Two key State agencies are on the verge of collapse with An Post and Bus Éireann now in jeopardy.
An Post is set to put the price of stamps up to almost €1 to try up make up for massive losses in income.
Meanwhile, Transport Minister Shane Ross has told Cabinet that the country’s State-funded bus service is at “crisis point” and could be at risk of becoming insolvent in the next 24 months.
With the two State-funded services, which are the life-line of many rural communities, now in grave danger, the Government will have difficult decisions to make around funding.
Bus Éireann expects to lose around €5.6m this year, after similar losses last year.
However, on top of shoring up service providers such as Bus Éireann and An Post, the Government faces a public pay crisis with employees.
The Irish Congress of Trade Unions (ICTU) has agreed to accept an invitation from Minister for Public Expenditure and Reform Pashcal Donohoe to go into talks around anomalies in the Lansdowne Raod Agreement.
The anomalies have been created by the Labour Court settlement with the Garda associations which has angered many public sector workers who feel they have lost out by remaining within the Lansdowne Road pay agreement.
Yesterday, Bus Éireann attended the Labour Court in a bid to address a union pay claim of up to 21%.
However, Mr Ross said the company could not afford pay rises.
Bus Éireann chief executive Martin Nolan said the spiraling deficit is “mainly due to losses on our commercial Expressway services”.
He said the company would now be rolling out a cost reduction plan.
“To initiate this process, a number of key changes — including a reorganisation of the senior management team — has been agreed to implement these measures,” said Mr Nolan.
“The first of these is the appointment of Ray Hernan as chief financial officer to Bus Éireann.”
Separately, members of the Association of Garda Sergeants and Inspectors (AGSI) followed those in the Garda Representative Association and voted overwhelmingly to accept last month’s proposals from the Labour Court.
The ballot saw 71% of AGSI’s 2,103 members vote, with 95% of those voting to accept the proposals.
However, disagreement in Government has already emerged around where the €50m special Garda pay deal, accepted by members of the force this week, will come from.
Justice Minister Frances Fitzgerald told RTÉ yesterday that it would be “difficult” for her department to find all of that money from its own budget.
She said she would try to ensure the extra funds needed did not impact on frontline services, but this would be “challenging”.
A spokesman for the Taoiseach said: “Ultimately it’s a government issue. I do expect justice to have to factor in the cost to a large degree.”
It emerged that the financial crisis in An Post has forced the Government to lift the cap on postage prices in order to stop cuts to services.
Average stamp prices could now increase by at least a third from 72c to between 90c and €1 by next March, An Post sources told the Irish Examiner.
Communications Minister Denis Naughten secured approval at Cabinet yesterday to lift a price cap for An Post.
A decline in the volumes of mail being sent, as well as increased wage costs for An Post, are thought to be the main reasons why the price increase potential is being sought by the company.
Prices of stamps have already risen twice in the last two years.
Under current regulations, the communications regulator can agree to stamp price increases up to 75c over a five-year period.
The new legislation, next February, will remove this price cap.
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