I propose to take Questions Nos. 1 and 2 together.
These questions are about the viability of the CIE group. In the three years from 2009 to 2011, CIE as a group suffered a total loss of €137 million after exceptional items. Clearly, this level of loss cannot be sustained and must be addressed. While progress has been made over recent years in reducing costs and headcount, these reductions have not been sufficient to eliminate the deficits in the operating companies.
While additional funding of €36 million was provided by the Government to CIE last year to ensure companies could continue to operate public service obligation, PSO, services for the rest of 2012, the funds are not available to do so again. Instead, the board of CIE is pursuing a range of measures such as the sale of non-core assets and reductions in cost base, including payroll reductions. At the end of 2012, a significant voluntary severance programme was implemented in Irish Rail and the group generated cash of €20 million by selling its interest in the ground lease in Spencer Dock. CIE will also benefit from the introduction of a fuel rebate in July and, in addition, the group has benefitted from fare increases approved by the NTA. The group is also in negotiation with its banks on refinancing and I understand these discussions are progressing well.
Any refinancing will rely upon the delivery and implementation of a credible business plan. CIE has undertaken a rigorous business planning process with the aim of returning to a break-even position and achieving a sustainable debt. The implementation of a credible business plan will be essential to CIE's financial recovery in the period ahead.
In addition to PSO subvention, the Exchequer also makes a very substantial contribution to the companies' capital costs. Despite the constraints on the Exchequer, capital funding of more than €440 million has been provided to all three companies in the past two years and continued investment in the region of €170 million has been allocated for 2013. The objective of this investment is to get a better return from the existing public transport network through targeted improvements, better use of existing resources and the use of modern technology to make public transport more responsive and user-friendly.
I am conscious that I am addressing these questions at a time when Bus Éireann is engaged in critical negotiations with its staff. Management and staff in all of the CIE companies must continue to focus on cutting costs, which can help to address the serious financial position in which the CIE group finds itself.
In contrast to some of the rhetoric we have heard in recent days, it is important to remember that neither party opposite in its pre-budget submission proposed any changes to the level of subvention for public transport. Fianna Fáil’s pre-budget submission went further and proposed to reduce funding for the free travel programme by 5% in 2013. If this proposal had been implemented, it would have resulted in a further reduction in funding to CIE of more than €3 million and in particular would have cost Bus Éireann approximately €1.6 million. Given the party’s desire to represent constructive opposition, Deputy Dooley may wish to enlighten the House as to how he expected the CIE group, and Bus Éireann in particular, to bear the additional cost reduction he proposed.