Michael Ring (Mayo, Fine Gael) | Oireachtas source

I thank Deputy Dooley for raising this matter. In the absence of the Minister for Transport, Tourism and Sport, Deputy Varadkar, who is abroad on official business, I have been asked to respond on his behalf to the issue raised.

The 2011 annual report and financial statements for CIE were noted by the Government yesterday. The accounts, and those of its three subsidiary companies, were laid before the Houses of the Oireachtas earlier today. The accounts have also been published on the CIE and subsidiary companies' websites.

An unqualified audit report was issued by the group's auditors on CIE's 2011 financial statements. However, the auditors have included an emphasis of matter paragraph regarding the group's ability to continue as a going concern. The auditors note funding and trading difficulties give rise to uncertainty for the business and challenge the group's ability to continue to trade as a going concern. The board of CIE expects these uncertainties can be addressed through a range of measures including the realisation of non-core assets, reduction in cost base including payroll reductions, multi-annual fare increases and curtailment of the own-funded capital programme.

CIE suffered a loss, after exceptional items, of €6.1 million in 2011 compared to losses of €53.6 million in 2010 and €77.7 million in 2009. The improvement in the operating result over 2010 arises from lower voluntary redundancy costs and a gain of €22.3 million in 2011 on disposal of assets. The CIE Group is struggling with a difficult financial situation. On 24 July last, the Government decided to provide additional funding of €36 million to CIE to ensure the companies could continue to operate for the rest of 2012. This would bring the total subvention for this year to €278 million, higher than the subvention level for 2010 and the fifth highest level of subvention ever.

To date, the total subvention paid amounts to €252 million. At this very difficult time for the public finances, it was not easy to find a large amount of additional funds. It involved difficult decisions in having to divert funding from other worthwhile and important projects and initiatives, as well as imposing sacrifices on others. The Minister has indicated he wants to see significant progress made by CIE in the development of a realistic, sustainable and robust business plan to deal with the current economic realities, cost reductions with the CIE Group and employee support for same, the sale of non-core assets and the securing of new credit facilities.

These various avenues are being explored and may reduce the need for the level of funding required. The Minister and Minister of State, Deputy Kelly, are meeting regularly with the chairman and senior executives of the CIE companies as well as having met with union representatives. The Minister has pointed out that the additional funding for this year only provides a short breathing space to CIE. It is essential the management and staff in the CIE companies use this time productively to discuss and implement proposals to cut costs that can help address the serious financial position in which the CIE Group finds itself.

CIE is progressing the preparation of a revised five-year business plan with aggressive targets that will support the reporting of trading improvements in 2013. It is intended that the business plan will address the underlying financial challenges facing CIE so that CIE's public transport services can be provided efficiently and cost effectively over the plan period. In publishing its accounts, CIE has reiterated it will continue to engage positively with the Minister, his Department and the National Transport Authority to plan its business taking account of the constrained funding environment.

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