The Cabinet has today (Tuesday) agreed to increase the subvention to CIE by €36 million in order to protect public transport services.
Minister for Transport, Tourism & Sport Leo Varadkar along with Minister for Public & Commuter Transport, Alan Kelly have secured the support of the Cabinet in raising CIE’s 2012 subvention to €278 million, the fourth highest level ever allocated. This has been achieved by re-allocating funding within the Department of Transport, Tourism & Sport.
“This intervention by the Department will ensure that CIE remains adequately funded for the immediate future and can continue to provide a sufficient service to the travelling public,” Ministers Varadkar and Kelly stated.
“It was a hard decision, but a necessary one. CIE is lossmaking as a group and its financial position is very difficult. The company has run up a substantial debt. However, we are working on a solution.
“To ensure that the company is placed on a more sustainable footing we will continue to engage with the CIE Chairperson and the boards of the three CIE companies, which have already implemented wide-ranging cost reduction programmes. The Chairperson and boards will continue to negotiate with the unions and other interests to drive the cost reduction programmes.
“We have had to reduce funding from other areas of the Department in order to increase the subvention. This will involve cutbacks or deferrals in capital spending in the areas of sport, tourism, other areas of public transport, smarter travel, and maritime operations. Further funding will be raised through the sale of non-core assets by CIE.
“While the increased subvention will help to address the current difficulties in the immediate future, it will not be sufficient to correct the underlying financial and structural problems in the CIE companies.
“This funding is being allocated because we are conscious of the need to maintain the public transport service, and because we recognise that the financial position of CIE is very difficult. The CIE financial position has deteriorated as a result of falling passenger numbers and rising fuel costs. The Government subvention, as is the case with most State companies, has fallen in recent years as a result of the economic crisis. However, this new allocation reverses the reductions of the last two years and restores CIE’s subvention to more than its 2010 level.”
Department of Transport, Tourism and Sport Press Office: 01 604 1087/01 604 1090
Nick Miller 086 6992080