Timmy Dooley (Clare, Fianna Fail)
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To ask the Minister for Transport, Tourism and Sport the reason he withdrew funding of €36 million for CIÉ two months after approving it; and if he will make a statement on the matter. [45399/12]

Leo Varadkar (Dublin West, Fine Gael)
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The CIE group is struggling with a very difficult financial situation. On 24 July last, the Government decided to provide additional funding of €36 million to CIE to ensure that 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.  At this very difficult time for the public finances, it was not easy to find a large amount of additional funds. It involved very difficult decisions in terms of having to divert funding from other very worthwhile and important projects and initiatives and imposing sacrifices on others.

To date, none of the additional €36 million subvention has been paid over to CIE, but up to €36 million is still available.  I want to see significant progress being made on the development of a realistic, sustainable and robust business plan by CIE 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.

At the time of the announcement it appeared that these were advanced but unfortunately, despite a lot of hard work and best efforts, insufficient progress has been made to date. The Minister of Sate, Deputy Kelly, and I are meeting regularly with the chairman and senior executives  of the CIE companies and have met with union representatives as well. These various avenues are currently being explored and may reduce the need for the level of funding required.

Ultimately, however, it needs to be understood that if required, the additional funding for this year only provides a very short breathing space to CIE. It is essential that the management and staff in the CIE companies use this time productively to discuss and implement proposals to cut costs that can help to address the serious financial position in which the CIE group finds itself.

Timmy Dooley (Clare, Fianna Fail)
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Does this mean that, in the event of CIE being unable to make the saving the Minister is seeking, €36 million is still available that has been reassigned from the projects mentioned and not spent on the original plans? I asked the Minister before what projects this money was taken from but I have yet to get an answer.

How does the Minister see CIE being able to make the necessary changes within the next two months if it is to come under €36 million? The Minister said he has not cut off the funding but he has put it up to CIE to find the savings in an exceptionally short timeframe. Depending on the strength of the Minister's position, this could spell disaster for public transport. CIE has cut services in rural and urban areas to balance its books and that is impacting on the company's ability to maintain its comprehensive network. Iarnród Éireann and Dublin Bus face a deficit of €40 million this year. While it is always possible to make savings, the scale the Minister is demanding makes it very difficult. It is my view the only way this can be dealt with is to increase fares and reduce services. When the Minister was in opposition, he hit out at fare increases, and he was right to do so, but he seems to have changed his mind.

Seán Barrett (Dún Laoghaire, Ceann Comhairle)
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There is a time limit on this question. The Deputies have only two minutes left between the two of them.

Leo Varadkar (Dublin West, Fine Gael)
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The €36 million is still available and to the extent that I can, I will not allow public transport to collapse. The money is available but it will only get the companies to the end of the year. I will not have enough money next year and €36 million will not solve the problems of the company next year. In the past, Governments could come up with more money if it was needed but that is not how the country works anymore. We are part of an IMF-troika programme and there are spending ceilings that cannot be broken. This year, I might be able to take money from one pocket and put it into the other, rob Peter to pay Paul and kick the can down the road, but I am running out of pockets and I am running out of road. If we do not see progress on the four issues I have mentioned, I will not be able to find the money to keep the companies operating by the middle to end of next year. Then, there will be no choice and public transport will fail. I do not expect CIE to find €36 million by 31 December, but it must make progress on those four areas so it does not require an additional subvention next year because I will not have it.