lThe company breached its borrowing limits earlier this year and it has to renegotiate
its banking facilities in 2013.
lThe CIE board says annual fare increases are needed to address the crisis.
lCosts have to be cut, including payroll, which could result in job losses.
lOnly basic maintenance will be carried out – and there will be no new buses, trains or other
While the CIE deficit is now €6m compared with €53m in 2010 thanks to cost-cutting, auditors PWC also warned of question marks over the company's ability to survive.
The accounts show a "material uncertainty which may cast significant doubt about the group's and company's ability to continue as a going concern".
The CIE board has admitted that further cost-cutting is needed as the "outlook remains extremely difficult" and that it was relying on Government support to stay in business.
"The board is confident that planned actions, together with the additional funding committed by the Department of Transport; the additional revenue generated by fare increases; the ongoing support of the Government and the successful implementation of cost-reduction measures, will ensure that the group can achieve financial sustainability," it said in a statement.
The Government had pledged a €36m cash bailout for CIE with the aim of preventing further cuts in bus and rail services.
But the money was withheld, as CIE has been told to sell assets or borrow money to keep its services running.
Among the options being considered are the sale of the company's fibre optic cable network along the rail system and the sale of its interest in offices on Dublin's Spencer Dock – which could yield €25m.
CIE has already made significant savings with operating costs slashed by €174m since 2008 and employee numbers falling by 1,450.
Its state grant, designed to meet the costs of running unprofitable routes – called the subvention – has fallen by €41.4m, down to €265m in 2011.
Fuel costs have increased by €22m, and the elimination of a fuel rebate added €24m to annual costs while revenues have dropped by €81m in the same period.
Transport Minister Leo Varadkar is hosting regular meetings with the group and closely monitoring the group's finances. The Cabinet was briefed on the CIE annual report yesterday. It will be published later this week.
Last summer, Iarnrod Eireann introduced a voluntary redundancy scheme for its 4,100 workers which is aimed at reducing numbers by 450 by 2016.
Unions and management have agreed changes to pension arrangements, overtime, annual leave, sick leave and subsistence rates aimed at delivering another €12m in savings.
Dublin Bus employs 3,227 staff and Bus Eireann another 2,605. The company is seeking cuts in overtime, premium payments and changes to work practices from its employees, and talks are continuing at the Labour Relations Commission.