Ms Vivienne Jupp:

I thank the Chairman and members of the committee for inviting me to attend the meeting today. I have served as chairman of CIE since July 2011 and am honoured that the Minister for Transport, Tourism and Sport, Deputy Leo Varadkar, has nominated me to continue in the role for a second three-year term. Along with my colleagues in the CIE subsidiaries, we were the first appointees to the chairmanship of a State-owned body to present to an Oireachtas committee under the new arrangements back in 2011. In that context, I will briefly summarise my career history before focusing on the challenges and achievements of the past three years and the future challenges for and ambitions of the CIE group of companies.

My background is that I have a bachelor of commence degree and a masters in business studies from UCD. I have worked full-time in business since I graduated and had a 32-year career with Accenture, the global leader in consulting, technology and outsourcing. I started my working life as a management consultant and worked with many organisations across various industry sectors and Government Departments in Ireland. During that time, I led and delivered a succession of successful technology-enabled business change initiatives in both public and private organisations, initiatives which drove business success for those organisations. I was elected an Accenture partner in 1988 - the first woman in Europe to reach that level in the company. I ran Accenture's public service business in Ireland for several years prior to being promoted to my first role outside Ireland within the Accenture global network. I held operational managing director responsibility for profit and loss divisions at Irish, European and global levels. I spent the latter 12 years of my career with Accenture as a global executive director reporting to the global CEO.

I chaired the tourism recovery taskforce between 2011 and 2013 and led the development of the Great Britain Path to Growth strategy. This enshrined a new way of looking at and driving business from our key markets. In 2014, we have seen significant growth in visitor numbers - particularly from Britain, which is our largest market. My experience as a management consultant working in diverse industries enables me to understand CIE and the things that must be done exceedingly well if we are to succeed in achieving our vision.

CIE's vision is aligned to its statutory mandate, which is to provide socially necessary bus and rail transport in a well-functioning, integrated manner which contributes to balanced regional economic development and social cohesion at a reasonable cost. CIE has devolved certain of these functions to its three operating subsidiaries, namely, Bus Átha Cliath, Bus Éireann and Iarnród Éireann. Strategic direction, control and overall co-ordination is provided by CIE, but each subsidiary and business unit has a high degree of operating autonomy in its day-to-day business. CIE also owns CIE Tours, an innovative and highly respected tour operator in North America, the UK and mainland Europe. Indeed, CIE Tours is the largest single generator of inbound tour customers to Ireland from North America. The CIE holding company provides centrally a number of services that support the transport companies in their day-to-day operations. These include treasury, IT, property and legal-investigations services, as well as the management of the commuter advertising network contract.

In the early stages of my term as CIE chairman, it became apparent that the group was in the midst of what the Minister described at the time as a "perfect storm", arising from the cumulative effect of reduced Exchequer funding, reduced demand as a result of the severe decline in economic activity domestically, and increased fuel costs. My absolute priority was to help guide CIE through that storm, working with my board, the chairmen and boards of the subsidiaries, the management teams, the Minister and Minister of State with responsibility for public transport, and key stakeholders. In all our efforts to deliver reforms, we also kept in mind the needs of our customers.

It is incumbent on me to point out that the cumulative reduction in Exchequer-funded public service obligation, PSO, payments to the CIE group since the onset of the economic crisis in 2007 is more than €110 million, or 35%. To put this in context, funding in that period to the health sector has declined by just over 10%, to education by 9%, and to the Garda and the defence budget by 16%. CIE and its subsidiaries continue to play their part in trying to solve the equation of delivering the same level of public transport services on this reduced level of PSO funding. Much of what we have achieved in this regard has been delivered through additional efficiencies in work practices and reduced payroll costs. Now, as the economy recovers, there is a need to revisit what is an appropriate level of PSO funding for the services provided. In very simple terms, it is not possible for CIE and its operating subsidiaries to continue delivering current service levels in return for the current level of PSO and capital funding. This is especially so in the case of Irish Rail, as delegates have heard from Mr. Gaffney. I very much welcome the opportunity to work with the Minister, Minister of State and the Department to try to solve this difficult issue.

When the chief executive officers of the subsidiaries and I appeared before the committee last July, we outlined the immediate steps taken to address our cash issues in early 2012. Additional actions we have taken include a continued focus on cost reduction, including the successful implementation of pay and productivity measures with staff in all three companies, with a further process concluding in Iarnród Éireann; strengthened board committee oversight of cash management; improved central governance function over key financial risks; enhancing the central group finance function; developing an appropriate inter-company funding structure; and enhancement of information technology tools. We are beginning to grow our business again, with an increase in passenger numbers recorded in 2013. In fact, the group has exceeded ministerial targets to grow public transport users by 2% to date in 2014. Crucially, we successfully completed negotiations on a five-year €160 million bank facility with a consortium of banks, demonstrating objectively that the group is moving in the right direction in terms of creating a long-term financially sustainable business.

Despite the challenges we face, CIE is maintaining its comprehensive network of services through its subsidiaries, which continue to facilitate travel to all corners of the country in line with the group's mandate. In addition, CIE Tours had its best ever year in 2013, with revenues of €67.9 million and almost 50,000 passengers - a record number for the business. We continue to try to deliver a comprehensive level of services while receiving significantly less funding than in the past. My priorities for CIE reflect the challenges we face and include managing the group's debt and liquidity positions; a continued focus on reducing the group's cost base at a time when there is extraordinary pressure on the public purse; improving co-ordination of critical areas of common interest, including risk management, HR initiatives and stakeholder engagement; and an ambitious target for CIE Tours to be the leading tour operator to Ireland and Britain. It is important to note that the regulatory environment in which we operate removes control over many of the levers one might use in response to these challenges. In particular, the setting of levels of funding, fares, routes and timetables are all within the remit of the National Transport Authority.

A core responsibility of the CIE chairman is to ensure that our shareholder – namely, the Minister, as representative of the Irish people – is informed of the key strategic issues and challenges we face. We have been open and transparent with the Minister, Minister of State and their departmental officials and ensured they have all the necessary information to make policy decisions in the extraordinarily difficult environment they and the wider Government are facing.

I thank them for this support and am confident it will continue into the future.

In this regard we have been clear on the implications of the significant challenge of securing necessary capital investment by the Exchequer in public transport fleets and infrastructure. To maintain the current standard of the public transport fleet and rail network it is a significant priority of mine to work with the Ministers and the Government to secure the necessary investment to ensure that the nation's transport infrastructure, which is so vital to the country's economic well-being and recovery, does not deteriorate. This is a huge challenge for both the Government and CIE, given current constraints, and it includes the investment required by the national rail infrastructure network and the funding required to maintain the Iarnród Éireann rolling stock fleet at its current standard. Both of these issues were highlighted by Mr. Gaffney earlier today in greater detail. In the period from 2014 to 2016 all indications suggest there will be an acute shortage of capital available to the National Transport Authority, NTA, to fund the up-front purchase of new bus fleets for Dublin Bus and Bus Éireann. To assist with the purchase of new fleets the NTA and CIE are exploring options around leasing. While leasing may allow welcome investment in the bus fleets in that period, we must decide on a medium to long-term strategy for the funding for such investment.

Public transport facilitates a strong economy, environment and society. We must ensure that it is equipped to meet the needs of our economy and society as they emerge from the unprecedented upheaval of the past seven years. I look forward to working to ensure that public transport, as delivered by the CIE group of companies, is well equipped. Should our appointments be confirmed we, the chairpersons, boards, management teams and staff, Ministers, Departments and the NTA, will work collectively to this end with the elected representatives of the people, to whom we are all ultimately answerable.