Tom Hayes (Tipperary South, Fine Gael)
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The purpose of this meeting is to discuss with Ms Vivienne Jupp, the chairperson of CIE, Mr. David Franks, CEO of Iarnród Éireann, Mr. Martin Nolan, CEO of Bus Éireann, and Mr. Paddy Doherty, CEO of Bus Átha Cliath, CIE's annual report for 2012, its current financial situation and the future direction of the group. On behalf of the committee, I welcome our guests. I draw their attention to the fact that by virtue of section 17(2)(l), witnesses are protected by absolute privilege in respect of their evidence to the committee. However, if they are directed by it to cease giving evidence in respect of a particular matter and continue to so do, they will be entitled thereafter to only qualified privilege in respect of their evidence. They are directed that only evidence connected with the subject matter of these proceedings is to be given and are asked to respect the parliamentary practice to the effect that, where possible, they should not criticise or make charges against a person, persons or an entity by name or in such a way as to make him, her or it identifiable. I wish to advise the witnesses that any submissions they have forwarded to the committee and any opening statements they may make will be published on the committee's website following the meeting. 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 Houses or an official either by name or in such a way as to make him or her identifiable.

Before I call Ms Jupp, I must apologise for the fact that I will be obliged to vacate the Chair for a short period in order that I might make a contribution in the Dáil.

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.

John O'Mahony (Mayo, Fine Gael)
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I am conscious that the contributions were circulated to all members prior to the meeting. Rather than read through them, I ask that witnesses summarise the presentations and then we can have questions and answers. Is that agreeable to members?

Timmy Dooley (Clare, Fianna Fail)
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I agree with that approach. A couple of minutes each should be sufficient and then we can retain the timeframe. We have the documentation and it would save time.

John O'Mahony (Mayo, Fine Gael)
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Is that agreed? Agreed. I invite Mr. Doherty to make his contribution.

Mr. Paddy Doherty:

Last year, 2012, was a good year for financial progress. Our losses compared to 2011 reduced from €18 million to €9 million and after the additional subvention that was further reduced to €3.8 million. There was also good progress in terms of passenger numbers, which stabilised and started to grow towards the latter end of the year. I will outline some of the major contributors to that. The completion of Network Direct was a huge project and we finished it during 2012. It has radically transformed the bus network in Dublin. Some of the attributes of the new network are outlined in the written submission. I will not go through them but the new network is a significant contributor to the changed trends in passenger numbers.

In terms of the contract with the National Transport Authority, NTA, we met all the customer service targets set in the NTA contract throughout the year. They are independently audited and verified. We got 80 new buses last year and many of their new features are outlined in the written submission. We also achieved what was a major milestone for the company in reaching 100% accessibility. We have probably one of the best equipped fleets in Europe in terms of accessibility for people with disabilities.

Real time information was also a big boon which was introduced at the start of the year. It is now available on apps and on the web at approximately 500 stops around the city. Anyone who uses buses will agree that it has transformed the entire experience of using them. The system is progressing this year.

The Leap card was introduced last year. It is part of a major development programme which will come together towards the end of this year. Towards the end of the year we were getting 200,000 journeys per week on Leap. We promoted all of that and it has contributed to a stabilisation of our numbers and growth into 2013.

Moving into 2013, as I said, passenger numbers have stabilised. The last few periods are showing good growth and there is strong positive evidence. Revenues are strong. We are behind on expenditure at the moment because, as the chairman outlined, we are finalising a cost reduction programme. That will contribute to an outturn this year of a €2.8 million operating loss. We have had a very steady year-on-year financial programme.

In terms of customer service for 2013, we are continuing with many of the positive initiatives I have mentioned and we are meeting our targets. We will get a further 80 buses this year. A total of 400,000 real time passenger information, RTPI, apps have now been downloaded. The NTA has introduced a journey planner which makes it easier to figure out the new network. Leap cards continue to expand. We intend to have Wi-Fi on all of our buses by the end of the year which, again, is a big plus for the customer. We are also developing interior announcements, both audio and video. The NTA is keen on traffic signal priority for buses, as are we, which again will provide a time benefit for passengers. It will be a big challenge for us to work with the NTA and Dublin City Council on the Luas cross-city project and make sure that all of the benefits are maintained through the programme.

Looking forward into 2014, it is our target to break even and to make a small profit. We will do that through the continuation of the programmes I have outlined. Our objective is the retention of the NTA contract and the retention of our role as a pivotal part of Dublin city. We must work through the Luas cross-city development and make sure we achieve all our objectives.

Mr. Martin Nolan:

I will summarise my contribution. I was here in October when I gave a comprehensive briefing of the company’s financial position and an overview of the national coach and bus market.

I am happy to update the committee on those matters. Everyone will know that Bus Éireann not only provides a public service in provincial cities but also provides the school transport system and the inter-city commercial services. Last year we had more than 77 million passenger journeys across 6,300 routes in the State. In recent years, due to the efforts of all of our employees, we have improved our services, which has resulted in a high level of customer satisfaction and a return to growth in customer numbers. Our financial situation reflects the reduction in State funding, continued economic stagnation, increased fuel costs and growing inter-city competition. We recorded a loss of €6.2 million in 2012.

It is important to note that in 2009 the Government’s value for money report said that we were as efficient as our European counterparts. Since then our subvention has been reduced by 30%, passenger numbers have dropped by more than 20% and fuel costs have increased by €14 million. We have reacted to the situation by reducing our cost base by more than €35 million while managing to largely protect service levels. We are implementing a plan to save a further approximately €20 million, including our recent agreement with the trade unions. That will bring ongoing efficiencies which will result in us breaking even by the end of the year. Separately, we have also delivered more than €25 million in savings to the Department of Education and Skills on the school transport scheme. That has been reinvested largely in services, particularly for special needs.

We have seen improvements in Wi-Fi, and new vehicles on city, commuter and inter-city services. We have rolled out networks in the provincial cities, resulting in greater passenger usage, and introduced the RTPI in provincial cities. We started our Leap card journey in the greater Dublin area and we will roll it out to Cork. Our apps and social media are up and running and we also have a large loyalty scheme that offers regular discounts to encourage travel.

I will quickly go through the inter-city market. It is important to note there is no State funding in the inter-city market, which is subject to significant competition. The competitors operate a limited-stop service that bypasses locations served by Bus Éireann. In response, the company has had to continue to make changes on those routes to meet the demand from the majority of our inter-city customers for shorter journey times and a limited number of stops. We have kept commercial services going in many locations for many years despite the low levels of use, but given the economic situation in the country, the new motorway network and cherry-picking of the profitable element of routes by competitors, unfortunately, that is no longer possible in some cases. We are working with the NTA to offer alternatives but there is limited State funding available for such services.

As a result of the work outlined above, we are starting to see more and more people using our services. In 2012, overall passenger numbers were up. City usage was up 2% and inter-city customer numbers increased by 4%. So far this year the growth in customer numbers has continued. We will meet all performance targets for the NTA and we will also deliver on all of the value for money review findings for the school transport scheme.

There is no doubt the past few years have been challenging for the company, with reduced State funding, increased costs and greater competition. However, despite that, we have maintained as many services as possible, particularly in areas where there is no alternative for people. While we are still facing significant challenges, with our cost agreement now in place, a continued strong focus on reducing costs and increasing passenger numbers and greater commercial freedom to make the necessary changes on our inter-city services, the company is now in a much stronger position and its target is to come close to breaking even by the end of the year and returning to profitability in 2014.

Tom Hayes (Tipperary South, Fine Gael)
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I thank Mr. Nolan.

Mr. David Franks:

In 2012 Irish Rail recorded an operating loss of €22.5 million, and that was after the supplementary Exchequer payment that was made. In the past five years, Iarnród Éireann has had its subvention levels reduced by one third, €64 million. At the same time, during the very difficult economic situation in Ireland, we have seen passenger revenues drop by almost €35 million, a fall of 16%. To address this combined income shortfall of almost €100 million, we have been working with our staff to reduce costs. We have successfully reduced these by almost €67 million. This has more than compensated for the fall in the passenger revenues but it has not been nearly enough to deal with the large reduction in subvention. Despite this very difficult financial position, we have maintained the majority of services. Examples of the measures we have taken include a voluntary severance programme, which has reduced the workforce by almost 25% since 2008. We now employ just fewer than 3,800 people, compared with 6,000 ten years ago. We have agreed efficiency measures with our staff and negotiated reductions in overtime levels, allowances and leave benefits. We have also taken action to reduce one of our other big cost areas, fuel consumption, which of course yields environmental benefits. We have re-tendered major contracts to achieve cost reductions from suppliers.

The committee will be aware that proposals are being balloted among our staff, which will deliver further efficiency measures, including reductions in basic pay, with the underlying principle that those who earn the most will contribute more. A successful outcome is critical to achieving our financial goals and the requirements of our banks, not only in 2013 but up to 2017, when our projections will show we aim to break even.

We have seen fare increases. These have been balanced by promotional activity, including advance-purchase discounts and special offers for students and families. The introduction of the Leap card and Taxsaver products has also resulted in large discounts for customers. It is good to note that according to our most recent customer satisfaction survey, these offers have helped to drive a significant improvement in the value for money score, which is up ten percentage points.

Despite the current funding environment, we remain ambitious about the future of the rail network and the role it can play in meeting the economic and mobility needs of the country. To that end, further significant intercity journey time improvements are a key priority for us. The economic benefits of these have been clearly identified by the AECOM study carried out on behalf of the Department of Transport, Tourism and Sport in 2011. Other priorities for us include the DART expansion projects, including the DART underground line, the electrification of the Maynooth, Hazelhatch and northern lines and the opening of a DART airport link. We would welcome the committee's support for each of these projects as the Government prepares to assess its investment priorities in 2015.

In summary, we have been through an era of significant change. We have an upgraded network, one of the youngest fleets in Europe and new customer facilities. We are running more trains with a reduced workforce while at the same time delivering record punctuality. However, our financial position remains extremely challenging and must be addressed. We must continue to improve our services if we are to compete effectively with the improved motorway network. The cost-reduction measures are crucial to ensuring that Iarnród Éireann plays the strongest possible role in delivering a high-quality public transport network for Ireland and most of all for our customers.

Tom Hayes (Tipperary South, Fine Gael)
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I thank the delegations for their presentations and for articulating the many issues they are dealing with and the challenges they face.

Timmy Dooley (Clare, Fianna Fail)
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I welcome the three chief executives. I also welcome the chairman of CIE, Ms Jupp. Is this the first occasion on which she has been before the committee?

Ms Vivienne Jupp:

No; it is the second occasion. I was here on my appointment.

Timmy Dooley (Clare, Fianna Fail)
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One of the main reasons for this meeting is to discuss the overall financial position of the public transport network. There was much concern last year when CIE came back to the Government looking for an additional €35 million outside the profile that existed and that had been presented by way of a budget for the year. The Department was able to find it within its overall budget but it was an unsavoury situation.

The reason we issued this invitation several weeks ago was to ensure the same was not on the horizon again. I am deeply disappointed it took so long for the witnesses to attend the committee. There has been a very good working relationship between this committee and the three companies within CIE and the overall board of CIE. I have sat on this committee since 2002 and this is the first time we have had any difficulty with CIE in terms of coming before the committee. We often had issues before but they were dealt with to the best of everybody's ability.

Will Ms Jupp indicate the projected deficit for CIE in 2013? What will the reduction in the subvention do to the overall integrated network situation? Has CIE devised a plan to present to the Government to show how it intends to protect the entire network as it exists, recognising the reduction in subvention? Has it made any appeals to the Government with regard to the necessity of increasing subventions in line with the reduction in its fare-box and commercial activity, notwithstanding Mr. Doherty’s indication that there seems to be an upward trajectory in that regard?

In terms of the company's negotiation with the unions, which is clearly an exceptionally important element in recalibrating the cost base, has Ms Jupp met any of the trade union leaders? Have any of the chairmen of the three companies met the trade unions in an effort to build a consensus around cost reduction while at the same time protecting the integrated network that exists between the three companies?

It is clear that the future viability of CIE as a public transport company hangs in the balance. There is nothing particularly new about that statement. What actions has the company taken to try to ensure its viability? There has been some talk in the media about the potential sale of the Expressway service. Can Ms Jupp indicate what discussions it has had with Government about that? There is talk about part-privatisation of 10% to 15% of Dublin Bus routes. Will Ms Jupp indicate how she thinks that will improve the viability of the company? There is also talk about Bus Éireann, in an open tendering environment, having to tender for some of the public service obligation, PSO, routes. Will Ms Jupp indicate how that might improve the financial viability of the Bus Éireann wing of the company? It is clear that the missing piece of the jigsaw is the subvention. We have various reports from the companies over several years of a progressive approach to cost reduction, which is welcome. However, I am not so sure that CIE is fighting the battle to the extent it should with the Government around demanding an increased subvention to meet the needs of retaining an integrated public transport system.

Ms Vivienne Jupp:

First, let me say that I regret any difficulties we caused the committee. On the various dates that were proposed, at least one of this group was unavailable. I also had concerns about the discussions that were ongoing with our unions at this particular time. I spoke to the Acting Chairman and he understood those concerns and we were able to attend today. I asked the CEO of Dublin Bus to rearrange some leave so he could be here today. I will put that on the record by way of background.

In respect of the financial position of CIE, many things have contributed to where we are today and there are many things we are doing to extricate ourselves from that. The overall economic situation has a major impact on us and our business generally tracks consumer spending. As it goes down, spending on public transport also goes down. We then had the reduction in the PSO, and one can see around the garages at the moment that fuel prices have gone up again. These are all very difficult things for us to negotiate our way through but we have done a significant amount in taking costs out of the business. As everybody said, they have been able to match broadly the reduction in revenue, but on top of that we have had the PSO reduction and the fuel price increases. Obviously, we understand the overall situation the Government is in and so we have been making our point about the impact of the reduction in subvention in the context of the broader picture. We must understand where we sit versus everything else and the decisions made at that level.

In terms of the actions we are taking, our goal is to continue to provide a comprehensive service to our customers and communities around the country. We continue to work on that. Given the capacity we have, our focus is to try to drive extra passengers onto all of our service offerings. Many measures have been put in place which we are highlighting to our customers to encourage them to come back to public transport. There are apps on all mobile phones that can tell one when a bus or train is due, which is a great advantage to people. Wi-Fi internet connections are broadly available, which means that when one is sitting on a train or bus, one can do some work. We are making our customers aware of that and in the past six to nine months we have seen an improvement in the passenger numbers and, therefore, in revenue.

In respect of union negotiations, it would probably be fair to ask the individual companies that take prime responsibility for negotiating with our unions to outline their comments.

Timmy Dooley (Clare, Fianna Fail)
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To clarify matters, I asked whether Ms Jupp or any of the chairpersons of the individual companies has had any meetings with the unions. Does Ms Jupp have the consolidated projected deficit for 2013?

Ms Vivienne Jupp:

I may have it. Somebody might be able to give it to me before we finish. Other than meeting the worker-directors on our boards, I have not met with any of the unions. I am afraid I cannot answer for any of the other CEOs of the individual companies. I know that the individual companies are taking the lead on it so that we continue to have a public transport system available to our customers.

Timmy Dooley (Clare, Fianna Fail)
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My questions are aimed at Ms Jupp and relate to the sale of Expressway and the part-privatisation of-----

Ms Vivienne Jupp:

I will finish the rest of them and will then pass over. Deputy Dooley said there was discussion in the newspapers about Expressway being sold. Expressway is a challenging environment for us because of the level of competition on those services. We have no plans to sell Expressway. It is currently challenged, so trying to sell a company that is challenged would be extremely difficult. In respect of the privatisation of bus routes, we must again leave that discussion to the individual companies that will be affected by it. Did I miss a question?

Timmy Dooley (Clare, Fianna Fail)
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The other one was about the proposed tendering of the PSO routes for Bus Éireann.

Ms Vivienne Jupp:

Could I leave that to the individual bus companies?

Timmy Dooley (Clare, Fianna Fail)
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What sort of plan has Ms Jupp, as chairman of CIE, put to the Government in terms of the protection of the integrated network and, effectively, a statement that if subvention is reduced, this will be the ultimate impact on the network?

Tom Hayes (Tipperary South, Fine Gael)
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I will let Deputy Dooley in at the end if there is a need for further clarification, but I want to give everyone a fair chance.

Mr. Paddy Doherty:

On the question of the protection of network, Dublin Bus now has a new arrangement involving a contract with the NTA for the PSO element of our operation, which is 95% of the operation. Under the contract, a new arrangement is being put in place this year, which is a very welcome and positive development. From June 2013, we will look at the service profile, demand, anticipated revenue, fares and expenditure. We look at the situation in the round as regards the operation of the service next year and what the requirements for everyone will be to ensure that people in Dublin get a service which matches the demand and developments taking place. The subvention debate, the level of service and the growth in the market will be addressed in that context. That is a positive development in so far it brings all the issues together in the round for us to deal with together. As the months pass, we will get clarity about our plans for next year and subsequent years. That is a positive development.

Privatising routes is a decision for Government and the NTA. It is not a decision for us. We have made submissions and there was one consultation by the NTA last year. Another formal consultation will begin some time towards the end of this year. In both of those cases, we will be making submissions. I have no doubt the NTA in its consideration of it will take account of what is happening in Europe, where there has not been a great expansion of tendering since the new EU regulation was introduced in 2007. I have no doubt it will also take account of the comparison with the finances in London and the rest of the UK, which do not show any great pot of gold in this area. I am sure it will consider all of that but we will be making submissions to it at the end of the year. We have done so already. Ultimately, it will be a matter for Government to decide where this goes.

Timmy Dooley (Clare, Fianna Fail)
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Just to clarify, I wanted Mr. Doherty to outline the impact that privatisation would have on the cash situation of Dublin Bus.

Mr. Paddy Doherty:

We do not know what the impact will be because we do not know what will be proposed. There is a question of scale if anything is proposed. The answer is that we do not know. If some small element was tendered out, the impact on us would have to be financially neutral. It would be ridiculous to do it any other way. That is the only comment I can make.

Patrick O'Donovan (Limerick, Fine Gael)
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In the first contribution that was made, reference was made to sale of the interests in Spencer Dock. Can Ms Jupp elaborate on how much was realised? Witnesses must excuse my ignorance, as I am from the country. Was that a historic CIE site or was it bought recently? If it was bought recently, when was it bought and how much was paid for it?

In respect of the €36 million, could Ms Jupp give us a breakdown as to where that went in terms of the three companies and CIE itself? All four witnesses mentioned the reduction in the cost base that was required and I think one contributor said that those that earned the most must contribute the most. Excluding the people who are currently being balloted, could Ms Jupp give me an indication of how the company's management contributed to the recovery of the company? Could she give me figures on the extent to which management costs have been reduced in each of the four companies in the past two years?

Will Ms Jupp indicate, given the company's financial position, how the chief executives' salaries have been affected in the past five years? All our salaries, including the Taoiseach's, are bandied about here regularly.

Being from the country, I am interested in the situation on the Limerick-Galway railway line, and others may be interested too. One can get from Limerick to Galway faster by bus than by rail. Last weekend local media in Limerick reported on this issue. Does Iarnród Éireann have any plan to make that rail corridor more attractive to people? I recently received correspondence indicating that the rebranding of Irish Rail, specifically the new logo, was costing approximately €50,000. Will further costs be incurred for rebranding in the companies?

Ms Vivienne Jupp:

Spencer Dock is a site in which we had a ground rent interest, and we sold this interest for €20 million. That helped deal with our cash difficulties in 2012. Of the €36 million subvention money we received, Dublin Bus received €6 million, Irish Rail €30 million and Bus Éireann got zero.

Patrick O'Donovan (Limerick, Fine Gael)
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What about the €20 million from Spencer Dock?

Ms Vivienne Jupp:

The €20 million went into our cash position and was not distributed to the companies. All those figures are in our 2012 annual report. All the CEO salaries have been reduced and are well known, so anybody may ask each of them what are their salaries. The Department of Public Expenditure and Reform has approved the salary of the new person who has joined, Mr. David Franks. I ask Mr. Franks to answer Deputy O'Donovan's other two questions.

Mr. David Franks:

The key problem on the Limerick-Galway route is that it is 20 miles longer than the road journey, so we are at a significant disadvantage. We have done a number of things to try to encourage people to use the route. From next week passengers will be able to book fares on the route online, which they cannot do now, and we will examine the train service options in our next timetable review, for which we are starting to plan.

The €50,000 spent on rebranding was part of the marketing spend and customer research identified that there was confusion around the Iarnród Éireann brands. The logo that emerged did not cost €50,000 but came out of the research that was undertaken for that sum. We have no intention of spending any money on rebranding other than as and when we do routine maintenance or repainting vehicles, for example.

Patrick O'Donovan (Limerick, Fine Gael)
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What about the management costs that have been reduced in each of the four companies?

Ms Vivienne Jupp:

Bus Éireann's management costs have been reduced as part of its recently agreed union negotiations. Dublin Bus and Irish Rail are in negotiation and the CIE group will implement what comes out of that. Mr. Franks went through the average salary reductions that will be applied to management.

Dessie Ellis (Dublin North West, Sinn Fein)
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I thank the representatives of the various groups for coming here. We have heard how each company is hoping to break even by 2014 or 2015. A return to profitability was mentioned. Was the PSO part of that profitability? The PSO was higher in the past. In Bus Éireann it has been cut by 30%. It is not a level playing field in the sense that there was a different PSO. Will the witnesses comment on that?

The Minister, Deputy Varadkar, recently said 10% of Dublin Bus and Bus Éireann routes would be put out to private tender. We have already had cherry picking of some of the very viable routes. With Dublin Bus we have also seen many areas without a bus service, including in my area, where we have no buses going from Finglas village to the north of Finglas. That probably means we will see more of the same and many places will have services cut. I am very concerned about that. Is it realistic to say we will break even without a proper PSO on an ongoing basis? Will we eventually get rid of the PSO or are we stuck with it? Most countries operate that way.

The school transport system was cut by €25 million. Now we are told rural transport is to be reviewed. A value-for-money review of school transport proved that it was highly efficient. If there are any further cuts in that area, it will have a massive impact across the country. I do not know whether there has been any input from the witnesses in regard to the Minister's comments about re-examining rural transport.

There have been massive strides in the area of wheelchair accessibility in Dublin, particularly in Dublin Bus. Does that reflect the rest of the country, such as Cork and Limerick? I would like to get an overall picture of how they are faring compared to Dublin. Dublin has almost 100% accessibility with Dublin Bus. Do Bus Éireann and other companies pay tolls? If so, how much do they cost? I assume reimbursement of fuel is on the agenda because it is a significant issue. I hope the Minister would allow a cut, as has been done for the road haulage industry, on the cost of fuel. Perhaps the witnesses could comment on that. Will Dublin Bus incur losses as a result of the construction of the cross-city Luas, which is coming up? How do we plan to address that? Is it factored into our thoughts?

There have been many short-term sell-offs, which the witnesses mentioned. Are they camouflaging the figures? We will not be able to make up that ground elsewhere, or maybe we will and the group will look for other places to sell off. Are further reductions in staff numbers planned?

Ms Vivienne Jupp:

I expect the PSO will be always required in terms of running a public transport service. That is the case in all other countries and I expect it to continue to be a requirement here.

If we were to raise all of that money from the fare boxes, fares would be expensive. We have been given an indication that next year's subvention will decrease a little, but we hope that it will subsequently stabilise.

We have enjoyed an advantage in the fuel rebate. Approximately €1.5 million goes to Dublin Bus, although I am unsure how much goes to each company. The sums are not large, but they are important contributions.

The only element that we are proposing to sell is excess capacity in our fibre optic cables. Discussions are under way. There are no other plans for major sales. Some properties will be sold, but they are not large. They are all mentioned on the website.

I invite Mr. Nolan to discuss rural and school transport and wheelchair accessibility.

Mr. Martin Nolan:

Profits were mentioned. We run commercial services. As we must reinvest in buses, we must create a profit. The public service obligation, PSO, is a net cost contract and we are exposed to revenue fluctuations. We must ensure we make enough to buffer us and repay our loans. The plan to break even at the end of this year and to make a profit next year is realistic.

We are involved in many groups under the rural transport scheme announced by the Minister of State, Deputy Kelly. Between school transport and our own rural transport schemes, we are the largest supplier of rural transport in the country. My understanding of the plan is to reduce the cost of administration and get more rubber on road, which would be beneficial to everyone.

All of our vehicles in provincial cities are wheelchair-accessible. Outside those cities, most buses are wheelchair-accessible. However, the infrastructure for accessing high-line vehicles is not present in many places.

We pay €1.5 million per year on tolls and airport parking charges. We are grateful to have the rebate back, albeit at a lower rate than seven or eight years ago.

Ms Vivienne Jupp:

Perhaps Mr. Doherty will address the question of Luas versus the bus, a matter on which we are working closely with the National Transport Authority, NTA, and Luas.

Mr. Paddy Doherty:

A concern was raised about service levels. We have undertaken a substantial reconstruction of the Network Direct project. That process has reached the point at which it must look forward. Our priorities are to anticipate next winter, when we might have capacity issues, and to determine where to make further enhancements of the network. We are moving on from the old phase.

There are two dimensions to the Luas issue, the first of which is planning for when the work starts. Some small-scale works are under way on Dawson Street, Marlborough Street and Dominick Street, but the real action will not kick in until the first quarter of 2014, when there will be some movement in our routes. We are working closely with the NTA and Dublin City Council on devising plans to maintain access to stops as far as possible and to maintain the movement of vehicles on alternative routes so that we do not lose time on our schedules. This work has not been concluded. When the works commence, we have an agreement to monitor the outcomes jointly with the NTA. If there are consequences we must face up to them and work through them. The essential work being undertaken now is the preparation, in which regard we are active. The NTA and Dublin City Council are supportive in devising plans.

Dessie Ellis (Dublin North West, Sinn Fein)
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The stops' relocation is a major issue for the local authority.

Mr. Paddy Doherty:

It is significant.

Brendan Griffin (Kerry South, Fine Gael)
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I thank the witnesses for attending. I apologise for missing the presentation. I am concerned, as the amount of money being lost is staggering. Have lessons been learned from how the company got into difficulty? Has anyone taken responsibility and how can we be sure this will not happen again?

The disused and dismantled railway lines that are still in the ownership of CIE are useful national resources, given the possible development of greenways. What is CIE doing to ensure these lines are retained in its ownership without facing challenges from squatters or anyone else? Is any location experiencing difficulties in this regard and how does CIE intended to address them?

Ms Vivienne Jupp:

Regarding the lessons learned, we have examined all of the reasons that contributed to our cash shortage. We have reorganised our finance and treasury function to ensure we have the right skill sets to deal with the challenges we are facing. A number of factors came to a head - we had been making losses, the subvention and revenue decreased and fuel prices increased. It was a perfect storm that led to cash difficulties. I am delighted we were able to put in place new processes and procedures and am grateful for the extra subvention from the Government, which tided us over until we were able to renegotiate our banking facilities.

Sections of former railway lines have been developed as walkways. CIE has no objection to people walking along them. We are generally supportive of the development of greenways on former railways, but each of the lines must be considered separately in the context of potential railway development. We also liaise with local groups and local authorities on the development of each section. Progress has been made on certain sections by walking groups. We are considering north Kerry, Mullingar, Athlone, Navan, Kingscourt and New Ross. The difficulties experienced in some areas were not caused by us.

Brendan Griffin (Kerry South, Fine Gael)
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I will address the north Kerry line because it is the one on which I have information, not because I want to be parochial. Is CIE asserting its ownership of that line?

Ms Vivienne Jupp:

Yes.

Brendan Griffin (Kerry South, Fine Gael)
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Is enough being done by CIE to assert that ownership?

Ms Vivienne Jupp:

We own it.

Tom Fleming (Kerry South, Independent)
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I welcome the CIE group. We are being painted a grim picture of the written report. Let us be fair - if CIE was a medical patient, it would be confined to intensive care. What business studies of CIE's workings and future have been undertaken?

We need an independent international study group to perform a microscopic analysis in order to provide guidance and outline a way forward for the companies. Has such an initiative been undertaken? Perhaps a group capable of such analysis is in this country. One can easily see how well private operators run their businesses. We all know these are tough economic times, but the private operators have a greater commercial and businesslike outlook. They are thriving and many of them are expanding. The delegation might learn from their experience. Radical measures are needed to stop the rot and return the companies to profit, but it cannot be done overnight. Critical mass is one of the success factors. At present there is a lack of people commuting and travelling and thus relying on the companies.

As far as I am aware, if a tourist, whether a backpacker or otherwise, wants to travel to Cork this evening, he or she must buy a return ticket for €70 even if a single ticket is all that is required. I question the viability of such railway charges. I compliment Iarnród Éireann on its attractive family fares but the traveller who wishes to make a single journey must buy a return ticket. I wonder what perception that leaves the tourist with.

I support the remarks made by Deputy Ellis. The companies should carry out a complete re-examination of their properties and buildings, particularly in strategic locations in towns and villages. There is a slump in the property market but perhaps the companies could identify where profits or revenue can be generated through the disposal of assets lying idle or whatever. They are faced with a huge task to get finances back on track, if they will pardon the pun.

Ms Vivienne Jupp:

Yes, the picture has been grim, but at this stage we have stabilised it and our objective is to turn our finances around. In order to succeed we must drive more passengers onto the public transport system. All of our activities are focused on that, in addition to finalising the union negotiations that are currently in play. I hope we will succeed. As I said at the very beginning, we are examining the strategy of each of the individual companies and that of the group. We are re-examining everything that we are doing in order to ensure we do the things that will help us drive extra business and reduce our costs. As Deputy Tom Fleming has said, some of those objectives require radical measures. He also mentioned that a single rail fare costs €70, but I do not believe such a fare exists. Mr. Franks will confirm the cost of a single ticket to Cork.

Mr. David Franks:

One can purchase a single fare at a ticket office for €62 and one can avail of an online fare for €43.99 if it is bought up to 90 minutes beforehand. At present a single fare ticket from Cork to Dublin costs €9.99 if one books it online in advance, which is a very good offer. Prices vary and depend on whether one turns up on the day of travel at a ticket office or books a ticket in advance. The day return fare can be the same price as a single ticket but only on limited trains. That fare may have caused some confusion. One can avail of very good deals if one books online.

Helen McEntee (Meath East, Fine Gael)
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I welcome the delegation. This is my first day at this committee, so I will not give the delegation too much of a grilling.

My first question is for the CEO of Bus Éireann. Mr. Nolan said that Dublin Bus had received €6 million and Iarnród Éireann had received €30 million. Why was none of the funding put into Bus Éireann when €35 million was saved and a further €20 million would have been saved? Where did the saving come from? He said that its services were largely protected, so what other areas did the saving come from?

Mr. Nolan expressed the sentiment that he wanted to keep the buses full and to expand the routes, but it is important for the company to keep its current number of passengers. I represent and am from a constituency in Meath which has a very good bus service. However, the main street of Ashbourne will be dug up in September and a bus route will be affected. I have spoken with the local chamber of commerce and many community groups. They have informed me that they have tried to get in touch with the organisation seeking to change the route and make it more accessible so that the company and the people of Meath East will not suffer. Perhaps Mr. Nolan could examine the matter and expand on it a bit.

What was the cost of the real time information signs? The CEO said he had noticed a substantial increase in the number of people availing of the bus routes. How did he link the increase to the new signs?

My last question is for Iarnród Éireann. Does it plan to extend the rail link from Dunboyne to Navan? The initiative has been talked about for a long time.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I have read the reports but found them scary. However, I have seen evidence that the companies have turned a corner. It is difficult to reduce costs by €26 million per annum while continuing to provide a service, but the adjustment is being made. Payroll is 55% of the cost base. How does that compare with similar operations in other jurisdictions? Fuel costs have increased by €14 million. I read in one of the reports that there are revenue protection officers. It would make more sense to negotiate as a group rather than as individual companies when purchasing in high volumes, particularly with regard to fuel, because there would be efficiencies of scale.

I do not understand one paragraph of one of Mr. Nolan's presentation, which was not a lovely piece of English. I understand it from Bus Éireann's point of view but not from the Government's or the taxpayer's point of view. It states:

When making these changes, we are conscious of the impact they might have on some customers. As such, we have been working with the National Transport Authority to see if Public Service Obligation (PSO) services could be operated to by-passed locations within the limited State funding available for such services.

That might look attractive from the company's point of view, but from the taxpayer's point of view it will ultimately cost more if the company is providing a separate service. I do not understand what "greater commercial freedom to make the necessary changes on our inter-city services" means.

The following is a fascinating piece of English. The presentation by Mr. Doherty, the chief executive of Dublin Bus, mentions "[i]mproved service simplicity for customers through a 36% reduction in route numbers." That is a good one.

Dessie Ellis (Dublin North West, Sinn Fein)
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Too simplistic.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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Will somebody explain what revenue protection officers are? I am not sure what they do.

How wealthy is the group pension fund? I read somewhere this week of a proposal for private bus owners to set up some sort of co-operative to align their forces in order to operate some routes more efficiently and effectively. Are the witnesses aware of those discussions? Would anything there present a risk to survival or sustainability plans? Is there scope for co-operation with private bus owners?

Ms Vivienne Jupp:

I congratulate Deputy McEntee on her election. I will get Mr. Nolan from Bus Éireann to answer the questions on the funding and the routes.

Mr. Martin Nolan:

Bus Éireann had a plan to get back to a break-even situation without any of that money. We did not require it. I will revert to the Deputy in regard to Ashbourne. I am not aware of the incident but I will come back to the Deputy and will deal with the officials in Ashbourne.

In regard to the RTPI or real time information system, the NTA provided it, so the cost would be with the NTA. I do not have the details of that.

Helen McEntee (Meath East, Fine Gael)
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Where will the €35 million and the further €20 million in savings be made?

Mr. Martin Nolan:

Just under 50% will be on payroll and the remainder will be on other savings, such as eco-driving and efficiencies in terms of running the buses a little harder.

Ms Vivienne Jupp:

Mr. Franks will answer Deputy McEntee's question on the railway to Dunboyne.

Mr. David Franks:

At the moment, the extension to Navan is on hold. It will next be considered during the Government's financial review in 2015.

Ms Vivienne Jupp:

In regard to Deputy Colreavy's questions, I am afraid I do not have an answer as to how the payroll, at 55% of the cost base, compares to other operators in other countries. I will have to come back to him on that.

The individual companies do not buy the fuel. We buy it centrally and we hedge in advance so that we are not caught by fuel cost changes. We know at the beginning of the year what our fuel will cost us. It only has an impact overall when fuel prices go up because we pay extra for it.

In regard to the pension fund, like any other pension system, CIE's two defined benefit pension schemes are in deficit to the tune of €481 million. That differs between the two schemes. The executive 1951 scheme, of which there are 2,153 members, has the greatest deficit, which is €384 million. The deficit in what is called the regular wages scheme, which has 6,674 members, is €97 million. The deficits in both of these schemes increased hugely during 2012 as the discount rate used to value future the pension liabilities of these schemes fell in line with bond yields in the market. This decrease in bond yields increased the future costs of these liabilities. We have submitted our funding proposal to meet the minimum funding standard and that has gone to the Pensions Board. We await a response from the Pensions Board to the proposals we have put forward.

In regard to the other questions the Deputy asked, I will ask Mr. Franks to talk about revenue protection officers and their role.

Mr. David Franks:

One of the key initiatives I have implemented since I joined Iarnród Éireann is to put a real focus on trying to collect the revenue due to us. We are currently recruiting an additional 20 revenue protection officers to support that activity. We are also doing a lot of things in the back office to try to simplify our revenue protection plans and increase our ability to collect money from people who have been issued with penalty fares. In the round, we are trying to raise an additional €1.5 million in this financial year from that activity.

Ms Vivienne Jupp:

Mr. Nolan will pick up the rest of the questions.

Mr. Martin Nolan:

This leads back to Deputy Fleming's points also. We brought in an international study group and it found we were as efficient as any of our peers. Since then, our subvention has gone down by 30%. The private operators are more commercial and more business-oriented. The inter-city business shows that up. We still go into the towns and villages at no additional cost to the State and we try to do that as much as we can. Some of the rot is caused by our acting in the national interest. The private operators are serving the larger population centres so we need to do that as well, and that will cause us to bypass locations. We need that commercial freedom because we cannot run a loss-making service against other providers that do not get funds from the State.

Private bus operators have various groupings. I am aware they are in discussions but I do not know where they are in that regard. We co-operate with them because they are the biggest provider of services to us. We pay €114 million to private bus operators each year to provide services, mainly for the school transport scheme.

Ms Vivienne Jupp:

Mr. Doherty might want to explain his English.

Mr. Paddy Doherty:

With regard to service simplicity, one of the big criticisms of the Dublin Bus network four or five years ago would have been that it was complex and hard for a new user to understand. One of the prime objectives of the Network Direct project was to simplify the network by making it more understandable for customers. We started off with approximately 170 individual route numbers and we have reduced it to something of the order of 115. It does not mean we have taken out routes or services. As the Deputy will know, we had duplicated areas and we amended and redesigned so that, by and large, we cover the same catchment and population. We provide a service across the whole community but it is a lot more simple now. While we have 19 or 20 core big routes, we still have 95 relatively small routes which are providing local community services. That was the nature of the project and it has been successful in so far as it is now delivering in terms of usage.

Michael Colreavy (Sligo-North Leitrim, Sinn Fein)
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I was being a little bit tongue-in-cheek with that because it looked like a line a Government might use around budget time - "We have reduced in order to simplify."

To get back to the point on towns and villages being bypassed, I understand the point of view of Bus Éireann, and perhaps this is a discussion that needs to be held with the Government. If I look at this not from Bus Éireann's point of view but from that of a representative of the taxpayer, it will cost the taxpayer an awful lot more if another vehicle must go into those towns and villages. I do not know how it can be resolved.

Tom Hayes (Tipperary South, Fine Gael)
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I understand the Deputy's point, but it may be an issue for another forum. If Deputy Ross could confine his contribution to three minutes, he may speak again later, as other members may wish to speak as well.

Shane Ross (Dublin South, Independent)
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I thank the witnesses for attending. Who are the four people behind them?

Ms Vivienne Jupp:

They are Mr. Andrew McLindon, who does PR for Dublin Bus, Mr. Mike Flannery, chief operating officer at CIE, Ms Maria Brennan, who does PR for Dublin Bus, and Mr. Barry Kenny, who looks after CIE and Irish Rail.

Shane Ross (Dublin South, Independent)
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I thank Ms Jupp. How much are the people beside her paid?

Ms Vivienne Jupp:

I cannot remember off the top of my head.

Shane Ross (Dublin South, Independent)
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They can tell us individually.

Mr. Martin Nolan:

I am paid €184,000.

Mr. David Franks:

I am paid €225,000.

Mr. Paddy Doherty:

I am paid €189,905.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Are there benefits in kind?

Mr. Martin Nolan:

We have pensions.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Is that all?

Mr. Martin Nolan:

A car allowance also.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Everyone has that.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Are there other benefits such as VHI payments?

Ms Vivienne Jupp:

No.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

The annual report does not indicate what board members are paid. What are they paid?

Ms Vivienne Jupp:

That information is in the annual report.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

It mentions that the Minister pays them, but I cannot see the amounts.

Ms Vivienne Jupp:

They are there.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

On which page?

Mr. Paddy Doherty:

Page 35 of the Dublin Bus accounts, note No. 3.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

I am reading CIE's annual report.

Ms Vivienne Jupp:

Pages 27 and 28. We must indicate what the-----

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

That is what I thought.

Mr. Franks referred to contracts awarded by Iarnród Éireann. Did it award a track maintenance contract recently?

Mr. David Franks:

We are in the process of doing so.

Shane Ross (Dublin South, Independent)
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Has it been awarded?

Mr. David Franks:

Not yet.

Shane Ross (Dublin South, Independent)
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Is there a proposal?

Mr. David Franks:

Yes. We are in the process and have a preferred supplier. It is for track machinery.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

How much is the contract worth?

Mr. David Franks:

I cannot recall off the top of my head.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Is it not a large contract?

Mr. David Franks:

Yes.

Shane Ross (Dublin South, Independent)
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What is it worth approximately?

Mr. David Franks:

I would rather not get this wrong. We can provide the Deputy with the details.

Shane Ross (Dublin South, Independent)
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I believe it is worth €30 million. Is Mr. Franks telling me that he does not know?

Mr. David Franks:

The Deputy could be right, but I cannot remember off the top of my head. We can provide the Deputy with the details.

Shane Ross (Dublin South, Independent)
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Who is responsible for awarding the contract?

Mr. David Franks:

Our procurement team.

Shane Ross (Dublin South, Independent)
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Yet Mr. Franks does not know what it is worth.

Ms Vivienne Jupp:

It would have come to the CIE board for approval, given the scale of the money involved. We have policies and procedures on deciding contracts. Various sums must be notified to the CIE board and various benchmarks must be notified to the other boards. The procurement process is detailed and rigorous.

Shane Ross (Dublin South, Independent)
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The contract's value is important. There must be a global amount that CIE will be required to pay as a result of it.

Ms Vivienne Jupp:

Over a seven-year period. Even if the figure was €30,000, which I cannot recall-----

Shane Ross (Dublin South, Independent)
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Thirty million.

Ms Vivienne Jupp:

Yes - it would be paid over a seven-year period. I do not recall the exact value.

Shane Ross (Dublin South, Independent)
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Will Ms Jupp provide an approximate value?

Ms Vivienne Jupp:

I am afraid I cannot. I must revert to the Deputy with the information, as Mr. Franks-----

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

This is extraordinary. It is a large contract.

Ms Vivienne Jupp:

We have lots of contracts.

Shane Ross (Dublin South, Independent)
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It is €30 million plus. I can tell Ms Jupp that now.

Ms Vivienne Jupp:

We have even more than that in other contracts.

Shane Ross (Dublin South, Independent)
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I am asking a perfectly reasonable question about a contract that is going to tender, yet the chief executive is claiming that he cannot tell me how much it is worth.

Mr. David Franks:

I can provide the information to the Deputy, but I do not have it at my-----

Tom Hayes (Tipperary South, Fine Gael)
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Will Mr. Franks supply it to the committee as quickly as possible?

Ms Vivienne Jupp:

We would be more than happy to do so.

Shane Ross (Dublin South, Independent)
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When did the contract go to tender?

Mr. David Franks:

The process has been under way for a long time. It ran into difficulty during the procurement phase and the existing contract was extended. It has been concluded and is imminent in terms of going live.

Shane Ross (Dublin South, Independent)
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Did Mr. Franks say it had been concluded?

Mr. David Franks:

No. We are in the middle of the final negotiations with the supplier and are arranging for safety certifications and other elements that are essential for the contract to go forward.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Iarnród Éireann has selected someone?

Mr. David Franks:

Yes.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Is it Balfour Beatty?

Mr. David Franks:

Yes.

Shane Ross (Dublin South, Independent)
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Is Mr. Franks aware that Balfour Beatty was fined a large amount as a result of an accident in the UK?

Mr. David Franks:

I am aware of it.

Shane Ross (Dublin South, Independent)
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Does Mr. Franks know what that amount was?

Mr. David Franks:

I cannot remember the exact details, but approximately £10 million.

Shane Ross (Dublin South, Independent)
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That was the result of a crash.

Mr. David Franks:

Yes.

Shane Ross (Dublin South, Independent)
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Yet Iarnród Éireann is proposing to give it the contract.

Mr. David Franks:

The supplier needs safety certification, just as it does in the UK, where it is already operating. That certification is still in place. The supplier can only take on this contract if it receives the same certification. This is one of the aspects that is under way.

Shane Ross (Dublin South, Independent)
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Is Mr. Franks aware of the fact that Balfour Beatty was fined £2.25 million following a serious fraud investigation?

Mr. David Franks:

Yes. It brought the matter to the attention of the Serious Fraud Office, SFO, in the UK. It is seen as having dealt with the matter professionally.

Shane Ross (Dublin South, Independent)
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It dealt with the fact that it was fined £2.25 million professionally.

Mr. David Franks:

The company identified a problem in a contract that it had taken. It alerted the authorities. There were no criminal consequences, as it blew the whistle on itself.

Shane Ross (Dublin South, Independent)
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It was still fined £2.25 million. It was fined £10 million elsewhere for being negligent in the case of a crash, yet Iarnród Éireann is still awarding it this contract. Was anyone else involved in the competition for this tender?

Mr. David Franks:

There was another-----

Shane Ross (Dublin South, Independent)
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It withdrew.

Mr. David Franks:

Yes.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Only one party was involved.

Mr. David Franks:

In the final negotiations. We ensured that when negotiating the contract, we knew exactly what it would cost us to operate. If necessary, we would have withdrawn the tender and undertaken the work ourselves. We have achieved an improvement on the current contractual terms. We will make savings. In my address, I made the point that we were examining all of our contracts to generate savings. This forms part of our approach to tackling the company's financial problems.

Shane Ross (Dublin South, Independent)
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I will say no more, but it is staggering that the chief executive does not know how much the contract is worth. It is more than €30 million, but he stated that he would have to revert-----

Mr. David Franks:

May I just-----

Shane Ross (Dublin South, Independent)
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Mr. Franks stated that he did not know.

Mr. David Franks:

I do know, and I will provide the information to the Deputy. I just do not have it-----

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Give it to me now.

Mr. David Franks:

I will provide the information-----

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

In that case, Mr. Franks does not know.

Mr. David Franks:

I will provide the information to the Deputy.

Shane Ross (Dublin South, Independent)
Link to this: Individually | In context | Oireachtas source

Mr. Franks can find out what it is. The contract has been given to a company that has been fined £2.25 million by the SFO. There was no competitor, as the other company withdrew, and the supplier was also fined £10 million for its responsibility in a crash. This is worrying.

Mr. David Franks:

Balfour Beatty needs safety certificates to operate in the UK, where it is still operating despite that fine. It has gone through due process in Ireland. We have examined all of its safety credentials. Before it can go live in Ireland, it must achieve the same safety certification from the Railway Safety Commission. It will not be able to start its contract otherwise.

Shane Ross (Dublin South, Independent)
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I suggest that Iarnród Éireann at least have a competition and consider another company. It has only considered one.

Mr. David Franks:

The other supplier withdrew. I will repeat the position. We ensured that we could work out the price of undertaking the work ourselves. The price from Balfour Beatty is an improvement on that.

Ms Vivienne Jupp:

The board's remuneration is detailed on page 45.

Shane Ross (Dublin South, Independent)
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I thank Ms Jupp.

Tom Hayes (Tipperary South, Fine Gael)
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Are there further questions?

Brendan Griffin (Kerry South, Fine Gael)
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I will make a comment to Mr. Franks. It would be a shame for the witnesses to leave this meeting without my having mentioned the point.

As somebody who uses the inter-city rail service fairly regularly, I must say that it has improved immensely in recent years. There is always room for improvement, but compared to ten years ago, when the old wooden carriages were part of the stock on the Mallow to Kerry section, we have come a long way. Customers appreciate the availability of Wi-Fi and it makes the journey feel shorter. If the company can keep pushing that modernisation agenda and keep up with technology, it would certainly enhance the passenger experience. From time to time, we get representations from tourism interest groups and from individual passengers, and if communications can be kept open with the various companies on resolving those issues, then that would be very much appreciated. There has been great improvement and hopefully we will see more of it in future.

Ms Vivienne Jupp:

There is a big focus on improving the journey times and improving the experience with Wi-Fi and so on. I thank the Deputy for his comments.

Dessie Ellis (Dublin North West, Sinn Fein)
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The pension deficit of €481 million seems massive and I am not sure how such a large deficit can develop. How does the company get out of a situation like that? Surely it will have major repercussions on the company. It seems like a massive problem to me.

Ms Vivienne Jupp:

Every company in Ireland with a defined benefit scheme has been affected by the downturn in the equities market and this has led to a massive pension deficit. We would not be the only company with deficits. I would say that all companies have them.

Dessie Ellis (Dublin North West, Sinn Fein)
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That is one of the biggest deficits I have seen.

Ms Vivienne Jupp:

Aer Lingus and the DAA have deficits that are significantly bigger than this one.

Tom Hayes (Tipperary South, Fine Gael)
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The issue of Expressway routes bypassing towns was mentioned earlier. Are there further changes due? Are there any new developments in the inter-city routes and the Expressway routes?

Mr. Martin Nolan:

We are reviewing all of our routes. It can be difficult to communicate this to staff, public representatives and the public when we are in competition with other companies on these routes. We make sure that the staff, public representatives and then the public are informed in turn, so that we can keep everything on board. However, we will have to make changes.

Tom Hayes (Tipperary South, Fine Gael)
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Will these changes be in the short term, or are we talking about longer term?

Mr. Martin Nolan:

We will spread them over a period of time, but certainly this year.

Tom Hayes (Tipperary South, Fine Gael)
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Before we conclude, I would appreciate if the witnesses sent on information that was requested so we can pass it on to the members. I thank Ms Jupp, Mr. Nolan, Mr. Franks and Mr. Doherty for attending and engaging with us. The issues in respect of public transport are very important to members and we are aware that there are challenging times ahead. We wish you well in confronting those challenges.

Ms Vivienne Jupp:

Thank you very much.