Timmy Dooley (Clare, Fianna Fail)
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I welcome the Minister of State, Deputy Ring. Today we learned from a newspaper report that CIE’s auditors, PricewaterhouseCoopers, have stated the company’s status as a going concern is at considerable risk. This should cause considerable concern to the Minister for Transport, Tourism and Sport and the House. The rail section of CIE recorded a deficit of approximately €22 million, even after receiving a considerable subvention for current spending of €149 million. PricewaterhouseCoopers has warned about the company’s finances and whether it can be a viable business. The auditors spoke of, “Material uncertainty which may cast significant doubt about the group's and company's ability to continue as a going concern.” When an auditor with the reputation of PricewaterhouseCoopers puts such a commentary in the audited accounts of a company, which were also overdue, then immediate action must be taken by the Minister and the Government.

In July, I intensely questioned the Minister about his proposal to get an additional €36 million from other areas in his Department to shore up CIE’s financial position. He assured me then it was available. Last month, during Question Time we learned none of this money has yet been paid over. Again, the Minister was quite vague and talked about the necessity of CIE to demonstrate to him its capacity to make significant savings in the years ahead. He also stated that while he may be able to provide funding this year, he would not be able to do so heretofore.

Depending on the strength of the Minister’s position, this news today could spell a serious disaster for the public transport network. CIE, as the Minister of State knows, has cut rail and bus services in rural areas and across Dublin. That is fine if the Government’s requirement is about just having CIE as a going concern. It will be able to balance its books. However, as a public transport company, I believe the Government must ensure it meets its policy platform of having an integrated network and providing public transport to the citizens of this State. There is a significant difference between the fiduciary duties of CIE’s directors and the role of the Minister. It is not good enough to say it is up to the board of the company to resolve the issues. Quite frankly, it might not be in a position to do so. It must get its accounts in order, the directors’ fiduciary duties require them to balance the books and meet the company’s financial commitments.

However, the Minister has a different role in that he has to ensure we have a public transport network that is fit for purpose. I am concerned the Minister is taking a hands-off approach. I hope the Minister will give confidence to me and the travelling public that there will be no further diminutions of public transport services. We need to have a viable public transport network at a time when we are trying to reduce the number of private cars on the road and assist the economic recovery.

Michael Ring (Mayo, Fine Gael)
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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.

Timmy Dooley (Clare, Fianna Fail)
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I thank the Minister for his response but I am not happy with it. It is clear to me that the Government has decided the resolution of this matter will be through the further diminution of services provided by the CIE companies. I spoke to two Fianna Fáil councillors in Dublin today, Mary Fitzpatrick and Paul McAuliffe, about cutbacks in public transport services in Dublin. Paul McAuliffe told me earlier this year Dublin Bus proposed new bus routes for the Finglas-East and Glasnevin areas. After circulating the proposed routes to local residents, he received a large number of angry responses. Following his intervention with a local campaign to protect the services, they managed to save the No. 19 bus route which provided services for Grove Park and Tolka Estate. There is still a real loss of service in these areas. Some areas will no longer have services that are direct cross-city or provide access to certain hospitals. Mary Fitzpatrick informed me that Broomebridge railway station still needs building and structural improvements, new customer shelters and seating on platforms, improvements in lighting and upgrades of station and approach road signage.

These are all the things the Minister of State referred to as part of the reduction process. Effectively we are going to downgrade our public transport infrastructure and we will damage our public transport network as a result. There is a group outside the gate which the Minister of State can meet on the way out if he wishes. They are from Roosky and Dromod and they are highlighting the fact that the Bus Éireann bus now bypasses those villages. They are putting it to anyone who is prepared to sit and talk that the reductions are impacting on the Bus Éireann network and that as the Government starts to chip away at the services, it is dismantling a network that has been put together over many generations. The Minister of State must try to protect what is in place and find whatever capacity he can to do so.

Michael Ring (Mayo, Fine Gael)
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I put it to the Deputy that between 2007 and 2011 there was a 21.7% decrease in the amount of people using the services. CIE has been increasing the fares but it simply cannot go on. It will reach a stage when people will be unable to afford the fares. We need to encourage more people to use public transport. The reason buses, including the bus to which Deputy Dooley referred, are being taken off the road is that CIE and Irish Rail maintain that the problem is that people are not using them. We need to get more and more people using public transport.

I noted in my reply that the companies have received a record amount of subventions this year and the Government is committed to the €36 million. Arrangements are being made to draw down the funding in the amount of €16 million but CIE cannot continue to come back to the Government. CIE must put forward proposals and plans and put in place a business plan to ensure it is competitive. Other people and services have lost out as a result of this. Other commitments were made by the Department with that money in mind this year but we have had to use it to subvent CIE. It cannot go on and CIE must start to work on it. Deputy Dooley comes from rural Ireland, as do I. There are empty trains going up and down. Why is CIE not using the business brain to try to get more numbers on trains? Why does it not put on special offers and deals rather than remain dependent on putting up fares?