Mr. David Franks:

Along with my colleagues, I thank the committee for the invitation to attend today to discuss the future vision for public transport and funding issues as they relate to Iarnród Éireann. First, I will give the committee an overview of Iarnród Éireann’s operations. This year, we will carry a projected 41.4 million passengers and 100 million tonne kilometres of freight. We operate with a fleet of 638 carriages across a network of 1,700 kilometres and maintain both as well as 1,000 level crossings, 5,100 bridges, 4,900 cuttings and embankments and a range of buildings and structures which include 144 stations. Every week our team of almost 3,800 people maintains this network and operates 4,300 passenger train services and 50 freight services. Additionally, we are the port authority for Rosslare Europort, the State's second busiest port which handles 2.3 million tonnes of freight and 900,000 passengers annually.

In funding terms, Iarnród Éireann is divided into train operations and infrastructure management divisions, as required under EU directives. The train operations division runs day-to-day train services which are largely funded through the fare box and PSO payments from the NTA. The infrastructure management division maintains and invests in our network and is funded through multi-annual contract payments from the Department of Transport, Tourism and Sport and from track access charges from train operators - largely our own train operation division but with some other operators, notably tourism and heritage operations such as the Belmond Grand Hibernian tour of Ireland, which has just started operating, and the Railway Preservation Society of Ireland. Capital funding for major overhauls of our rolling stock and infrastructure renewal is essential. It is needed to protect the value of our fleet and infrastructure assets for our customers and the taxpayer.

In both areas of the business, Iarnród Éireann continues to operate through an era of unprecedented challenge. While business growth has made a very welcome return, the cumulative and continuing effect of operating losses and underfunding challenges our ability to operate sustainably and to maintain the levels of safety and service performance expected by our customers. Annual PSO funding has reduced since 2007 from €195 million to €98 million.

Financially, notwithstanding reducing our cost base by more than €73 million per annum during the economic crisis, we will again record a loss in 2016, albeit one that is better than forecast as a result of passenger growth. This will bring our cumulative losses since 2008 to €160 million. Our balance sheet simply will not withstand further losses beyond 2016 without impacting on service levels, performance and safety maintenance. Equally critical in terms of funding our operations and network, the Department of Transport, Tourism and Sport in its strategic framework for investment in land transport and other reviews has identified a shortfall in annual funding of €90 million for the network we operate and services we are contracted to provide.

I commend our team of dedicated employees on ensuring we continued to deliver services safely and reliably during this era. However, as history has shown us, sustained underinvestment will ultimately impact on both safety and reliability and result in greater costs to renew our assets in the long run rather than maintain them sustainably. For customers, this would mean a return to speed restrictions and a worsening of service standards when our ambition is to improve times and service quality.

We must address this underfunding to maintain our existing track, signalling and infrastructure assets and to keep pace with best European practice in safety management such as automatic train protection systems, which exist only on the DART network and which automatically prevent trains from passing red signals or from over-speeding and are commonplace across Europe. Further investment in level crossing safety is needed following an era in which we halved the number on our network. We have prioritised the renewal of our national train control centre. We have worked and continue to work extremely closely with both the NTA and the Department to identify and address these challenges and I thank them for their support as we work towards a sustainable future for Iarnród Éireann.

I will now move to our vision for the future. As I have already stated, growth has returned to our network. Passenger journeys, which fell from a high of more than 45 million in 2007 to 36.7 million in 2013, are projected to climb to 41.4 million this year. In a growing economy, the strengths of a sustainably funded rail service are clear. Rail can provide frequent, high-capacity public transport to address urban congestion, particularly in Dublin and Cork. Rail can deliver fast inter-urban journey times between Dublin city centre and key cities and towns on the island of Ireland and ensure CO2 and other emissions from transport are dramatically reduced, thus helping the State meet European and United Nations Paris climate change agreement goals. Iarnród Éireann has already exceeded the Government's 2020 target for emission reduction for State bodies. Rail can provide a competitive offering in both passenger and freight sectors, supporting a dynamic and growing economy and ensuring social inclusion.

To this end, our vision for Iarnród Éireann is to build a better future together by improving our services and growing our business. One of our core values is putting the customer at the heart of our business and this is where our priorities lie for investment and service improvements. We are committed to opening the Phoenix Park rail tunnel in the coming weeks for commuter services from the Kildare line to the stations between Connolly and Grand Canal Dock, initially at peak times before extending operations to off-peak times and weekends. Our Customer First programme will address legacy ticketing and customer-interfacing systems to deliver modern, customer-friendly engagement, including customer relationship management systems, enhanced online offerings, yield management systems similar to the airline industry and more. Other developments include the expansion of DART services to a ten minute frequency; incremental journey time improvements through ongoing line improvement works, initially between Hazelhatch and Portlaoise benefiting intercity customers to and from Cork, Limerick and Kerry; and the completion of re-signalling of the DART line between Clongriffin and Grand Canal Dock to allow more trains to operate.