Séamus Brennan (Dublin South, Fianna Fail)

I thank the Cathaoirleach for his kind welcome to the House.

Iarnród Éireann has been incurring losses in recent years in its rail freight activities and in the current year alone is expected to lose €14 million. The business has been severely hit by the closure of the IFI plant at Arklow which will result in a loss of revenue of €3 million per annum. The rail freight business had been under pressure for some time arising from increased competition from the road sector, rising overheads and the changing nature of industrial activity with its continuing focus on competitiveness and the concept of just-in-time deliveries.

In January 2001, a small top level group was appointed to help Iarnród Éireann face the challenges of expanding its rail network and delivering improved services to customers. The group was appointed following discussions between the then Minister, the trade unions and the chairman of CIE and consisted of Bill Attley, former general president of SIPTU, Kevin Bonner, consultant and former Secretary General of the Department of Enterprise, Trade and Employment, and John Dunne, chairman of IDA Ireland and former director general of IBEC. Dr. Edmond Molloy of Advanced Organisation and Management Development Limited was appointed to assist the group.

Among its functions are reviews of the industrial relations environment within the company and the challenges facing management, staff and trade unions to achieve maximum value for the customer and taxpayer from the major investment in the rail system over the coming years. It was also asked to review the current structures, procedures, processes and practices at all levels within the company through which it will manage the necessary changes. In the light of these reviews, the group was to make recommendations regarding the acceleration of improvements in the organisation and management of the company in order to deliver a higher quality, customer focused service as well as value for the taxpayer.

In relation to rail freight, the report recommended that a special and thorough study of the issue be commissioned as a matter of urgency. The review group suggested that long range plans would need to be established to develop the rail sector as a whole. As a follow up to the group's report, the Department engaged international rail consultants, Booz-Allen and Hamilton, to undertake a strategic rail review to examine the future development of the national rail system.

The terms of reference of the strategic rail review are to prepare a strategic framework for future rail development in Ireland over the next 20 years having regard to the spatial planning context provided by the forthcoming national spatial strategy; the extensive public transport investment programme under the national development plan; the relevant findings and conclusions of Iarnród Éireann – The Way Forward; and the desirability of rail freight services to include consideration of existing freight capacity and its potential for development.