand for the service. We have concentrated our resources where the demand exists on the other lines.

Would you agree that demand would increase if there was a good, modern and efficient service with new rail cars and other improvements?

Mr. Meagher

There are seven bus services on that route which, I believe, are doing reasonably well. We are targeting our investment in rail cars and other new resources on the routes on which we expect to get the best return. We consider that the routes other than the one referred to will give a much better return.

I thank Dr. Lynch, Mr. Meagher and their colleagues from Irish Rail for attending this meeting at short notice and for their presentation. The Limerick-Waterford route is a prime example of direct competition from bus services. However, is it not one of the roles of the board of CIE to ensure there is not competition between the services of Bus Éireann and Irish Rail? Would the witnesses agree that the delay of an hour at Limerick Junction is a disincentive to use of the train service? People wishing to travel back and forth between Limerick and Waterford in one day have only a stay of two hours in Waterford. No airline hoping to remain financially viable would run a service on that basis. A service departing in the morning and returning in the evening would be much more attractive.

I have two questions on the presentation. In relation to suburban services, the focus was entirely on Dublin, ignoring the urgent need for suburban services elsewhere in the country. For example, a Clonmel to Waterford service would appear to be an economically viable proposition, but yet there is no service. It has a similar population base to that of the Cobh-Cork service. My colleague, Deputy Hayes, has drawn attention to that issue.

With regard to the savings projected by 2003, based on the recommendations to the board of CIE, my estimate in that regard is approximately €26.4 million, including the fare increase. However, the company is projecting a loss of €40 million in 2003. The point was also made that, following a request from the Minister for Transport, the board of CIE has deferred a decision on the freight issue and the closure of lines, pending publication of the strategic rail review. Why, then, is Irish Rail closing the Sligo to Limerick line and removing the tracks at both ends of Athenry station while a similar connection in Athlone, on the line from Mullingar which is already closed, is remaining in place? However, no provision is being made for signalling and the line at Athenry is being removed. It seems contradictory to take up the tracks at a location where there is an open line while leaving them in place where there is a closed line. That would appear to be contrary to the policy decided on by the board when it considered the recommendations.

The figures we were given are based on a projected annual increase of 5% in fares over the next four years. Has the company received a commitment from the Minister for Transport in that regard? What is the backup situation if that increase should not happen? When the company brought to the attention of the Minister the difficulties in relation to financial overruns, what was his response? When were the proposals for reduction in freight services first brought forward to the Department of Transport? That is vitally important.

There has been significant investment in freight services, including approximately €1 million at North Wall, €2 million at the Ballina depot and €4 million for the pocket wagons. Why was investment spent on the rail freight business when it was unprofitable and when the board of Irish Rail was considering winding down that service? What is the explanation for failure to complete negotiations in relation to the development of services with Coca Cola from Ballina to Drogheda and with Coillte Teoranta from the west of Ireland to Waterford, for which I understand there is capacity for five trains per week currently? An additional service requested at Norfolk Line has not materialised to date. In relation to kegs, I understand the current proposal is to transport them by road for the foreseeable future, rather than by rail. That will lead to the closure of approximately ten freight depots around the country.

With regard to the Ballybrophy line, the Buchanan report, A Land Use and Transportation Study for Limerick City, identified a need for extra capacity between Limerick, Cork and Dublin. The two options put forward in that study were to double-line the service between Limerick and Limerick Junction or to upgrade the Ballybrophy line. I believe it would be much cheaper to upgrade the Ballybrophy line than to install a second line from Limerick to Limerick Junction.

A figure of about €100 million was mentioned for upgrading the Ballybrophy line and the Limerick-Limerick Junction-Waterford line. Would it not be considerably cheaper and facilitate the retention of those lines in the short-term, if the material being taken up on main lines, where continuously welded rail is being installed, could be used on the lines to which I have referred?

Mr. Meagher will reply to most of the questions and I will deal with two matters concerning the Minister and the Department.

Mr. Meagher

With regard to the role of CIE in relation to competition between bus and rail services, that is a fact of life on all of the rail lines. That policy applies in all cases, whether it concerns Dublin-Cork, Dublin-Limerick, Dublin-Galway or wherever. On the potential of the Clonmel to Waterford service, I met the members of Clonmel Urban Council two years ago to discuss that. They asked us to put in a service to link with a fast service to Dublin. That is where they saw the best potential. I did not have the resources then to provide a rail service but I agreed to provide a bus service at the appropriate time that would link at Limerick Junction. It was available for some time but there was not enough demand to sustain it. Demand was very limited.

We are projecting a loss of €40 million next year. Efficiencies and so on should lead to savings of €6 million and we will get €5 million from fares. There are, however, cost increases because the benefits of implementing the rationalisation of fares and the suspension of lines will take time to appear and costs are incurred through voluntary severance packages. We must do it because if we do not take these actions, losses will increase to more than €50 million in three or four years time. We must bite the bullet or the company will be in a difficult financial situation.

There have been no services operating north of Athenry on the Sligo-Limerick line since 1997. We are currently resignalling the Dublin-Galway lined and we took the view that we should resignal it in the most cost effective way possible. The strategic rail review is looking at all rail lines or potential lines and if it is decided that the line north of Athenry up to Claremorris should be opened, very significant investment will be needed. At that stage we could install the necessary connecting equipment at the junction and it would not be any more expensive than installing it now. It made sense to carry out resignalling in the most cost effective way.

The freight business has to be profitable. We went to our customers to negotiate rates that would make the business profitable but we were unsuccessful because we are not competitive in certain areas. It was not possible to negotiate satisfactory rates with Coillte to carry the freight and that was the case with some of the other businesses that were mentioned.

The Ballybrophy line, as part of the Limerick-Dublin line, was mentioned. The service from Dublin to Limerick we have been developing runs via Limerick Junction. We have renewed the line between Limerick Junction and Limerick. We have not doubled the line but we have renewed it and the signalling. We saw that as the most cost effective way to link with Limerick and we did not see any necessity at this stage to double the line. We have added a number of direct services from Limerick in recent years and we do not see this as essential. We are reviewing how best we can provide more frequent services to Cork and Limerick all the time. The key limiting factor is not so much the Limerick Junction to Limerick line as the capacity that we have immediately outside Dublin at this stage. That is where we must act first to enable us to provide more frequent services to all lines.

The Minister knew about the losses when he came into office. Previously the executive had talked to the Department but it was not specifically about Mr. Meagher's problems with lesser used lines and freight, it was in relation to an overall price increase. Recently the Minister has granted the price increase. It is not enough, particularly in relation to the DART, but we asked for an increase of 10% and we got 9% so it is not a bad result.

Mr. Meagher

Deputy Naughten raised the renewal of the lines and asked if we could use second-hand materials. We have to be careful to ensure adequate safety and much of track we are removing from various lines is between 50 and 100 years old and it would be impossible to use it anywhere. If we were to renew track, we would not put absolutely new stuff in, but it is still extremely expensive, in the order of €400,000 a mile for renewal of the Cork line.

I thank Dr. Lynch and Mr. Meagher for making the presentation. I was struck by a comment made by Mr. Meagher in reply to Deputy Naughten's question about the absence of services. He replied that there are bus services on the route. Michael O'Leary would never say in a million years that Aer Lingus runs another service on a route and neither would Aer Lingus give such a reply in the present climate. Both companies have shown they can compete with each other and thereby increase the level of business generally, while bringing prices down. Perhaps the break up of the CIE group will be a good thing if it will lead to vigorous competition between the companies and serious effort being made by each to corner the market for itself.

I was surprised at the announcement of the proposals to reduce rail freight and close a number of lines given that Dr. Lynch said in September there were no plans to close lines and that position was reiterated by the Minister. It is outrageous that announcements are being made about proposals to cut back severely on freight business and to close lines prior to the publication of the national spatial plan and the strategic review of the railways. We all assume that contained in the long overdue national spatial plan there will be major proposals for national transport services. When we talk about inter-city services we do not just mean Dublin to Cork or Galway, but Cork to Limerick and Limerick to Galway. It is incredible that decisions would be taken by Iarnród Éireann to cut back on services and pursue a policy of retrenchment at a time when we are looking for development of public transport services. I accept that the company is operating in a difficult climate where there is no clear strategy at ministerial or Government level for the development of railway services.

Not only is there no strategy in that regard, there is no strategy for spatial development. As a result there is over-intensive development of the east coast while many rural areas are denuded and run down in infrastructural terms. There are difficulties for CIE operating in a climate where there is no clear direction being given by Government but, on the basis of the promise of a national spatial plan in the near future, it is incredible that Iarnród Éireann attempted to take these decisions prior to the publication of the plan. I am glad the public outcry has led to its being asked to defer the decision.

On what basis were decisions made to reduce services? I would have expected that a company charged with running the railways, one that has been given considerable additional resources in recent years, would have a clear vision for development of services. From reading the published material and listening to the presentation today, however, I get no sense of the company having a vision of how services can be developed outside the eastern region.

A conservative approach to freight services is being taken. Business has been reduced in recent times, and the closure of IFI certainly caused difficulties, but there is no impression that new business is being sought. What attempts have been made to develop new business outlets? What research has been carried out in respect of companies that have a need for freight services? What proposals, if any, have been drawn up to meet the demand for services?

While it is difficult to assess the cost-benefit analysis of rail freight over road freight, have any studies been carried out in that regard? Ideally the Minister should conduct such a study. We need to know the overall cost benefit. We all have opinions about the environment, road safety, efficiency and damage to the national road network caused by the overuse of HGVs in carrying freight. On balance, we would all come to the conclusion that it must make sense to carry freight by rail. Has such a costing ever been done? If not, we should, as a committee, encourage the Minister to conduct such an investigation, because we do not know the overall costs. There are many external costs involved in road freight which I have factored in. It would be appropriate that such a study would be carried out prior to any decisions being taken on the reduction in services.

Perhaps Dr. Lynch would inform us with regard to the meetings he had with the previous Minister in this regard. How often did he meet her to discuss the difficulties being faced by the company? The prospect of a loss of over €14 million on the freight business did not emerge overnight. Were proposals for the development of the business drawn up in recent years? What assistance did he request of the Minister and what was the Minister's response?

On the question of a subsidy scheme for businesses opting to use rail services to carry freight, it appears to be standard practice in most other European countries to require such subsidy schemes. Official EU policy dictates that 30% of freight should be carried by rail. To give effect to this policy, several EU states have introduced tax breaks and other direct grants to encourage and promote the use of rail freight. Of these, Britain, Denmark, France, Germany, Austria and Switzerland have active polices in terms of encouraging the use of rail for the carriage of freight. What discussions has Dr. Lynch had with the Minister in this regard? Did he put forward concrete proposals to the Minister or did he submit such proposals to his predecessor? If so, what has been the response?

There has been much criticism from different quarters about the company's failure to market passenger services on the lines in question effectively and to arrange those services to meet demand. A number of examples have been circulated to Members regarding the problems that arise and the reasons people do not use the services. For example, the 6.30 p.m. Dublin-Rosslare Europort train service arrives the ten minutes after the departure of the ferry to Pembroke and ten minutes before the Fishguard boat leaves. It is no wonder people do not use those services.

I understand the national spatial strategy will involve concentrating development around major cities outside the eastern region. If so, I presume there will be an emphasis on linking Waterford with Limerick and Shannon. There is evidence of a demand for that service. Waterford Chamber of Commerce is so in favour of it that it offered to provide the company practical assistance in marketing the service. However, its offer was rejected. What efforts has the company made to develop new business along those lines?

To what extent has the company researched timetabling arrangements and has it experimented with new timetabling services to facilitate people to meet ferries and access Shannon Airport? In light of the major difficulties experienced by people travelling from the south-east to Dublin Airport - when they arrive in the city they spend two to three hours trying to cross it - there is an attractive option looming in relation to services out of Shannon. It could make sense for people to use services out of Shannon and also to develop business in the Shannon region. What research has been carried out into the potential for developing business there?

What was the rationale behind the work carried out at Athenry junction? That work has caused much concern on the western seaboard. Will the officials clarify that notice was given, as stipulated under the Transport Act, 1958, of the intention to sever the line?

While there are excuses for the manner in which Iarnród Éireann has operated in the absence of a national strategy on transport, the company needs to convince the committee of its interest in developing a vibrant railway service throughout the entire country. The indications so far are that the company is reducing services in order to remain within a limited budget. The committee would welcome the company having expansion plans and outlining to Members and to the public its case for increased funding for rail services in order that we can arrive at a sustainable transport policy to serve the entire country.

Mr. Meagher

In terms of the general development of services, at present we are carrying record numbers of passengers on both the intercity and suburban networks. As stated earlier, we are carrying 34 million people which is more than was ever previously carried on the railway.

I accept that. We are not talking about suburban services.

Mr. Meagher

Taking the intercity service, last year we carried 10.8 million passengers. We only broke the barrier of eight million passengers in 1997. Business on all rail lines out of Dublin has grown significantly in the past four years and we have improved the services on offer. We have changed the frequency on a number of routes and have focused efforts and investment where demand exists.

The Deputy inquired about the 6.30 p.m. service on the Dublin-Rosslare line. That service did meet the ferries at one point and use of it was very limited because Rosslare had become a drive-on, drive-off facility. Ferry departure times changed and we tried to alter the timetable of our service, with the result that we discommoded about 97% of business people who boarded and alighted at places such as Wexford and Enniscorthy. The time came when a decision had to be made in terms of whether we should continue to serve the ferry or to serve the needs of passengers travelling to and from Wexford, Enniscorthy, Gorey and Arklow. From a business point of view, it was better to do take the latter course.

The Deputy referred to bus services. While we compete on certain routes, we try to combine services in the best way possible. Given the level of demand, it was thought appropriate to provide a bus connection to link with the ferry in question.

In regard to developing the Waterford-Rosslare line, the services there connect with the ferries but demand is limited because it is essentially a drive-on, drive-off facility and there is not a high proportion of foot passengers at Rosslare. As I said——

Mr. Meagher is talking about developing that line, not just——

Mr. Meagher

I met with councillors in Clonmel to see how it could be developed. I tried to meet their primary demands for a coach service to meet the service from Limerick. I also tried to discover the demand as we could not provide a rail service at that time. There was little demand.

Has research on demand been done?

Mr. Meagher: Not only was demand researched but we put on the service and advertised it.

In this day and age, people will not get on and off trains and onto buses. What demand would there be if there was a rapid rail service, for example, to Shannon Airport or for people working in the Limerick region?

Mr. Meagher

The demand on that route is much slower than on any other route.

Has any research been done?

Mr. Meagher

It is based on the numbers using the route. There is no doubt that demand on the radial routes is much greater. That is where we believe investment should be focused at this stage.

There were a number of other questions.

Mr. Meagher

Within the freight department, there are a number of people trying to market the business, trying to get the rates required and trying to get new business. New bulk businesses to which rail is suited do not come along very often but we try to get them when they do. One example is the Lisheen mine mineral ore business which Iarnród Éireann tried to get. An investment of about £6 million was needed to get the product to the rail line but that money was not available. That put Iarnród Éireann out of the market from a competitive point of view because road vehicles were able to move directly from Lisheen mine to the port. Iarnród Éireann had the connection but could not compete and that is a fact of life.

What discussions have there been with the Minister over the last two years about the freight business and what proposals have been put regarding State subsidies?

At the beginning of the year when the CIE finance committee got the budget, it asked the management of Iarnród Éireann to look at its cost base. There are two ways to run a business; one is to increase prices and the other is to reduce costs. In this case, Iarnród Éireann had to do both and it was not until——

That strategy did not work for Aer Lingus. A very different strategy has worked very well.

I cannot comment on Aer Lingus as I do not know the detail of its operations. I am giving the committee the details I have on CIE and Iarnród Éireann. Iarnród Éireann believed that this would lose it a lot of money. As I explained, it is a limited company and it is incumbent on the directors that their company does not become insolvent. If losses were allowed to continue for the next three to four years, the company would be totally and irrevocably insolvent. The duty on the directors is to ensure that does not happen.

I also explained that the duty of the board of CIE is such that it must ensure that the costs of subsidiaries do not exceed revenue, as was happening in this case. The executive of CIE, on behalf of the three companies, went to the Department in July to request a price increase. When the new Minister came in, I went to see him. He told me to leave the matter with him because, as a new Minister, he had to consider whether the various problems I outlined were real. He sanctioned a 9% increase this week.

The strategic rail review covers the next 25 years. I have not seen it but it does not take a rocket scientist to work out what will happen. The cost of staying in our existing position or developing services where there are major conurbations will be huge. I do not know if any Government will commit itself to that investment in the coming years. Iarnród Éireann and CIE may have to look at different ways of funding it, although that is not certain.

With regard to the spatial strategy, I am only concerned with CIE. I have fiduciary responsibility for the company, as laid down by the Companies Acts. I accept that the Minister must look at a broader picture but that is not to say that I must. That is not Mr. Meagher's or my brief. It is fine if a national spatial strategy changes the ball game. In that event, the Minister will write to direct me. That is fair enough but, in the meantime, Mr. Meagher and I can only run with what we are given by statute.

Has CIE made proposals for State aid for the use of rail——

As Mr. Meagher has said with regard to State aid, we get €155 million as a——

I am not talking about that.

I am trying to reply to the Deputy's question.

The company does not get subvention for its freight services. Is that correct?

If the Deputy would let me finish, she can then draw her conclusions. The company gets €155 million in subvention. It is not earmarked for rail, passengers or freight services. Out of that sum, there will be a loss of €24 million this year and the company must sort out that problem. There will be problems if it is decided that a certain amount of that funding must be earmarked for freight. The company gets just one envelope.

I want to clarify this point. We are talking about the stated EU policy of a shift from road to rail. Many other EU states have specific strategies in place to encourage that shift by way of tax breaks or direct grant aid. Has CIE put any proposals to the Minister for Transport for a similar scheme to encourage that kind of switch?

No. As Mr. Meagher said in his opening statement, freight is predicated on long distances and on heavy industry. Ireland does not have heavy industry or long distances. The countries the Deputy is talking about - Germany, Belgium and others - have long distance freight. The most profitable rail freight company in the world is in Russia, where it carries timber from Murmansk to the Black Sea. We do not have such long distances here.

I will ask other Members to be as brief as possible.

I welcome Dr. Lynch and his team.

We met before in a less tense atmosphere.

I raised three or four years ago with the CIE team the question of facilities for people with disabilities on the DART line. I use the DART on a regular basis as I have no choice other than walking. There are no facilities for people with disabilities. For example, a wheelchair user at Howth Junction must go nearly a mile from one side of the station to the other. I was assured three years ago that this would be sorted out shortly but no progress has been made.

Another problem on the northside is the provision of park and ride facilities. Did CIE have discussions with Dublin Corporation or Fingal County Council with regard to sites for park and ride facilities? Residents are being greatly inconvenienced at Howth Junction and Raheny and are abandoning their cars. It is a major safety hazard and a great inconvenience to residents. At about the same time, many people were attacked at Howth Junction DART station, particularly on winter nights. There were no cameras there and to date none have been provided, despite assurances that would be done.

The members of the delegation should encourage their staff to be more customer oriented and they should be given more in-house training. I have seen people purchase tickets at DART stations with no word passed between the ticket seller and the customer. Customers have ended up on the wrong platform, when they should have been told the time of the next train and the platform at which it will arrive when getting their tickets. This would help to give a good perception of the company, which is necessary.

I did not intend to insult Deputy Brady, but after the mini-CTC inquiry, I did not expect to see him again or maybe that was what I was hoping. I may not have answered the question specifically earlier on, when Deputy Shortall said we had no plan. There is a plan, which will cost €1.5 billion in the next few years. It will be predominantly for new carriages, new rail tracks, new stations within a 50 mile radius of Dublin and on intercity lines. It will also cover the development of a commuter service in Cork up to Mallow, where we have a station. I apologise to Deputy Shortall, for not answering her question about Shannon. We are still grappling with that problem. We are considering Limerick to Shannon and on to Ennis. There is a significant problem trying to get the details out.

We will put considerable effort into the DART. I would not want anybody to think this was because of the articulate and wealthy people who live alongside the DART - some of whom are constituents of Deputy Brady. We have doubled capacity in recent times. There are only two tracks along the seashore. With only four carriages, when the DART was extended to Malahide, once a peak time train reached Harmonstown or Raheny, passengers could hardly get on it. The same was true with the extension to Greystones. We then made every train six cars long and we now have to go to eight cars, which is quite a long train. This means that every station's platforms have to be extended and that is only the start of it. The big problem will be signalling, which will require considerable work, much of which will need to be done at weekends. Although there may be some resistance to us not running at weekends, ultimately that will be to the benefit of everybody. If we do not do it, we will have the same complaints as when we put on six cars and people still could not get on.

The issue of access to disabled people will be addressed when we carry out this major project, which is costing about €150 million. This will start next July and will continue for 18 months.

Mr. Meagher

As the chairman has said, that project will require considerable work at virtually all DART stations. We intend to ensure that all DART stations fully comply with the regulations for catering for people with disability in that programme to be implemented during 2003 and 2004. That money is now nailed down, so that will happen.

Park and ride is difficult for us because the space available to us is very limited at a number of stations. We are extending where we can and we are negotiating with local authorities, the churches and any place that has some parking close to stations to try to find extra space at stations. The upgrading of Howth Junction, which is necessary, will be very much part of that DART project. I will check out the issue of CCTV which Deputy Brady raised.

We are enhancing our staff training all the time. In my presentation, I mentioned that training was totally inadequate in Iarnród Éireann a few years ago. For a staff of between 5,000 and 6,000, a total of 10,000 man-days of training was totally inadequate. We have increased this to 40,000 with the emphasis in the first instance on safety training that was essential. We now move on to widening the training programme to include customer oriented training and that will be done across the company.

Are there any plans for an additional station on the DART line?

Mr. Meagher

The most immediate one is at Grange Road, just north of Portmarnock.

Under one of the tax Acts, there are provisions to encourage people to park and ride. Unfortunately we cannot provide it for nothing. Dun Laoghaire-Rathdown County Council charges people to park in the car park opposite Dun Laoghaire DART station. So the cute people go to Booterstown, where they can park for nothing in our car park. We think we should charge for park and ride and I encourage developers to come in to do the same. When I mentioned this to the Minister, Deputy Brennan, he told me to take a hike.

It is done extensively in America.

I welcome the representatives of the company and thank them for the presentation, which can only be described as a startling report. I note from Dr. Lynch's opening comments that some things never change in that company. When he referred to the fact that the details of this document came into the public domain by way of a leak, that is nothing new. I have no doubt that is one of the flourishing aspects of that company. It was always good at leaking, spinning and undermining people within the company. That needs to be addressed, because it is unfair to the company, the workforce and particularly to those who are at a loss as a result of these proposals to find this information in the public domain before it has gone through proper procedures.

It is obvious that CIE and its subsidiary companies are in a never-ending crisis. The company is in turmoil, struggling with crippling losses and indebtedness. For various reasons the company is unwilling and indeed unable to restructure itself from within on its own initiative. I welcome the comments of the Minister, Deputy Brennan, in relation to restructuring the company and I hope he will have some success in that regard. The company has shown it is dogged by internal conflict and in that respect nothing has changed.

By its own admission and particularly by the presentation of this document today, Iarnród Éireann is effectively saying it is no longer in a position to fulfil its national mandate. It is saying that the concentration of its development programme will be on suburban services and certain profitable intercity routes. That is an abdication of its responsibility on a national basis and it is an issue that must be raised at national level by the authority that matters - the policy-makers - the Government. Under the proposals it is clear that some of the provincial services are to be amputated and abandoned.

I understand that the company is making these decisions because of its financial plight but it must be recognised that this policy will have enormous social and economic consequences for numerous towns and communities throughout provincial and rural Ireland. If the committee will permit me to be parochial, towns such as Roscrea and Nenagh, where I attended a public meeting last night and where significant concern is being expressed about the closure of the Ballybrophy to Limerick line. It is obvious there is a demand for the services operated and that people are willing and prepared to use rail services. However, they are only prepared to use them when they are given a proper and adequate service. The reason why the Ballybrophy to Limerick line is losing €1.8 million each year is because the line has never been upgraded. We do not have a proper line or rolling stock. The public of the area will use that service and make the line profitable if we have a service which is frequent, reliable, punctual, safe and comfortable. If one uses that train today, one is lucky to be less than an hour late. It is a slow burning train and it is not practical for people to use it to the extent that they would wish to. Therefore, it is not the case that the demand is not there, it has never been tested because we have never had an adequate service. It is a cop-out and an easy solution for the company to decide it will close the line because it is losing money. I do not blame the company. I understand it has been backed into this situation, but it must be more positive and forward looking in its approach.

The National Roads Authority is spending billions of euro implementing national Government policy, which allows motorways to be expanded but surely it is illogical for this to happen on the one hand while, on the other, people and freight are being removed from the railways and put on the roads. The company should be articulating its demands and requirements. That should be outlined and choices proposed so that it is ultimately up to the shareholders - the Minister and the Government - to provide services through their agents - in this instance Iarnród Éireann. It is important that the company does not have a fatalistic approach and does not take it for granted that the Government will not provide the resources necessary. I would like to see a detailed proposal put to the Minister, brought before Government and allow it to decide, as it did with the NRA, when it prioritised projects and identified the infrastructure that was required. The company deserves that opportunity and I hope it will progress on that basis.

I do not necessarily disagree with Deputy Lowry. We must provide a safe and punctual service. One cannot do so if the track is a banger. It is a worry for us that it is not safe and that is the single most important criterion. The Limerick Junction to Rosslare line would cost between €45 million and €80 million and one must prioritise so from a revenue and capital expenditure stand point, that may not be the answer. However, that is the answer of an apparatchik. Someone will have to call a policy if they want to call a policy that takes a slightly broader viewpoint. We are boxed in because we do not have total control over prices - and that is fair enough - so we must always look at costs. We are boxed in by the Companies Acts, statutory bodies legislation and Transport Acts. All we can do is say that we do not regard lines as a priority in favour of other areas. There is limited money in the system but if we are told that is not Government policy - that is fair enough.

Like the previous speaker, I welcome the executives of Iarnród Éireann and CIE. The presentation we heard from Mr. Meagher is stark, particularly for rural Ireland. The policy of Iarnród Éireann as outlined by him is one of passenger service only, a suburban, Dublin-based service predominantly with intercity connections and nothing else throughout rural Ireland. That is the side of the coin which is missing from the presentation. It is clear that the company now has a policy of no-freight, passenger-only, gradual downgrading and closure of lines. That is unacceptable. Since the Minister and Dr. Lynch confirmed on 30 September there were no proposals for line closures, I would like to know when the board of Iarnród Éireann or CIE met the Minister and when was he advised of these proposals by the board? It sounds unusual that within two months of those statements being made, we had proposals regarding the closure of freight services and certain lines.

Has any cost analysis been done on the effect on the road system of the closure of the rail freight business? I am sure the executive will tell me it is not their business but surely it is the business of the single shareholder - the Minister - to be aware of the cost effect of any proposals coming from within his remit in relation to knock-on effects on other Government services. If not, is it proposed to carry out such an analysis?

In relation to the Limerick Junction-Rosslare line, it seems most unusual that before we heard these proposals publicly in relation to closure including this and Limerick-Ballybrophy, there was also a suggestion that the Gorey-Rosslare and another line would be closed. One would imagine that ports should be rail accessible. One wonders whether a company like Iarnród Éireann should be prepared to run a port like Rosslare Europort without any rail service to it. Has any consideration been given to the fact that Waterford port is the only one with additional capacity currently and that, in view of the expansion of the EU eastwards, a short link to Europe from the south-east will become more important in future? Was that question addressed before the proposal to close the line was considered?

Is it possible to establish, once and for all, what will be the cost of upgrading the line? We have been presented with three different figures in this regard. Mr. Meagher stated it would be €70 million and Dr. Lynch referred to figures of €45 million and €80 million. I agree with other Members that the actual cost would be far less than any of the three estimates provided. We are not asking for a main line service of a similar standard to that offered on the Dublin-Cork line. I understand that sections of track which have been removed from the main lines can be reused on lines that are being proposed for closure. This would greatly reduce the cost of upgrading such lines.

Is it any wonder this line has not been profitable? The carriages are 30 to 40 years old, and speeds - the average is approximately 35 m.p.h. - can be as low as 15 m.p.h. As Deputy Shortall indicated, timetabling is incredibly inadequate. There has been no marketing and no upgrading or replacement of rolling stock on this line. In those circumstances, it is highly unlikely that the service would be used by people. If an efficient, comfortable service was available, it would be supported.

With regard to freight service, what steps has the company taken in recent years to secure additional business on the Limerick-Rosslare line? For example, the transport of timber to Menite in Clonmel and to the facility in Waterford would appear to be ideally suited to rail freight service. In previous years, a huge quantity of beet has been transported from Wellingtonbridge to Mallow for processing. Under the Iarnród Éireann proposals, that will now have to be transferred by road and this will involve the use of up to 100 lorries per day. That increase in traffic will have a major impact on towns and villages across the south-east. What cost analysis has been carried out in relation to such transfers of freight from rail to road?

I support Deputy Shortall's comments on the issue of proposals by the board of Iarnród Éireann to the Minister in relation to tax breaks for companies that are prepared to use rail freight services. Such tax breaks are available in other European countries and, despite Dr. Lynch's comments, there is nothing to prevent the introduction of similar incentives in Ireland.

With regard to the proposal to abolish the CIE holding company, what proposals have been drawn up in respect of the 330 staff of that company? What arrangements will be made concerning their pensions and those of staff in Iarnród Éireann, Bus Éireann and Bus Áth Cliath whose pension schemes are also operated by the CIE holding company? What is the current status of the letter of comfort which was sent to all staff by the then chairman, Mr. Paul Conlon, in 1987 in relation to security and conditions of employment?

The marketing of rail services has been totally inadequate, indeed non-existent. Mr. Meagher referred to his meeting in Clonmel. What was sought at that time was a fastrack service from Clonmel to Limerick Junction and to Waterford. What was provided was a mini-bus service from Clonmel to Limerick Junction. This was simply inadequate and unacceptable and that is why people did not use it.

The Deputy has asked about 20 questions so far.

I have one final question, Chairman, which Deputy Shortall has already raised. Was notification given under the Transport Act, 1958, in respect of the situation at Athenry junction?

I will call two further speakers and I ask them to be brief. Deputy Glennon.

I join colleagues in welcoming the delegation. I have four brief questions. First, I note that customer revenue is €190 million and current passenger volume is 34 million. What proportion of those figures is generated through the Dublin suburban rail network? Second, the plan to increase passenger volume from 34 million to 44 million over the next five years indicates that there will be approximately 20,000 additional return journeys each day. Does the company consider that sufficient to meet the anticipated demand over the period? Third, is the company satisfied with health and safety standards on the suburban rail line, particularly at boarding points and in relation to overcrowding? Finally, in the section of the presentation dealing with the future, the time frame was rather non-specific referring to the coming decade and increasing track capacity by 75%. Will our guests elaborate on that aspect of the company's plans?

I welcome the delegation and, as this is the first meeting I have attended, I congratulate the Chairman on his election. Many of the questions I had intended to ask have been answered already and my remaining question may be somewhat parochial. At a meeting with some industrialists in Ennis this morning, I was informed that approximately 4,500 people pass through that town every day on their way to Shannon and Limerick. A great deal of work is currently being carried out on the Ennis-Limerick line, which, I believe, will finally be upgraded in 2003. In view of the fact that many road projects, including the Ennis bypass, will not proceed in the coming years due to financial circumstances, will Iarnród Éireann provide, when the Ennis-Limerick line has been upgraded, provide additional trains to specifically cater for people travelling to Limerick? As Deputy Shortall stated, there has been much discussion about the spur line to Shannon Airport. Such a line would have major economic advantages. I know a number of policy papers have been drafted on that issue, but have costings been carried out?

Regarding regional balance, does Mr. Meagher see any improvements being made on the Ennis-Galway line? Limerick and Galway are university cities and I am sure many people would use the line if it was marketed properly. Why was the Sligo-Limerick line closed prior to the publication of the strategic rail review?

It is wrong to say that this is a Dublin-based strategy. I accept that there are huge numbers of people on the east coast, but we must not forget that the significant investment has been made on the Sligo, Westport, Ballina and northern lines.

Why was the same level of investment not made on the line from Limerick Junction to Rosslare and Waterford?

I said the capital cost would be between €45 million and €80 million, Mr. Meagher was more specific when he said €70 million.

There is a big difference between €45 million and €80 million.

Perhaps the Deputy will let me explain the disparity to him. One figure is based on using the older equipment around the other lines, mainly to Cork, which would result in reduced costs. There would still have been major costs in terms of signalling. The other figure is based on——

The Dublin-Sligo line has been significantly upgraded without the signalling system being upgraded.

I think the signalling system is being upgraded on the Sligo line.

It has not been upgraded and it is in use.

With respect, safety is the most important matter in respect of railways and signalling is the key to this. I do not intend to end up in the Four Courts, with a garda on either side, having been responsible for inadequate safety. I will not take that risk. The risk on the line going through the Deputy's constituency is very simple.

It goes through a number of other constituencies.

The cost would be a maximum of €80 million, or €45 million using secondhand equipment. It is a considerable sum of money. At present, there are 35,000 people travelling on the line who, on average, pay €3.

I am slow to accept the disparity in those figures. I would like to see the detailed cost of upgrading that line to a reasonable standard. It might be significantly less.

I have no difficulty in supplying the figures to the Deputy. We are not Dublin based. The Deputy is correct with regard to a cost-benefit analysis - it is not our function to do it.

Would it not help the company's case if it did carry out such an analysis?

I am not responsible for deciding transport policy. I have told the committee that I am governed by the Transport and Companies Acts. Iarnród Éireann has to operate under particular criteria, it is someone else's responsibility to operate transport policy.

Regarding the holding company, staff and letters of comfort, a document - which we have not yet seen and which we will discuss with all staff - has been drawn up. Obviously no-one is going to lose their job and they will retain the current conditions under which they operate. The same applies to the area of pensions. I have not yet had major discussions with the Department, but I will do so within the next month.

Some Deputies shook their heads when I referred to the cost-benefit analysis. They would be quite surprised about the number of trucks we would be putting on the road. That number will not be as high as they believe.

Will Dr. Lynch repeat what he just said?

Deputy Shortall made the very valid point that there would be more trucks on the road. Mr. Meagher will explain that there are not as many trucks coming on to the road as one might believe. A total of 65% of all freight comes through Dublin Port. Of that, 60% moves within 50 miles. If one is an industrialist, why would one use a train to move one's freight 50 miles because, at its destination, it would have to be transferred to a truck and transported to the factory? I am chairman of a cream liqueur factory in Abbeyleix, 60 miles from Dublin. I have inquired why the company does not use trains to transport goods. I was told that the goods are put on a truck which goes straight to Dublin Port. Why would the company change its method of operation when, with loading and unloading, the freight would have to be handled more often?

Will Dr. Lynch indicate whether the board of CIE or Iarnród Éireann met the Minister since he came into office in order to discuss this problem?

No, we have not met him. The Minister is meeting the subsidiary boards the week after next and the main board the week after that. When the board of CIE was considering these proposals, he indicated to me that we should make no decisions until the strategic study was released. It is anticipated that the study will be released in a month.

Are those meetings held at the request of the Minister?

They are not held at the request of the boards of CIE or Iarnród Éireann?

The CIE board has been going about its business, as required under the Act.

Mr. Meagher

I wish first to respond to some of the points raised by Deputy Healy. It is well known that Iarnród Éireann suffered massive under-investment through the 1980s and 1990s. In 1998 we discovered that we had a massive amount of work to undertake. We have concentrated on investing in safety on the intercity routes in the last four years. Half of our carriages are over 30 years old. A great deal of work remains to be done over the next four or five years to attain the level at which we should be.

Renewing lines is not just about renewing track, there are many other elements such as bridges, fencing, level crossings etc., which must be taken into account. There are 2,000 level crossings on our network. There was little or no investment in level crossings for many years, but conditions near the crossings have changed with the result that we need to upgrade 600 of them. This alone will cost €100 million. There are many level crossings on the Limerick Junction-Rosslare line and we had to prioritise.

The tracks on the radial routes from Dublin are virtually renewed and we are working on the signalling. The programme over the next few years will focus on signalling and getting rid of the old carriages. If we are to develop the business it is vital that this happens.

We are not abandoning rail freight; there are elements of the business we plan to keep. Our exit from a particular area of the freight business will mean that additional 150 vehicles will be brought on to the roads. We estimate that will represents an increase of approximately 1.5% of the national truck total of 10,000.

Members referred to the timber business. We had a good business in this area and we were obliged to make it profitable but this was not possible. The length of journey required to make it profitable was not available. That is a fact of life, but we would have preferred it if matters had been different.

Of 34 million customers last year, 11 million travelled long-distance on intercity trains and a total of 23 million travelled on the DART and Drogheda, Maynooth and Kildare suburban lines. The revenue generated by those trains was approximately €30 million. We plan to raise the number of passengers from 34 million to 44 million, with the major part of this increase in the Dublin suburban area. We are considering increasing our peak capacity by 75%. We are planning to do that by increasing the capacity on our trains. We have moved from four car DART trains, capable of carrying 600 people at peak, to six car DARTs, capable of carrying 900 people at peak times. We expect to be able to carry about 1,200 people per DART train when we put our next project - eight car trains - in place. Unfortunately, DART trains will not become more frequent because we do not have enough slots in the system. The maximum number of trains we can currently operate through the centre is 12 per hour. Deputies should remember that we have only one line that runs through Connolly and Tara Street stations. When the eight car DART project is completed, we plan to increase the number of slots 12 to 16.

There is a mixed bag of rolling stock on the Maynooth, Drogheda and Arklow lines. There is a mix of modern rail cars purchased in recent years and old conventional trains that are not suited to suburban operation because of slam doors and capacity limitations. A purchase order for 80 railcars is in place. These cars will come into service in the middle of next year. We want to ensure that, at peak times, the key trains on those lines will have eight cars and be capable of carrying approximately 1,200 people. Capacity will increase as a result.

Taking those two measures together, we expect to have increased our peak capacity by 75% by 2006. That does not mean we will carry 75% more passengers. We are catering more than adequately for off-peak demand and we are trying to develop that. We believe we will cater reasonably well for the peak period to 2006. We have plans for further development to 2010, when critical issues will arise. When the number of slots has been increased and the capacity of the trains have been maximised, that will be as much as we will be able to do unless other avenues are opened to provide service through the centre area. We have a proposal to open a station at Spencer Dock which would provide another terminus. In the long-term, we will have to find the funds to build some kind of connector tunnel to open the access into the central area. Our plans will meets the demand in the coming years.

We are also considering increasing our service on the intercity lines. As we replace the old rolling stock we will put a mixture of new carriages and railcars in place. This will provide increased frequency on a number of lines. As the work on the track is completed it will allow trains to increase speeds. Improving the service in that way will increase the number of passengers on those lines.

The presentation referred to track capacity, rolling stock and increased slots, it did not refer to additional tracks. Are there any plans——

Mr. Meagher

There is a real bottleneck coming out of Heuston Station in the evenings. The demand is for the intercity and commuter trains to operate between 5 p.m. and 7 p.m. We only have two tracks and we cannot cater for the demand. We have plans to add to track capacity between Cherry Orchard and Hazelhatch.

I was asking about the line I use.

Mr. Meagher

The next measure is to increase the size and number of trains that can be operated at peak periods.

Mr. Meagher has spoken about demand on existing lines. There is huge demand in the west of the city, from areas such as Blanchardstown. The situation is similar in Cork, where people want the line to be extended from Cobh to Midleton. There are tracks there and we are looking at areas where demand is increasing significantly.

Mr. Meagher

We are satisfied that there is not a safety issue on the trains, which are designed to carry the peak loads, with a mix between people sitting and standing. That is a feature of all suburban systems. The central stations are key stations, if there are particular problems with the service we will limit the number of people that have access to the stations. A major part of our project for the DART in the next two years is to increase station size, the length and depth of platforms and improve access and egress. We will meet the most up to date health and safety requirements in doing that.

What about the Shannon Airport spur?

Mr. Meagher

We are currently upgrading the Limerick-Ennis line, which was in a bad state. The work will be either completed or be very close to completion by the end of next year. We intend to improve the level of service on it and we see it as a line that might be appropriate for the operation of a railcar with an improved frequency. The potential of the Ennis-Galway line is being examined by the strategic rail review.

The Sligo-Limerick line has not been closed. There have been no services on that line north of Athenry since 1997. We approached the re-signalling in the most judicious way from a cost perspective. We have to minimise costs and do the job properly. Significant investment is needed if we are to provide services on the line north of Athenry, which would include the junction. It makes sense to do it at that point, rather than incur the cost now.

What about the Shannon spur?

Mr. Meagher

That will be examined in the strategic rail review. We acknowledge the demand that could arise there. Of necessity, we have concentrated on the existing network - we have to bring it up to modern standards. Independent reviews highlighted the need for that. We have made a lot of progress on track improvements in recent years, that has been acknowledged by everybody. We must continue that progress and modernise our fleet. Other possibilities exist. We have had a great deal of discussion about the Limerick Junction-Rosslare line. People believe that the Limerick-Ennis link, the Shannon Airport spur and other links around the country have potential and we must ask whether they should be reopened. The purpose of the strategic rail review was to review these and prioritise them.

What is the position with regard to the Limerick Junction-Rosslare line?

Mr. Meagher

If there is a demand for a service, investment will have to be made on the entire line.

I also welcome the delegation. Passenger numbers have risen by 16% while the associated staff growth in the same period was 13%. That seems significant and I would be concerned - particularly in terms of the comments about expecting an increase in productivity as part of rationalisation - if the company was obliged to increase staff numbers in order to encourage passenger growth. I would like some clarification on that.

Deputy Lowry referred to the 35,000 customers that used the Limerick -Ballybrophy line last year. In light of the poor service and quality of carriages on that line, I am surprised 35,000 passengers have used it. It is an integral part of the Limerick-Dublin service. There is only a single line to the junction and that is something that needs to be considered.

Does Iarnród Éireann have any plans for dealing with special events. I used the train to travel from Cork to Dublin for the All-Ireland quarter-finals and found a very haphazard approach to the additional numbers travelling. There was no evidence of any forward planning. People who travelled by train that day had a dreadful experience in terms of the service provided by Iarnród Éireann and they would not be encouraged to use the same means of transport again. There may be people who only use the service for special events who are left with a very bad impression of it. I do not believe that is the case throughout the year, but it is something the company should consider.

Many colleagues referred to the company concentrating it efforts on the eastern seaboard. I live in the west and I am concerned by the 25% increase in tourism traffic in the east as opposed to the fall of 4% in the west. Iarnród Éireann is a State agency and Government policy relates to balanced regional development. The company has an important role to play in that area and I would like to hear our guests view on it.

Mr. Meagher referred to business development and stated that a number of people are dealing with that on an ongoing basis. It probably needs to go deeper than that. What is at issue here is the use of land close to the facilities already in place where services are provided. The company needs to work with the development agencies in identifying suitable sites for businesses coming into the State that have the capacity to use rail freight services. It requires more than a sales representative visiting the small number of companies that might use the service. I would like to hear the views of the company on that.

I welcome the delegation. While passenger numbers have increased in recent years, I would give the company no credit for that as it has been operating in an economy that has been growing by 10% annually. There are about 380,000 more workers now than in 1997 and that obviously requires greater passenger movement. What has the company done to increase passenger numbers? Is it just meeting the demand that happened to emerge? The presentation seemed to be very negative in that it said the company is working in a market which is contracting while the economy is expanding.

It is stated on page three of the report that the railway will be competing for scarce national resources. However, the previous sentence indicates that investment of between €2 billion and €3 billion will be required in the next decade. There is a difference of 50% in those figures. What does Iarnród Éireann require over the next five to ten years? Does it look at how the economy is growing or contracting? Iarnród Éireann has certainly not looked at population trends in the Dublin suburbs. The way in which the population in west Dublin increased should not have come as a surprise to those in the transport business. Over 7,000 houses will have been built in Clonee between 1995 and 2007, but the rail service there has not changed since 1988. The track from Clonsilla to Maynooth has been doubled, but there are only three peak evening services from Connolly Station. There is no service to Clonee from Clonsilla or on to Dunboyne and Navan. If we have to wait for the DTO strategy, we will have to wait until between 2010 and 2016. What short-term measures has Iarnród Éireann put in place to provide a service or is it simply prepared to wait for demand to emerge?

I wish to discuss the number of passengers Iarnród Éireann carries. Are the figures compiled from the number of people who previously used cars or from a growing market? What are Iarnród Éireann's plans to attract car users to its services? Is this not a golden opportunity to stop operating in a negative manner? People are fighting for road space, but railway lines to Dublin are not working at capacity and more trains could use them. It has been said that there is a difficulty with slots at Connolly Station. That problem did not just arise recently, we have known about it for the past five to ten years.

I have not heard reference to Dublin Airport, despite the fact that there will be a second terminal built there. What plans are there to run a line out to the airport? From where will it leave and when will it be ready? Will it be heavy or light rail or the metro?

I would like a specific answer to Deputy Healy's question about letters of comfort and their value. Have all members of staff of Iarnród Éireann received such letters? I wish I had one.

The Senator is involved in politics, so he will not get one.

I welcome Dr. Lynch and the delegation. The oldest carriage in the country operates on one of the routes of the Dublin-Castlebar-Westport line. It has been said that all carriages over 30 years old will be changed by 2007. Will we have to wait until then for the carriages on the route to which I refer are changed? There is no dining car on that train, it is not wheelchair friendly, there is no food available on it at times and there is often no light or heat. I have received many complaints about it.

I was disturbed to hear at a recent sub-committee meeting of Mayo County Council that Coca Cola, Ballina could not do business with CIE in regard to transporting goods by rail. The company was dumbfounded when it could not do business with CIE.

With regard to the reply to Deputy Shortall's comments on the spatial strategy, it is amazing that CIE can say that it does not make policy. The majority of people running a business would want to know the hubs and the areas of growth in order to provide a service to them. There should be planning in that area and CIE should not have to wait to be told what to do by the Minister or transport planners. I find it amazing that CIE is not ahead of the posse and does not say it will provide routes to and target areas of growth.

Many of the operational issues to which I intended to refer have already been dealt with. I stated earlier that I thought this exchange of views, though welcome, was pre-emptory because it precedes the publication of the strategic rail initiative. I feel that in the absence of the report we are talking in a vacuum. In that sense I am disappointed that we are having the meeting now and feel that we should have a second exchange of views when the report is published. Why should CIE be making strategic decisions about the provision of rail and freight traffic in this country in the absence of the strategic rail initiative report? It seems that the cart is being put before the horse. Why was the decision made and why is it now in the public arena?

The report indicates that customer revenue for last year amounted to €190 million and that in the current year CIE will receive State support of €155 million. That is an enormous subsidy by any commercial standard. It leads me to believe that the business is chronically under-funded or unviable. Perhaps our guests will comment on that matter.

I am not an expert, but I understand the main thrust of what Dr. Lynch is saying to be that in order to get on an even keel major capital expenditure is required. In the third or fourth page of the report it says an investment of €2 billion to €3 billion is required over the next decade. A number of contributors referred to the fact that the company says it is inhibited by legislative and policy constraints and by Acts of the Oireachtas. We would like to see a more dynamic vision. We do not want to hear the excuse of not being able to take a certain road because of legislative or other constraints. We would like to see some form of long-term vision towards getting overcoming the problems that are so evident at present. I have not seen any of that vision today. What has come across today is their role is that of mere functionaries who just implement legislation or operate within its constraints.

While I understand the legal situation, there seems to be no spirit or drive towards operating in a modern atmosphere. In that respect there is a sharp contrast between CIE's activities and those of the airline sector. In an open market the airline sector seems to have grasped the opportunities of a rapidly expanding economy and of increased transportation requirements to make enormous strides in the area.

I have one final question on the Limerick-Waterford route.

As a vote has been called in the Dáil we will have to adjourn.

I will be very brief. Why are the costs so high? There are 30,000 journeys, but the revenue is only €100,000. That suggests the fare is only €3 which seems illogical to me.

There is one other speaker who may ask a brief question. We must then adjourn. Do Members wish to return or will they be satisfied with written replies to questions asked?

I have no difficulty with written replies. Since we are discussing rail strategy, we should have a further exchange of views after the strategic rail initiative is published.

Strategy without implementation is like hallucination and that requires money. We were not required to come here today to give vision. We were required to come and answer questions in regard to freight and to a particular line. The danger is that we will be seen as troglodytes. We have a plan and vision and know how to raise the money. However, we were not asked here today to discuss that.

I must disagree with some of my colleagues. As far as I am concerned approximately 70% of what CIE is doing is good. I know CIE cannot just say it is increasing its passengers from 34 million to 44 million. Many good things are being done. However, I share the concerns of some that in certain parts of the country there is a feeling that things are being dropped. There are positive developments and perhaps the representatives of CIE did not expect questions on so many areas.

May I ask my question now?

No, there is a vote in the Dáil just now. I apologise to the Senator.

Perhaps the questions that were not answered could be submitted for written reply.

I thank the CIE personnel for their attendance. Following this first meeting with the newly appointed joint committee, I expect there will be many others. I hope the concerns outlined by committee members representing rural areas, in particular, will be taken on board.

I noted that each speaker welcomed us and then drop-kicked us around the place.

Welcome to politics.

The joint committee adjourned at 4.51 p.m.
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