The financial problems of the country’s railways could be addressed in one of three ways – by the State providing millions in increased exchequer funding, by widescale route closures, or by a combination of both, including reform of the free travel scheme, the Government has been told.
A review, set up to look at possible solutions to the rail company’s financial sustainability, says Iarnród Éireann needs more than €640 million in additional finance over the next five years to tackle solvency issues and as compensation for previous under-funding.
A draft report, drawn up by the National Transport Authority and Iarnród Éireann following its review between March and June, provides the Government with options for dealing with funding problems at the State-owned rail operator.
The report says that if the Government provides no additional money the funding gap would have to be eliminated by the closure of whole swathes of the existing rail network.
It says that in such a scenario the majority of the rail network would be shut down, leaving only Dart, commuter services in Dublin and Cork and inter-city services from Dublin to Cork, Belfast and Limerick operating. There would be no services to the west or south east.
Redundancies
It hints that closures on such a scale could involve compulsory redundancies.
“Apart from the length of time it would take to implement, such a level of network reduction and line closures would incur substantial additional costs in targeted voluntary severance if, indeed, such a large-scale reduction in the organisation could be achieved solely through a voluntary several scheme.”
Alternatively, the review suggests the State could provide less in direct funding and smaller scale rail network closures could be put in place if the Government reforms the free travel scheme for pensioners.
It indicates that the funding gap could be reduced by a minimum of €16.8 million if four lines or parts of existing lines were closed. Under this scenario, the Limerick to Ballybrophy line would close as would the Limerick Junction to Waterford route.
The Ennis to Athenry line, which formed the first part of the planned re-opening of the western rail corridor and which only came back into service in 2010 at a cost of about €100 million, would also be shut.
The review also suggests that rail services south of Gorey would be earmarked for closure, leaving Wexford town and Rosslare without a rail service. The review suggests these rail closures could come into effect from 2018. But the report warns: "A significant reduction in the ability to travel by rail would be likely to impact negatively on how the country is viewed by international tourism markets and how strongly it can compete with other destinations for tourist travel."
A copy of the draft review, seen by The Irish Times, suggests Iarnród Éireann should receive an increase of nearly €6 million annually from a reformed free travel scheme.
It says despite a jump in the number of passengers availing of the free travel scheme from 3.9 million in 2009 to 4.6million in 2016, Iarnród Éireann's annual payment from the scheme, which is funded by the Department of Social Protection, remained at €14.6 million.
“Free travel scheme passenger journeys now represent 11.6 per cent of all passenger journeys while free travel scheme revenue represents only 7.5 per cent of total passenger revenue. It is no longer viable that Iarnród Éireann continue to subsidise free travel.”
Capacity crisis
The rail review also argues that the company is facing a looming capacity crisis with its existing fleet. It says part of the fleet which had been removed on cost grounds following the economic crash and reduction in passenger numbers, had now been re-introduced.
However, it maintains “this is not sufficient” to deal with potential capacity demands as passenger numbers recover.
“Already there are a number of inter-city and commuter routes which are approaching or exceeding capacity and new services at Middleton in Cork, the western rail corridor, docklands in Dublin and on the Sligo line has put increased pressure on fleet capacity.”
It suggests additional rail carriages will need to be bought.
However, the review says “the long-term sustainability of the rail network and the financial health of Iarnród Éireann will require the timely delivery of the Dart expansion programme in the greater Dublin area in order to improve local, regional and national access to the capital.”
The rail review concludes that the under-funding of Iarnród Éireann “cannot continue indefinitely”.
Iarnród Éireann is divided into train operations and infrastructure management divisions which maintains assets such as tracks, bridges, and signals. The review says its infrastructure management section has accumulated a significant backlog and the amount needed to maintain the network has increased from €247 million in 2011 to €276 million in 2016.
“This unsustainable level of funding has resulted in the ongoing deterioration of the infrastructure asset, giving rise to increased safety risks and unacceptably high commercial risks to the various revenue streams.”
The report comes at a time when staff at Iarnród Éireann are expected to seek pay increases along the lines of the 11.25 per cent over three years secured by workers in Dublin Bus. Separately, drivers are pressing for a shorter working week and payment for past productivity. Temporary pay cuts of between 1.6 and 6 per cent, imposed some time ago to deal with the company's financial problems, ended this month.
