CIE given €36m cash injection to avert cuts in services
CIE was given an emergency €36m cash injection last night to stave off widespread cuts in bus and rail services.
The Cabinet signed off on the extra allocation yesterday -- but ordered the state transport body to identify assets that could be sold off to pay back the money.
It is unclear to what extent bus and rail services were at risk.
The three companies that make up CIE -- Iarnrod Eireann, Bus Eireann and Dublin Bus -- have all been hit by falling passenger numbers and rising fuel costs.
The cash injection is a policy U-turn after the state subvention was severely reduced in recent years.
The €36m will come through the Department of Transport, Tourism and Sport.
The increased CIE allocation from the department budget more than half way through the year would mean corresponding cuts in the areas of sport, tourism and other areas of public transport, including some already agreed capital projects.
Transport Minister Leo Varadkar has said that some capital spending will have to be deferred and CIE non-core assets -- including property and land -- sold to fund the €36m bailout.
An inventory of the assets and their expected value is to be drawn up. One key asset up for sale will be Iarnrod Eireann's fibre-optic cable network.
Mr Varadkar refused to go into detail about what spending in tourism and sport would be hit by the diversion of funds.
He said it was a question of deferring spending into next year, rather than cancelling anything in particular.
The three CIE companies now have a deficit of more than €45m.
Mr Varadkar said the intervention would "ensure that CIE remains adequately funded for the immediate future and can continue to provide a sufficient service to the travelling public.
"It was a hard decision, but a necessary one," he added.
"CIE is loss-making 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."
The state subvention had also been cut in recent years, forcing the companies to embark on major cost-cutting plans.
However, the €36m allocation reverses the reductions of the last two years and restores CIE's subvention to more than its 2010 level.
In a statement, CIE said its group of companies were undertaking an urgent series of actions to address the company's financial situation.
"The group has recorded losses in each of the last three years, and with ongoing economic uncertainty, the need to ensure the companies are on a sustainable financial footing is imperative," it said.