Niall Collins
Ceist:1. Deputy Niall Collins asked the Minister for Transport, Tourism and Sport his plans to address the serious funding shortfall at Iarnród Éireann; and if he will make a statement on the matter. [46392/14]
Amharc ar fhreagraThursday, 4 December 2014
Ceisteanna (1)
Freagraí ó Béal (6 píosaí cainte)
In the light of the recent statement by the chief executive officer of Irish Rail, Mr. David Franks, that the company needs an additional €100 million per year in funding, I have tabled this question to ask the Minister what his plans are concerning this matter.
Iarnród Éireann has incurred accumulated losses of over €148 million in the past six years. This trend is unsustainable and being addressed on a number of fronts.
Payroll comprises 60% of the cost-base and savings had to be found. I acknowledge the changes that have been accepted by workers on foot of the Labour Relations Commission's proposals of last September. The LRC also recommended that the cost management committee, involving both management and employee representatives, identify target savings on non-payroll items necessary to implement the company’s five year plan.
The Government has provided for substantial Exchequer investment in the rail network in recent years, despite the significant financial challenges, and is fully engaged with Iarnród Éireann and the National Transport Authority in examining the future funding requirements of the company to ensure a sustainable future. I have given a commitment to avoid further reductions in the public service obligation, PSO, funding. For the first time since 2008, the level of PSO funding for bus and rail services is to be maintained in 2015 at current levels. This commitment has now been achieved.
It is also my intention, within the overall capital envelope available to me, to make a significant injection of additional funding in the public transport capital investment programme. A large portion of the amount earmarked for public transport will be targeted at Irish Rail’s renewal investment required in the rail network which will contribute to securing a viable path for the company.
These measures are necessary components that will contribute to addressing the financial position of the company and the CIE Group. The policy and funding framework must take account of what the Exchequer can afford, while providing clarity for the public and employees on the necessary measures to restore the company to viability.
The public needs clarity on the charging structure Irish Rail has in place for its customers, on which we need certainty. It is broadly accepted that prices cannot go any higher because otherwise the law of diminishing returns would potentially kick in and customers would walk away and seek alternatives. The Minister said previously that he was confident that the funding afforded to Irish Rail was enough, yet that seems to have been contradicted by Irish Rail. Given that there is some growth in the economy, does he consider that Irish Rail's funding should at least grow in line with the projected rate of economic growth and that the company should be allowed to progress on a pathway with increased funding to carry out the infrastructural upgrades required across the country?
It is important to put in context the figures about which we are talking in order that the Deputy and the House generally are aware of the choices we have to make. For example, in 2013, CIE received €408 million in current and capital funding from the Exchequer. Of this figure, €226 million was for the provision of PSO transport services. Therefore, the CIE Group, Irish Rail in particular, is already in receipt of a huge amount of needed public investment. During the years of the crisis the level of funding made available to the company declined. I have honoured a commitment that we would maintain the level of subvention made available to the company. I have recognised that there is a need to support the capital needs of the company, on which I will soon be bringing forward proposals.
I would like more detail on the Minister's last comment. He says he will be bringing forward proposals, but when will we have sight of them? Will it be a matter between the Minister and the company, or will the Oireachtas get to hear about it? Will the Joint Committee on Transport and Communications have an opportunity to discuss the proposals when they are brought forward with the Minister and the company?
We are dealing with a company which, for the first time in many years, is seeing an increase in the number of passengers using its services. This is in line with what we are seeing not just on rail but also bus and Luas services. Public transport is benefiting from, and contributing to, economic recovery. The economic environment within which these decisions must be made is changing. Nonetheless, we are talking about a substantial amount of support that has been made available to the company. Despite the changes made and the reductions in the level of subvention funding, we are still talking about a PSO figure for Irish Rail alone of €118 million in 2014. This is a significant amount of money. To answer the Deputy's question directly, my intention is to bring further proposals to the Oireachtas Joint Committee on Transport and Communications. I have requested that this be done next week.