Noel Dempsey (Meath West, Fianna Fail)

CIE derives the bulk of its revenue from fare income. The Exchequer subvention to CIE in respect of its public service obligation amounted to 27% of its operating costs in 2007 compared with 22% in 1997. This growth in the proportion of costs accounted for by the Exchequer subvention reflects increased Government support for the provision of more and better public transport services and the increased costs of such services. I expect that CIE and its subsidiaries will, in addition to a high level of Exchequer support, have to rely increasingly on increased fare revenue, cost reductions and efficiencies to ensure their financial stability.

During the period 1997 to 2008, a total of €2.7 billion in Exchequer funding was paid to CIE in respect of compensation for its public service obligations. In the same period a total of €2.9 billion was paid in capital grants mainly in respect of rail development works. The bulk of the current subvention for services relates to rail services, with €191 million or 62% of the total subvention allocated to rail in 2008.

The recently published Deloitte cost and efficiency review reported that the levels of operational subvention of Dublin Bus and Bus Éireann are lower than in other EU member states. The annual subvention paid to CIE in respect of its PSO services has grown from €133 million in 1997 to €313 million in 2009, an increase of 135%. Decisions in respect of the level of funding in the years ahead will be made as part of the budgetary process and, in the case of Dublin Bus and Bus Éireann, taking account of the implementation of the recommendations of the cost and efficiency review. The Government will be seeking to maintain investment in the development and operation of public transport services at as high a level as possible to promote public transport use.

See this speech in context