Michael D Higgins (Galway West, Labour)
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Question 129: To ask the Minister for Transport the reason CIE was recently granted a fare increase of 5% effective from the start of 2005, and not the 8% rise sought by the company; his views on whether the annual public subvention received by CIE is insufficient to meet the company's costs, necessitating it to seek this annual fare increase; and if he will make a statement on the matter. [4786/05]

Martin Cullen (Waterford, Fianna Fail)
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Last year CIE applied for a fares increase for 2005 for each of the operating companies averaging 8%. Following a detailed examination of the application and the financial position of each of the companies, I agreed to a fare increase which would yield a 3.5% increase in revenue to CIE. This in effect meant that most Bus Átha Cliath fares increased by 5 cent or 10 cent and a range of increases applied across the board in Bus Éireann and Iarnród Éireann fares depending on journey distance.

The annual subvention to the CIE companies is paid in respect of the provision of socially necessary but non-commercial transport services. The subvention has been increased annually by 5% since 2001. I am satisfied that the increase in fares yield, together with the 5% increase in subvention and cost improvement measures being undertaken by the companies are adequate to enable CIE to maintain the financial stability of the group.