CIE is bust. Last week its cheques were on the brink of bouncing. How did it come to this? How could a company with an annual subsidy of €278m find itself on the verge of insolvency?
There is 'something of the dark' about CIE. Or at least a very thick fog embracing the murky company. It has always wrapped itself in a blanket of secrecy.
Despite its complete dependence on the taxpayer CIE is not subject to the Freedom of Information Act. Journalists seeking information will readily receive the time of the 44 bus or the trains to Cork -- but when they ask what the directors are cooking up, the shutters come down.
Probably for good reason.
OK. We hear the practised waffle when the fares rise. We know when the bus routes are cancelled. Its spinners know how to kick the public in the teeth with a gentle smile.
Last week CIE spinners, paid handsomely out of the taxpayers' €278m subsidy, were dressing up CIE's self-inflicted insolvency with platitudes. It was all down to "the recession and rising fuel costs".
When costs are cut, these guys should be first for the firing squad.
Nothing is ever the fault of CIE and its management. The guys are paid six-figure sums for running the company into the ground. Of course, the CIE spin is that they must be paid these vast salaries. Otherwise we might lose them to the, er... competition.
The local competition, in the few places where it is allowed, would not touch them with a barge pole. No overseas recruitment agent has been sighted within spitting distance of a CIE office since the foundation of the State.
But back to the dark side.
What the spinners will not tell you is that CIE and its three subsidiary companies failed to produce accounts on time this year. And not for the first time .
Semi-state companies are allowed six months to produce their accounts, far longer than publicly quoted companies -- which are allowed four months. This year CIE once again failed to provide audited figures on time. They are now a month past their already generous six-month deadline.
This year, CIE did not simply flout the rules. Instead it sought another three months breathing space from Minister for Transport Leo Varadkar.
Astonishingly Leo, against all his instincts, gave them the extension. It was a mistake. Insiders say that it was granted because the limping invalid of the State sanatorium did not want its banks to see the dire state of its finances.
The accounts contain details of the State company's lamentable 2011 performance. We know that the situation at CIE is hopeless. Did they want to hide the true state of their finances from their creditors? They were right up against their €105m overdraft -- not to mention their €278m subsidy.
Perhaps Leo asked whether the State company was trading recklessly. Hopefully he asked CIE's understanding auditors whether they were qualifying the accounts. Hopefully he sought reassurance that the company was a going concern. As usual we are being kept in the dark.
Never mind. The accounts have now been suppressed for another three months. The Government's first response to the crisis was to blink and grant a delay, thus keeping the public, the media and the Oireachtas in ignorance about the accounts. Its second was to hand over €36m to the bankrupt company. Its third will be to grant another fare increase.
CIE must be the only company in Ireland to receive everything it wants. Earlier this year it was granted outrageous fare increases. This was a piece of sleight-of-hand to compensate it for the simultaneous cut of €21m in the subsidy! So far in 2012, this drowning monster has seen its subsidy reduced by €21m, then increased by €36m, -- while its bus, train and Dart fares have increased by double digit percentages.
Does this mean that Leo Varadkar, one of the finest ministers in the Cabinet, has gone native? The jury is out, only because he has previously shown a rigour, uncharacteristic of his government colleagues. This time Leo's Government was itself bounced into bailing out a semi-state. Insiders are adamant that the Cabinet was ambushed, that CIE management had put a gun to its head.
The CIE story sounds ominously like the bankers in September 2008, who told the Department of Finance that the banks would not open the next day .
This time it was CIE, wielding a warning at the last minute that the buses would not run unless the State did its duty. So the Cabinet capitulated. Will they never learn?
Just as Anglo should have been cut adrift, CIE should have been allowed to stew for a few days. Bankers and semi-state oligarchs hold too much power. Both should have been eyeballed.
The Government threw in the towel. No heads have rolled. But, wait for it, in the coming months we are likely to see the retirement of a few key CIE figures. They will abandon the company with copper-fastened pensions and golden handshakes.
Just like the big bankers did.
Can anyone be surprised by CIE? The directors are used to pushing governments around.
In the days of the last executive chairman John Lynch, information was always held tight to the board's bosom. Directors who were invited to attend Oireachtas committees refused. A report costing half-a-million euro and making findings about fraud in Iarnrod Eireann was not revealed to the minister or the public. Not a mention was made of such mighty items of expenditure in the annual accounts. A mysterious settlement of over €1m with the controversial company Greyhound Waste was kept a secret.
Today, just like the banks, it is bust. No one has ever paid a price for the shenanigans at the semi-state's temple of darkness. Many of the most culpable are rewarded with riches.
Next time Leo should let the cheques bounce.