Government drives to scrap CIE

THE Government is to scrap CIE and set up three independent companies to get the public transport network back on track.

Transport Minister Seamus Brennan will announce the restructuring of the national rail, bus and Dublin transport services later this week.

The minister is pushing ahead with the radical change to bring more competition into the market and cut costs at Iarnród Eireann, Bus Eireann and Dublin Bus. The three are controlled by State-owned CIE (Córas Iompair Éireann).

“I am committed to the liberalisation of the market. I see no reason why bus and rail companies should not compete with each other and with the private sector,” Mr Brennan said.

The minister warned change was inevitable for CIE last July after it emerged the company made a net loss of 7.8 million in 2001. Over the same period, the Government’s financial support for the company increased by 20% to 245.1m.

The minister indicated such a level of investment was no longer sustainable and the company could “no longer go on this way”. He refused to grant CIE a fare increase of 20% across its services until the company’s operation was reviewed.

CIE is the holding company for Iarnród Eireann, Bus Eireann and Dublin Bus. While the three have their own sub-boards, everything has to be referred back to the main board for ratification.

“This leads to a lot of duplication and trade-off between trains and buses. My plan is to take CIE out of the equation,” Mr Brennan said.

The 200 people working with CIE will be absorbed into the three new companies, which employ more than 11,000 people between them. However, Minister Brennan insisted the move was not the first step towards privatising the public transport system.

“These three new companies will stay in State ownership and the Government will continue to subsidise public transport,” he said.

CIE received 500 million in current and capital State funding this year. If the three new companies expand their markets, the need for such large subsidies should decrease, according to the minister.

Private companies will be offered a franchise to run bus services throughout the country but the new State companies should not be afraid of this competition, Mr Brennan said.

“When Ryanair came into the Irish airline market, Aer Lingus thought it would be the end of them - but in fact the competition helped both companies to grow their markets,” he added.

Legislation will be introduced within a year to give these new companies full responsibility for their own businesses. The forum was set up to review the future of public transport and has representatives from the unions, employers and the Government.

The board of CIE is understood to be opposed to this move but the minister is determined to push ahead and will tell them this week there is no room for State monopolies.

“I am bringing in competition to give people a choice of service,” said Mr Brennan.