Martin Cullen (Waterford, Fianna Fail)

Iarnród Éireann continues to pursue a policy of growing its rail freight business where opportunities present, such as in bulk and trainload traffic. The company has also sought to return the rail freight business to profitability. To help achieve this turnaround, Iarnród Éireann withdrew from loss-making groupage, palletised and single container rail transport resulting in the deficit on rail freight being reduced by 50% in the past three years.

Since 1999, Iarnród Éireann has invested over €1.6 billion in rebuilding the railways, with Government and EU support for the investment programme. This has delivered improvements in new trains, upgraded infrastructure and customer facilities. Although such investment has primarily focused on improving passenger services, where the need is greater and the demand strongest, the investment in improving rail infrastructure also has a direct beneficial impact on freight activities.

Iarnród Éireann has made progress in growing the rail freight business in areas where it holds a competitive advantage over road haulage, such as large volumes or trainloads over long distances. For example, Iarnród Éireann has reintroduced the trainload pulpwood business by modifying surplus wagons and providing additional services for Coillte between the west and the south east.

It has altered rail schedules and is currently providing three additional trains per week for Tara mines, with a potential to carry an extra 85,000 tonnes of lead and zinc between Navan and Dublin Port per annum. It has modified surplus platform wagons to provide a trainload service for containers between Ballina and Waterford Port.

Iarnród Éireann has undertaken extensive engagement with industry and transporters around the country to try to identify long-term sustainable business opportunities. It has had genuine difficulty in identifying opportunities that offer reasonable volumes of business on a regular basis. It is not feasible to run trains with one or two containers and Iarnród Éireann has not identified sufficient business, with the exception of the Ballina to Waterford stream, to group a number of separate activities together to form a viable load.

Most industry is focused on "just in time" transport and as our road network continues to expand and improve across the country, the role of rail freight becomes more problematic because all rail journeys involve road movements at each end of the logistics chain. Furthermore, in Ireland, distances are short. The experience across Europe is no different. Rail freight activities are most economic where distances are long, where there are large volumes to be transported and where the freight to be carried is not time-sensitive.

As part of the engagement with industry, Iarnród Éireann works closely with port authorities, such as in Dublin relating to transport of lead and zinc and Waterford relating to container traffic, to increase rail-based freight. The Government's ports policy statement recognises the need for the integration of ports as a fundamental link in the supply chain with other transport modes, including rail.

Additional information not given on the floor of the House.

In the absence of opportunities or proposals for viable long-term rail freight business, the development and use of fiscal incentives has not been considered.

As regards a role for new market entrants to the rail freight business, I have introduced the European Communities (Access to Railway Infrastructure) (Amendment) Regulations 2005, SI 780 of 2005, implementing EU Directive 2004/51, on the development of the Community's railways. These regulations open the freight market to competition from both domestic and foreign operators from 1 January 2006 in the case of international freight, and from 1 January 2007 in the case of domestic freight operations. To date, no serious representations have been made to my Department for entry to the market.

I am open to any views on how we can expand rail freight but the business environment is such that real opportunities have not been presented to me. The market for rail freight is now fully liberalised and if there are promoters who have identified opportunities I would welcome expressions of interest.

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