Ms Vivienne Jupp:

I thank the Chairman and members for the invitation to attend these proceedings. I regret any difficulties which may have arisen for the committee in the context of our unavailability for the other proposed dates for this meeting.

CIE is continuing to experience extreme difficulties from a financial perspective. These difficulties can be categorised into two areas, namely, cash and financial losses. In early 2012 the cumulative effect of five years of reducing demand for public transport, reductions in public service obligation payments, the increased cost of fuel, significant losses from operations and other economic factors led to a serious cash shortage in the group. As a result, CIE, working closely with the Department of Transport, Tourism and Sport and building on existing cost reduction programmes, implemented a range of actions during the period to address this situation. These included: obtaining an advance on public service obligation payments and the acceleration of Exchequer grants claims process; strengthening the board's oversight of cash management; and the establishment of a centralised disbursement policy. We particularly strengthened the cash management processes and procedures. These actions, together with the sale of our interest in Spencer Dock and the provision by Government of an additional €36 million in funding in 2012, stabilised the cash position. At the same time, we engaged in discussions on securing renewed banking facilities. I am pleased to inform the committee that those discussions have concluded and that renewed and extended banking facilities are now in place. However, these facilities do not solve the totality of our financial difficulties - far from it.

The availability of the funding is dependent on our fulfilling financial covenants in respect of the ratio of net debt to earnings before interest tax depreciation and amortisation, EBITDA. The latter is a normal process in the context of the banks. The four financial institutions with which we have arranged banking facilities require us to meet key performance benchmarks in respect of growing revenue and reducing costs, particularly those relating to payroll, and returning a projected EBITDA from our operations. To put it simply, if we fail to meet the targets contained in the covenants, there will be less funding available to us and we will return to the crisis we faced last year. Obviously, this is something we wish to avoid at all costs.

The company has incurred ongoing financial losses in recent years, including a €31 million operating loss in 2012. While the cost base has been reduced by €133 million since 2008, this has been insufficient in the context of offsetting the cumulative effect of reductions in subvention and revenue. The CIE Group must continue to implement a range of corrective actions to reduce its costs and increase revenue. To this end, the current pay and productivity proposals being progressed within the three operating companies are essential to our ongoing financial sustainability. Given that these proposals are currently being negotiated or balloted upon, I hope the committee will understand that it would be inappropriate to comment on them at this time. We are also in the process of reviewing the strategies for all three companies and the group to meet the challenges ahead and to increase our revenues.

There are some grounds for cautious optimism. Revenue and passenger numbers, which had been falling since the onset of the economic crisis, stabilised in 2012. Modest growth in revenue has been recorded, as well as stability in passenger numbers, since the latter half of last year. As with all enterprises operating in the Irish economy, a return to growth and stability would have a direct beneficial impact on revenues.

From a service delivery perspective, I am pleased to advise the committee that we continue to maintain a comprehensive network of services to communities and that significant improvements have been made across all of the companies.

I will leave it to the individual CEOs to outline those improvements.

Overseas, CIE Tours International continues to be the largest single generator of inbound tourism from the key market of North America. It saw a 9.3% increase in visitor numbers in 2012 and 2013 looks on target to be a bumper year for CIE Tours International. The CIE Group as a whole is supporting The Gathering by offering tourists tickets for three days and seven days.

Looking to the future, with the measures we have outlined we are on target to reduce our operating losses in 2013 and the group has a clear plan to extricate itself from the difficulties in 2013 and 2014. We have the support of the Minister, the Department, the banks and staff.

Overall, the challenges facing CIE continue to be significant. Nobody should underestimate the task ahead to ensure that the CIE group returns to financial stability. However, I am confident that all the stakeholders working together, taking the necessary and at times difficult actions needed, can achieve stability for the benefit of staff, customers and communities for whom our public transport service is essential to their daily lives. I wish to hand over to Mr. Paddy Doherty, CEO of Dublin Bus, to talk about some of the improvements that have been made in the bus company.