Wednesday, 5 February 1997
Dáil Éireann Debate
That Dáil Éireann notes with concern the turmoil at CIE which has resulted in the company's plans for change being in disarray, has led to a threat of an all-out strike at CIE and produced the recent massive disruption to services; condemns the Minister for Transport, Energy and Communications for failing to take a hands-on approach to the crisis and for not developing a strategic plan for CIE and the semi-State sector; and calls on the Minister immediately to bring forward policy initiatives and a White Paper to chart a future course for the development of the semi-State sector.
notes with approval the Government's major investment programme in the development and enhancement of public transport; commends the Minister for Transport, Energy and Communications on the significant progress which has been achieved in implementing the mainline rail investment programme and the public transport elements of the strategy recommended by the Dublin Transportation Initiative; supports the proposed introduction of public service contracts which will place the Government's financial relationship with CIE on a firm, medium term, objective and transparent basis; acknowledges that CIE has to reduce its cost base and improve its efficiency if it is to remain viable and competitive; agrees that the necessary change has to be achieved through direct negotiations between CIE management and unions with the assistance of the State's industrial relations machinery and that ministerial intervention would inhibit rather than assist these negotiations; considers that industrial action will only damage the interests of CIE and its workforce and accordingly urges CIE management and unions to negotiate necessary change on a basis of partnership and realism in keeping with Partnership 2000 and the Labour Court recommendation of 2 December 1996.
The crisis looming in CIE is apparent to anyone who uses or is responsible for public transport services. A few months ago other Members and myself were invited to meet members of Iarnród Éireann management in Buswells Hotel. At that time the writing was on the wall about this dispute. The proposed cuts were weighing heavily on the minds of members of CIE management and they realised they were heading down a difficult road. It was obvious from the meeting that as a result of cuts requested by previous Governments serious industrial disputes had taken place. This Government promised to turn over a new leaf and to properly resource an efficient, trimmed down and modern public transport system, but it reneged on it. Consequently, we are facing further cutbacks in the public transport system.
The public transport system must make interest repayments on loans and bear the brunt of being one of the least resourced systems in Europe, if not the world. In 1995 CIE's overall costs were £463 million, £329 million of which was paid for by money received in fares. In other words, 71 per cent of the company's costs were paid for by fares, a high percentage in European or world terms. The Government reneged on its responsibility to provide a properly resourced transport system. Is it any wonder, therefore, that the sales of new cars has increased? In 1996 we imported 115,000 new cars which, apart from Government taxes, returned little to the economy.
The Government is guilty of bad economics and bad treatment of those depending on public transport. If it is serious about our economic welfare it must take public transport seriously. I support an efficient public transport system that does not waste money or the time of the people, the company or the Government. Such a system must be met half way by Government support that ensures people do not have to rely on private transport. That makes sense from an economic, environmental and human welfare point of view, but the Government is guilty of not delivering on that basic argument.
Constituents from north Dublin proposed to send more than 4,000 letters about public transport services in their area to the Minister's predecessor, but he refused to accept them on the basis that they were not a matter for the Minister for Transport, Energy and Communications. The Government must change its attitude and become the custodian of the public transport system. It is not sufficient for members of the Government to talk about supporting public transport as they travel around in large chauffeur driven cars. They must use the system whenever practicable. Members of this Government have yet to experience that learning curve.
Will the Minister reconsider his predecessor's  decision and communicate with the commuters in Dublin North who wish to outline the shortcomings in the public transport system, particularly the rail service, in Dublin North? Transport services have not been developed in conjunction with the increase in population. The Minister must realise that public transport should evolve in conjunction with the numbers of people it is designed to serve.
The service provided by the numbers 33, 41 and 42 buses is seriously overburdened and under resourced. CIE's responsibility for those services is being tested because of a lack of resources. The Minister will be aware of the controversy in the past week about large scale rezoning in the Swords area. He knows the population in that area is increasing Every morning buses are full when they come to Swords. That is also bad economics as it forces people to consider taking out a loan to pay for the purchase of private cars.
The Minister referred to cutbacks in CIE. He is disillusioning customers that would otherwise help to pay for running CIE. He must change current policies and realise that increased car sales is not sustainable growth. He must realise that if we do not promote sustainable growth we are only making trouble for the future and public transport can play a role in this regard. The Minister should communicate with the unions in this dispute and provide a modern and efficient transport system properly supported by the democratically elected Government.
Deputy Brennan's call for strategic development in the semi-State sector contrasts oddly with the proposal of his party leader. Last October he decided it was Fianna Fáil policy to dispose of the entire sector to the highest bidder.
Mr. E. Byrne: It is on the public record. The Fianna Fáil Front Bench is in need of an internal communications strategy. The current unrest in CIE and the threat of an all out strike did not arise out of a vacuum. The hands-off approach adopted by successive Fianna Fáil administrations encouraged the development of a management ethos that allowed more for confrontation than for partnership. In addition, the attempt by management in the three sections of CIE to impose change by diktat has generated great mistrust among the workers. This has been compounded by the inexplicable action to remove paid sick leave for Dublin Bus employees injured in the course of their work.
Mr. E. Byrne: The plans by Iarnród Éireann and others were produced by management without  any consultation with the unions. Is it not time for management to seek an input from the unions and redraw them?
An efficient, reliable and cost effective transport system is both an economic and social necessity. However, cost effective does not mean cost reduction. We know it is not possible for the public transport system, which serves the social needs of the population, to be completely self financing. Anybody who believes otherwise is living in could cuckoo land.
Over the past decade, the Exchequer has subsidised CIE by approximately £1 billion. That is a reasonable price to pay for an efficient public transport service. However, CIE is not efficient. The bus service in urban areas is a hit and miss affair for users. It has failed to entice drivers from their cars and the resulting transport gridlock threatens to bring our major cities to a halt.
An improved public transport system is not the only way to resolve this gridlock. The number of private vehicles, mostly occupied by one person travelling to and from work, is multiplying at an alarming rate. Some Government initiatives encourage this traffic chaos. I would welcome a review of the tax incentives currently available for multi-storey car parks in tax incentive areas. We also need to look at company parking spaces. Perhaps treating them as benefit-in-kind would discourage people from bringing their cars into work.
A two pronged approach is required to discourage the use of private cars while encouraging the use of public transport. A number of simple initiatives, which have more to do with common sense than with viability plans or strategic initiatives, could make public transport more attractive. For example, why can drivers not open the middle exit doors on buses? Present arrangements compel passengers to press forward when alighting.
Hitherto, it appeared that strategic planning in CIE focused on changes in work practices, with little reference to the customer. The greater Dublin area has undergone massive population shifts in the past decade. Urban renewal has encouraged more single people to move from the suburbs to the inner city, while pressure on space and rising house prices has forced many families to move into west Dublin, County Kildare and County Meath. Sadly, the transport infrastructure has yet to catch up with new demands, despite recent developments such as the opening of the Lucan quality bus corridor. The necessary demographic data is available to predict future transport needs. I wish this played a larger role in the viability plan.
I am especially concerned with the plan by Iarnród Éireann. Its focus appears to be a reduction in workers' earnings. We all know there is a high level of overtime payments in the company, but this is largely due to low basic pay. Given modern industrial relations in an era of partnership, the way to increase productivity and flexibility at no extra cost is to allow workers  retain their current gross earnings while introducing changes permitting them to work more flexibly. The success of the viability plan or any other strategic initiative will ultimately depend on the relationship between management, workers and consumers.
Present semi-State structures need not remain cast in tablets of stone. There is a need for change. However, economic salvation does not lie in the privatisation agenda pursued by Thatcherites, the Progressive Democrats or even the Deputy McCreevy wing of the Fianna Fáil Party. Socialisation, rather than privatisation offers the best opportunity to develop new partnerships and to harness the collective intelligence of the workforce to the benefit of both companies and consumers. This aim would be best achieved through the development of collective share ownership along the lines of the successful employee share ownership plans which have been piloted in the USA.
Mr. E. Byrne: The basic concept of an employee-management buy out can be adapted to a number of situations and can be structured in such a manner that consumers as well as workers have a formalised role in both the structure and operation of an enterprise.
Consideration should be given to the sale of CIE, or its three constituent companies, to the managers and employees who best know how to run them. This could be financed in various ways. There is no need for a give-away, similar to the sale of B & I, organised when Fianna Fáil was in Government and which was sold for £7 million with debts of £36 million written off. The proposed third banking force and other such institutions could possibly have a vital role in providing the finance, not only for the CIE employee-management buy out but for similar innovative initiatives in the semi-State sector. For example, I understand the Government is giving favourable consideration to a proposal by workers in Telecom Éireann to acquire up to 15 per cent of the company.
This approach represents the best chance to revitalise the semi-State sector without embarking on the kind of wholesale privatisation undertaken in the UK and other countries. I hope acceptance of this concept will become more widespread and more people will consider it as an option.
Mr. Bradford: I listened with interest to the previous two speakers. Given what they said it is clear we need a broad debate on public transport. The political and ideological climate has changed over the past decade. What were the certainties in life are no longer certain. However, we must concede that there will always be an economic and social need for a proper public transport system. The country has benefited significantly from the work of the CIE group over the years.  Nobody can claim that the organisation is perfect but it is far from imperfect. We must try to address the issue of making CIE as strong as possible to face all the challenges in the future. Given the competition which will exist as EU regulations change and private operators have access to the best routes, CIE must have its house fully in order. However, we cannot ignore the fact that there will always be a social sphere to public transport and I support and welcome the Government's commitment to it.
Deputy Brennan's contribution last night reminded me of the contributions of Deputy O'Donoghue in debates on crime and Deputy O'Rourke in relation to unemployment. A person who had been abroad for a year would suspect that CIE's problems only began two years ago. We must be honest and accept that many of the difficulties and problems were brushed aside and not addressed. In the context of the current proposals, politicians, union members and CIE management must face the difficulties and try to overcome them.
The Government's commitment to public transport and CIE is obvious from the subvention of £105 million which is being made available to CIE this year, an increase of over £5 million since 1996. This is being done to ensure that the group remains as strong as possible and that there is a good, solid base for CIE's public service contract. We must accept that the public service element of CIE, which will never pay for itself in economic terms, must be as efficient as possible. It must deliver the best possible service to the maximum number of people. The Government is anxious to ensure that the CIE group puts in place at the earliest possible date whatever steps are necessary to take full advantage of the public subvention which is being made available to it and uses it to maintain and develop the social service which CIE has always provided.
The point has been made to me by individual CIE workers that some of the current proposals under the viability plan involving dramatic cuts in wage levels will be extremely difficult to sell to the workforce. Members of the Oireachtas would not be impressed by a proposal to reduce our salaries by 20 or 30 per cent overnight. We must expect the same response from workers in CIE when proposals are made to significantly reduce their salaries. The viability plan contains difficult choices and decisions. However, we must recognise that the future of the group will be put at great risk if some form of the plan is not implemented.
Deputy Brennan last night called for a hands-on approach. However, he blissfully ignored the fact that he was in charge of the CIE group when he was Minister and that, while his party has had much responsibility for it over the years, a hands-on approach was never taken. The idea behind the development of the semi-State sector was that there would not be day-to-day political or ministerial involvement. CIE management, the board of directors and the unions should be to the fore  in coming together to resolve the group's difficulties and planning for the future.
In the last decade £1 billion of Government money has been paid in subventions to the CIE group. Most of it was made available to ensure that the group's social responsibilities would be met. However, given the extent of the Government's financial and political commitment, we must expect and demand a reasonable response from CIE's management and unions which involves them coming together to debate and resolve their problems. We could talk at length about the options which the group must consider in the next couple of years but the fact that there has not been a debate on the wider aspects of public transport, including the environmental aspects and the socio-economic cost, does not mean the relevant facts and figures are not available to people in CIE.
The Government has an obvious commitment to the future of the CIE group, given the huge level of investment, and I hope the unions and management will respond in a reasonable and serious manner. The last thing we need is strike action because it would send the wrong signals to people who are served by public transport. I hope whatever difficulties arise can be resolved by debate and without recourse to a serious industrial dispute. The CIE group did itself no favours in the various strikes which took place during the 1970s and 1980s. I hope, as a result of the Partnership 2000 agreement and the different economic and social spirit which currently exists that people will agree to settle their differences without recourse to strike action. I support the Government's action of putting money into CIE but giving responsibility to management and the unions to work together to maintain the strength of CIE and to make it stronger in the years ahead.
Mr. S. Kenny: The motion refers to the Government's failure to develop a strategic plan for CIE and the semi-State sector but what is Fianna Fáil's strategic plan? I note from a newspaper report that the Fianna Fáil leader unveiled his radical plan for the semi-State sector at a meeting of influential IBEC members on 10 October 1996 when he announced that Fianna Fáil is set to sell off a multi million pound stake in the country's semi-State companies. He said the companies targeted by a Fianna Fáil policy group include CIE, RTÉ, the ESB, Coillte, Bord Fáilte, Bord Iascaigh Mhara and the remaining State holding in Telecom Éireann. Fianna Fáil is adopting the policies of the Progressive Democrats in calling for the privatisation of the entire semi-State sector. Workers in the sector are being told what faces them if a Fianna Fáil-Progressive Democrats coalition comes into office.
Mr. S. Kenny: I wish to mention an information bulletin dated May 1996 from the Federation of Transport Operators which represents private bus operators who are currently campaigning for the privatisation of the school transport system operated by Bus Éireann. The heading on the bulletin is “FOTO Meets Fianna Fáil Parliamentary Group on School Transport System”. It states that FOTO outlined its proposals at the invitation of Deputy Martin and that the discussion was seen as the first in a series of discussions with the Fianna Fáil parliamentary group on school transport. It continues that FOTO is confident that, with the concentration and focus now clearly on the school transport system, its members will finally reap the deserved benefit. It notes its thanks to Deputy Martin and his colleagues and states that FOTO looks forward to further positive action.
Mr. S. Kenny: I appreciate it is very embarrassing for Deputy Ahern. This is what Fianna Fáil is planning for the workers in Bus Éireann. In contrast, the Labour Party in Government since 1993 has ensured that policies have been put in place which provide levels of capital investment in public transport which would not have been imagined ten years ago. The projected investment programme for public transport between 1994 and 1999 amounts to more than £735 million, representing an unprecedented commitment by the Government to renew and develop our public transport system and rail network.
Mr. S. Kenny: This year the State subvention to CIE was increased to £105 million, over £5.5 million more than last year's provision. Having spent most of my working life with CIE before I was elected to this House, I am well aware of the concerns that exist at all levels among the company's workforce arising from the proposed viability plans. The decision by the CIE board to close down its rail link freight service which generated £5 million per annum in revenue was an act of the utmost folly. Matters were not helped when management made payment of the final increases under the PCW conditional on acceptance by the CIE unions of the viability plans. Nor was the position helped by a letter sent to all employees by the CIE group chief executive which, in the view of the CIE trade union group, was a distortion of the facts. The position is also not helped by the change or die school of successive ministerial scriptwriters.
Investment programmes in Iarnród Éireann,  Bus Átha Cliath and Bus Éireann, entailing cost savings of £30 million, £8 million and £6 million respectively, were announced late last year. Those plans incorporate proposals which would dramatically alter and erode conditions of employment and take home pay. Those proposals have generated understandable opposition. The matter was recently resolved by a Labour Court recommendation which resulted in payment of the increases negotiated under the PCW and committed all concerned to negotiate on the proposals. Those negotiations are ongoing with a view to establishing mechanisms through which the issues may be addressed. I welcome the adoption of Partnership 2000 and the whole partnership approach to resolving disputes.
Mr. S. Ryan: I am very pleased to have the opportunity to contribute to this Private Members' motion on what I thought would be the future of Irish Rail, Dublin Bus and Bus Éireann, particularly its employees, but I was disappointed. Whatever else Deputy Brennan spoke about last evening, he rarely alluded to the future of CIE as a group or addressed the concerns of its workforce. Deputy Brennan knows that he and his party have lost credibility in the semi-State sector. This motion and the Deputy's previous rantings about Telecom Éireann represent a forlorn attempt by Fianna Fáil to boost its reputation among public sector workers. This PR exercise is doomed to failure. Deputy Brennan's chances of succeeding in this task are, unfortunately for him, nought, as is evident each time Fianna Fáil's chosen bedfellows, the Progressive Democrats, contribute to a debate on public services.
Everybody in this House and in CIE knows that change is inevitable. In many other semi-State organisations such as Aer Lingus, Telecom Éireann, ESB and Bord na Móna, it has already taken place. Mostly this change is driven by EU legislation. Regardless of whether we like it, Europe is moving in the direction of full, open and unhindered competition, and the majority in this House are in favour of that. The best our industry — it is our industry — can hope for is a short breathing space before deregulation is introduced. Some people would prefer if that did not happen, but there is no use in the Government, management, workers or Opposition spokespersons putting their heads in the sand, however politically expedient it would be for the latter. Collectively we must avail of this opportunity to bring about the necessary changes, and changes arrived at by agreement will be even more durable.
There is no direct competition in rail traffic and it has not been privatised. It is interesting to note that Deputies Brennan and Cullen suggested, in the Joint Committee on State-sponsored Bodies,  the privatisation of two of Iarnród Éireann's most profitable ventures, Rosslare Harbour and the catering service within the company.
Mr. S. Ryan: The railway is already under pressure to compete with other forms of transport — for instance, our road network, which is greatly improved, is a formidable alternative to rail freight, but that is not in our long-term interest. In terms of the environment, rail is a more viable alternative to roads. The bus industry is in a unique position. Nominally, Bus Átha Cliath and Bus Éireann are free from competition under the 1933 Act. There are, however, numerous private operators, mainly operating inter-city services but also to some extent in Dublin. They operate in a legal quagmire, between regular service provision and private hire. That position needs to be regularised and a level playing pitch provided.
The current source of controversy within CIE relates to the three viability plans for the companies. While it is often perilous for politicians to involve themselves in industrial relations problems, a few points must be made about these plans, particularly the way the workforce and its representatives were informed of them. The figure mentioned in the cost-cutting package is £44 million, a substantial figure which adds to the public perception that CIE and its three constituent companies receive huge amounts of State subvention. However, is that actually the case? Out of the annual £100 million subvention to CIE, more than £55 million is spent by Irish Rail on infrastructural maintenance. In contrast, the roads infrastructure is funded entirely by the Exchequer. DART interest costs amount to more than £10 million per annum. Public transport in Dublin is the least subsidised of any European capital and consequently this city has a huge traffic problem.
A further point that must be addressed is the low basic rate of many groups of employees in the three companies and the need for equity in terms of shareholders' contributions — there has been no equity in the company over the years. The parliamentary Labour Party met the CIE unions on a number of occasions to discuss this issue. We outlined our position clearly to the previous Minister. Bus Éireann must lift the threat to implement its proposed changes to allow meaningful negotiations to continue. The same applies to Iarnród Éireann. In each case change  will be best accommodated within the parameters laid down in the ICTU document, Managing Change. This and future Governments must redouble their efforts to influence European transport policy away from untrammelled competition. That is not just to preserve good jobs but to preserve quality and economic efficiency. Integrated public transport will then become the first choice of commuters and inter-city travellers.
The ultimate benefit would be in quality of life and in the welfare of the physical environment. I heard the board of CIE put an embargo on EU-aided projects pending agreement of the viability plan. If this is so, it is an attempt at blackmail and I call on the Minister to intervene should it prove to be true.
Mr. N. Ahern: I must declare an interest in that I was a CIE worker for 25 years. I would defend those workers anywhere as genuine, dedicated and hardworking. Like anyone else, if given the proper leadership and motivation they will respond. For too long, CIE workers have been bashed. Long before it was fashionable to knock politicians, CIE workers were used to taking abuse. Politicians should understand the damage done to morale when people are constantly and unfairly criticised.
CIE workers and unions know they are in a changing world and are prepared to adapt. Any job in CIE is not the best paid job in town; wages have always been on a par with or just below others. Over the years, the take-home pay has been supplemented by pay for long hours, overtime and weekend work. No board or Government should try to drastically reduce those salary levels in one fell swoop. Standards of living and mortgages have been built up over a long time and huge pay reductions should not be threatened; in some cases reductions of up to £180 a week are mentioned. It is scandalous for any Minister or member of management to suggest that such a pay cut be accepted. How can any Government Deputy defend that?
Deputy Seán Ryan mentioned Fianna Fáil's reputation with the semi-States. Fianna Fáil set them up, encouraged and developed them. The Labour Party has recently tried to paint itself as the friend of semi-State bodies.
Mr. N. Ahern: We put up with rubbish about this in the 1992 election and now the workers are disillusioned with what Labour and Democratic  Left have given them. They gave sermons on the ramp in Aer Lingus as friends of the semi-States. Now Rail Link has been privatised.
Mr. N. Ahern: This Government has attacked and undermined several semi-State bodies. The jewel in the crown, Telecom Éireann, has been partly privatised and last week we saw the comments of the Dutch executives involved: they see that as one stepping stone and in a couple of years the whole company will be gone.
Mr. N. Ahern: The pious talk is for nothing. Previous Fianna Fáil statements can be dragged out but the Labour Party should look at what it is doing. People are not fools. They can see what is happening and do not listen to rhetoric.
Some of the suggestions, such as the wage reduction of £180 a week, is scandalous. Many CIE workers still work a six-day flat week. Most of us got a five-day week between ten and 35 years ago but many CIE workers are still on a six-day week, which is scandalous. They manage to get a week's pay by regularly working overtime. Many grades work overtime that is rostered in, month after month and year after year. It becomes part of their wages and to try to frighten people by threatening to cut back on overtime overnight is scandalous.
Mr. N. Ahern: It has not. The Government has cut the tapes but the investment was negotiated by our party and Minister. The last time Fine Gael and Labour were in power we had the statement from the then Minister, Deputy Jim Mitchell, that CIE should surrender, and there would be no more investment when Fianna Fáil returned, EU money was ploughed into CIE.
Mr. N. Ahern: The work was done by Fianna Fáil. CIE workers understand competition but the competition they are suffering, especially from provincial bus companies, is unfair. Some of these companies get money under the table and tamper with salaries to get State subsidies. It is unfair and unprofessional competition. CIE workers are capable of giving a very good service and will compete fairly with anybody and it is up to Government to ensure fair competition. The Minister should talk to CIE workers and agree on matters so that there is no strike. If they need a temporary pay cut or share in the company as in the Aer Lingus case, it should be negotiated. The company must go forward.
Miss de Valera: I thank my colleague for allowing me to share his time. When the last election campaign began in 1992, worried workers from Telecom Éireann came and asked me what the philosophies of the other parties would be in regard to Telecom. Sadly, their worst fears have been realised. The Telecom strategic alliance brought about by the former Minister for Transport, Energy and Communications, Deputy Lowry, has caused many of the workers and Fianna Fáil grave concern.
The price is scandalous and the deal heavily weighted in favour of KPN and Telia. They now hold all the rights and options although they paid a bargain price for 20 per cent of Telecom. Now there seem to be talks with the Swedish partners about privatising the company. The Minister should not have stood over the KPN-Telia deal as it betrayed the taxpayers and Telecom workers. Fianna Fáil's history and philosophy has been consistently to support semi-State bodies in providing energy for economic growth. As Deputy Séamus Brennan, our spokesman on Transport, Energy and Communications, said last night, the aim of Fianna Fáil is to reinvigorate the State enterprises and create a new renaissance in the sector.
With regard to the crisis in CIE, workers are frustrated and neglected by the Minister. He should take a hands-on approach as the approach of CIE management is unprecedented and turns the clock back on the principles of social partnership, as Deputy Séamus Brennan said last night. The concerns of the CIE workforce have to be recognised and accommodated. If the Minister, with the backing of the Labour Party and Democratic Left, continues to turn a blind eye to what is happening in CIE, the losers will be the CIE workers and the consumers who wish or have no choice but to use public transport.
When cost-cutting in an organisation is mentioned, it is often the most vulnerable who are squeezed. I refer particularly to the railway lines in the west of Ireland. The maintenance and service of these lines needs funding and very little EU funding is available for them. If a line is not maintained, effectively it is closed.
We argued the importance of having a passenger service on the Ennis to Limerick line some  years ago. We did not get a good hearing from the CIE management at the time and it was only after many years of persuasion that CIE put a service on that line. CIE's argument was that there would not be enough passengers and that the service was not needed. It was wrong and when the service was provided it proved to be effective. Public pressure at local level also resulted in the improvement of the Dublin to Sligo line. I would like to see the return of a passenger service on the Limerick to Galway line, on which a freight service operates at present.
In order to obtain value for money CIE cannot just hope that things will happen. It must put in place a proper marketing programme. Those who live in the west need a proper rail service. This would help keep existing jobs in the region and perhaps help to create more. It would also give the commuters in the west the facilities to which they are entitled.
The Minister has refused to meet the unions in the CIE dispute. He is not facing up to any of the problems confronting his Department. The abolition of duty free facilities is going ahead unchallenged. Does the Minister intend to allow my constituents to lose jobs and revenue when duty free shopping is abolished? He should have the political courage to put up a fight and give a long-term reassurance to those working in the duty free area in Shannon.
Mr. Martin: I condemn CIE and the former Minister, Deputy Lowry, for their approach to the workforce in Bus Éireann and Iarnród Éireann. It was dictatorial and draconian in publishing rosters on notice boards throughout the country which would have had a dramatic impact on the salaries of the workers. It was an act calculated to undermine industrial relations in the company and the basis which has underpinned social partnership since 1987.
Mr. Martin: This was what happened under the Government's authority. This act created an atmosphere which was not conducive to reaching agreement on productivity or rationalisation. It was a fundamental mistake. The company's  approach and the Government's directions to the company were wrong.
I concur with Deputy Noel Ahern's comments on the income of CIE workers. My father worked as a bus driver for many years and the only way he could earn a decent salary to feed and educate his family was by working long shifts and driving long journeys. For generations the workers have not had a decent basic income or decent pension rights. I do not mind rationalisation or changing pay structures, but the workers should have a decent basic pay at the outset. We can then deal with removing overtime and unsocial hours allowances.
The Government recently negotiated Partnership 2000, apparently in a spirit of agreement, yet there was a deliberate attempt to move the pay and conditions of CIE workers back to the Dickensian era. Shame on the Labour Party and Democratic Left for being party to that process.
Mr. Molloy: The CIE restructuring plan makes severe demands on the company's workers. Asking individual workers to take wage cuts of 30 to 40 per cent is not just demanding but unrealistic. People have entered into long-term financial commitments on the basis of their historical earnings. If the pay cuts were to be accepted many people would find themselves unable to meet their mortgage repayments, afford the cost of putting children through third level education or keep up with other financial commitments. In some instances the pay cuts demanded are so severe it is as if the company was intent on making an offer the workforce simply could not accept. This is hardly the way to secure acceptance of a restructuring package.
It is not surprising that we seem headed for a nation-wide transport strike that will not only disadvantage the public but damage CIE and the prospects of all those employed in the operating subsidiaries. In the CIE companies overtime and allowances have become an integral part of the overall earnings package. It is clear that should not have been the case. The emphasis should have been on basic pay rates. However, the present situation and the problems with the pay structures were allowed to develop over several decades and it is unrealistic to expect that they can be sorted out in one fell swoop.
The ability to rationalise and restructure is one of the key functions of modern management. Most private sector institutions have been brought through a process of rationalisation and restructuring. Some of them have been through it several times in order to cope with the rapid pace of change in their business. The main banking organisations, for example, have dramatically altered the way in which they do their business. They stay open longer, provide a wider range of services to their customers, have a more flexible workforce and are equipped to cope with domestic and international competition.
Public sector organisations have had to  embrace change. This has happened on a dramatic scale in other countries. For example, Telecom Éireann's new partner, the Swedish company Telia, shed a third of its workforce over a number of years. The ESB has completed a major restructuring of its operations in order to prepare itself for the competitive market in electricity. The company may have paid top dollar, so to speak, in compensation for securing agreement to the restructuring. However, agreement was secured without industrial dispute or interruption to supply.
Another example is Bord na Móna. The former chief executive, Mr. Eddie O'Connor, transformed the fortunes of the company in little more than five years. Staff numbers were halved; productivity was increased; management was reorganised and new markets were established. As a result, a loss of £16 million a year was converted into a profit of £5 million a year. As Minister for Energy from 1989 to 1992, I was in a position to support and encourage Mr. O'Connor and the then chairman, Mr. Brendan Halligan.
Mr. O'Connor's achievements were made without strikes or disruption. In other words, he completely rationalised the company's operations without antagonising the workforce. As a good manager should, Mr. O'Connor explained the realities of the situation. He outlined the areas in which savings were needed, he impressed upon the workforce that change was essential for the company's survival and he consulted with it on the restructuring-proposals. In short, he won the trust and confidence of the workforce in his bid to carry through the most fundamental changes in the history of the company. It is remarkable in hindsight that Mr. O'Connor should have been able to command the confidence of several thousand Bord na Móna workers but was forced to leave the company because he was unable to command the confidence of the former Minister, Deputy Lowry. Mr. O'Connor is a great loss to the semi-State sector. He showed how flair and commercial sense could be brought to bear on the management of a State company and how taxpayers and workers could benefit as a result. Whatever difficulties arose with regard to Mr. O'Connor's remuneration package, they could have been sorted out without the unseemly witch hunt launched against him by the former Minister.
There must surely be a lesson for CIE in the experience of the ESB and Bord na Móna. Both companies showed that comprehensive restructuring and rationalisation can be achieved provided there is adequate consultation between management and the workforce. The process of consultation has to be built on trust. I worry whether that trust between management and staff exists in the CIE group of companies; if not, it will have to be established. There is no doubt that the CIE companies need restructuring. They all face the challenge of increased competition in a deregulated  European market and none of them is adequately equipped to cope with that competitive threat.
Deregulation of the road transport market will mean that Bus Éireann and Dublin Bus will have to face more competition in the years ahead. Both companies will have to fight for customers with private sector operators whose costs are much lower than theirs. For both companies the message is clear, they must rationalise to survive. The position is potentially even more serious for Iarnród Éireann, the CIE subsidiary most heavily dependent on support from the taxpayer. The previous Minister for Transport, Energy and Communications, Deputy Lowry, allowed competing operators access to the CIE rail network, a measure that has gone largely unnoticed because nobody has yet taken advantage of it. There is no need for me to spell out the implications of this for the future viability of Iarnród Éireann.
The most dangerous scenario for the company is one where Northern Ireland Railways is privatised by trade sale to one of the independent train operating companies in Britain. Instead of co-operating with CIE on the Dublin-Belfast route, as at present, NIR could then decide to compete with it. It could become a competitor not just on the Dublin-Belfast route, but on other inter-city routes such as Dublin-Galway, Dublin-Limerick and Dublin-Cork. On the basis of recent developments in Britain the most likely bidder for NIR is Stagecoach and I am sure management and workers at CIE are already familiar with its track record. The company pursues expansion in a very aggressive way, believes in ruthless competition and is prepared to use predatory pricing to force rival operators off the roads and rails. Originally a bus company, Stagecoach is one of the largest train operating companies in the privatised system which obtains in Britain. A company such as this operates on the principle that there is no such thing as an uneconomic route, only an uneconomic operator. It has proven its ability in buses and trains to cut costs to the minimum while still delivering a service that passengers will support.
I understand CIE management is waking up to the possible challenge from Stagecoach and that memorandums are circulating around Heuston Station about the possible impact on Iarnród Éireann. One does not have to be a genius to work out what that impact would be. If Stagecoach were to select two or three high density inter-city routes such as Dublin-Belfast or Dublin-Cork and engage in predatory pricing through a low fare strategy, Iarnród Éireann would suffer badly. The company would see its revenue base crumble quickly as it was forced to cut fares while losing passengers. It would then be left with two stark choices. It could engage in a severe and sudden cost reduction programme involving wholesale redundancies and across the board wage cuts or it could go to the Government and look for a huge increase in the annual subvention. I am not sure it would get a favourable hearing from the  Government of the day unless it could show it was seriously willing to tackle its cost base.
The issue for the CIE companies is whether they rationalise now on their own terms or rationalise later on somebody else's. Management clearly understands the need for rationalisation and restructuring. The unions also understand the need for that process. Why are the two sides unable to come together and sort out the issue as they did in Bord na Móna, the ESB and hundreds of companies in the private sector here? Some of us were Members of this House when Deputy Séan Lemass was urging Irish industries to rationalise in preparation for entry to the EEC. We are in a similar critical situation in regard to our State companies.
Cost cutting on its own will not be enough to solve the problems for CIE. It has developed as a protected monopoly over a half century. Like most monopolies, it did not pay as much attention as it should have to customer service and quality assurance. There is no charter of customers' rights, for instance, in any of the CIE operating companies. There are no performance indicators to tell passengers what percentage of buses or trains ran on time or ran at all. This basic information on the quality of service is displayed at all main stations in the Northern Ireland Railways network.
The CIE group and Iarnród Éireann in particular, has placed too much emphasis on engineering skills and not enough on marketing skills. There has been enormous investment in a main line rail network over the past five years, yet the number of passenger journeys has risen by only 6.5 per cent over the same period. Huge investment has gone into developing the diesel suburban rail service in the greater Dublin area over the past years, yet passenger numbers using these services are lower than five years ago. The population of Dublin is increasing, the number of tourists visiting the city has risen dramatically and traffic congestion is making high quality public transport an attractive option. All this should translate into higher demand for the DART service, but what do we find? The number of people using DART in 1995, the last year for which figures are available, is lower than in 1990. This surely puts a question mark over the ability of Iarnrod Éireann to market its products properly.
The same is true of rail freight. In spite of road improvements, traffic congestion still makes it difficult and costly to get road freight to many of our major ports, particularly Dublin Port. Does that not present an opportunity for the rail freight division of Iarnród Éireann, especially when the company enjoys good rail access to most of our ports? Apparently not. Despite the purchase of an expensive fleet of powerful new Canadian locomotives and a continuing programme of improvements to the rail infrastructure funded largely by EU money, rail freight has gone downhill in the last five years. Since 1990 the total tonnage of goods carried on the Irish railways has fallen by 4 per cent while total cash receipts from  the freight business has fallen by more than 12 per cent.
The situation is little better at Bus Éireann where passenger numbers are lower today than five years ago and this despite a huge investment in new coaches for the Expressway routes. The CIE group needs a change of direction. Iarnrod Éireann and Bus Éireann should surely be stand alone companies. Equally it makes little sense to have a single company in Dublin, Bus Éireann, running the city bus services in Galway, Limerick and Cork. Would it not make more sense to follow the example of other countries and devolve control of local bus services to the regions?
Minister of State at the Department of Transport, Energy and Communications (Mr. Stagg): The Opposition motion and their contributions to this debate represent nothing more than a further display of the kind of cheap attention seeking which is their substitute for serious political analysis and debate. The Minister yesterday set out the real facts of the CIE situation in an objective, clear-sighted and dispassionate fashion. CIE management and unions have a job to do. They must negotiate difficult and unpalatable issues which are bound up with the changes taking place in the public transport sector, not just in Ireland, but throughout Europe.
The management and unions in CIE, with the support and assistance of the State's industrial relations machinery are engaged in this. The negotiation of change cannot be accomplished by anybody else. The litany of opposition calls for ministerial intervention is based on the principle that “CIE's difficulty is Brennan's opportunity” and not on any concern about the future of CIE, its workforce or customers.
The changes in the public transport sector require public transport providers to focus outwards, on their customers, rather than inwards on themselves. CIE is no longer the only player in the public transport market. Private sector competition is a reality, and the private sector presence in the market is certain to intensify in the coming years. The public transport sector is the only major area that has remained relatively untouched by the tide of liberalisation from Brussels which is transforming the energy and telecommunications sectors, and which has already changed the aviation and road haulage sectors so radically.
That situation is already changing. Gradual liberalisation of the public transport sector is clearly on the agenda of the European Commission. Changes in that direction are already taking place in many European countries.
That is why it is so important that the CIE group of companies should be ready to meet competition  on price and quality of service. Change, however, needs to be tackled in a managed and measured fashion, with management and unions working together towards realistic agreed solutions. I wholeheartedly endorse the Minister's call to both management and unions to get down to real talking and to resolve the issues in a realistic and co-operative fashion. The days of constant confrontation and mutual suspicion between management and staff in CIE must be put firmly in the past.
Mr. Stagg: The challenge to both sides is to find a way of hanging together, for if they do not they will certainly hang separately. Models for the pragmatic and inclusive management of change in the commercial State sector already exist. In the ESB, Bord Na Móna and Aer Lingus change has been addressed by negotiation between management and workforces. The detailed approach in each organisation differed in line with the differing needs and circumstances which they faced. Nevertheless, the agenda for change in each of those organisations was identified, agreed on and is being implemented on the basis of partnership. That is the way forward for CIE. The resources of the State's industrial relations institutions and machinery are there to support that process and are doing so. Old-fashioned confrontation and conflict, however tempting they may seem when tempers become frayed in the heat of argument, will not achieve the necessary objectives.
I want to say a few words about an area for which I have specific personal responsibility. That is the issue of replacing the outdated and unworkable Transport Act, 1932, with modern legislation which can deal with the licensing of the bus sector in a sane and reasonable way. This issue has been on the political back burner for some years now. I have been discussing the matter with all the interested parties in the sector over the past 12 months. I am now working towards the development of a new set of proposals, building on all the factors laid before me in the course of my consultations. The proposals put together in the late 1980s and early 1990s have been largely overtaken by events, including massive programmes of public transport investment and some developments in relevant European Union legislation.
I will not go into details as to what the proposals I hope to develop will contain. Many of the elements have still to be refined further before they are ready to be put into the framework of a new Bill. There are, however, some basic principles which I am determined to see as the foundations for a new licensing regime for the bus sector. The primary objective of any new legislation must be the provision of the best possible service to the public transport user. Any new arrangements will be as simple as we can make  them. They will provide a sensible, transparent and fair framework for competition. They will contain proper enforcement provisions——
Mr. Stagg: ——and there will be a commitment to deploying the necessary resources to ensure proper enforcement. Above all, the new arrangements will provide a workable and understandable regulatory framework for the industry, taking account of the needs of the travelling public and the need for flexibility to enable the sector to respond to changing patterns of demand. My proposals, while providing a framework for fair competition, will also seek to avoid the kind of free-for-all and cherry-picking which turned the bus sector in the UK into a highly successful commercial venture for the very few and a chaotic nightmare for many among the travelling public. While it would be unrealistic to give a commitment on the timing of new legislation, it is my intention to complete the review and policy formulation aspects over the coming months. Larger political issues will determine the timing of the Bill's introduction to the Oireachtas.
The future of CIE is largely in its own hands. The Government is pursuing a programme of investment which is bringing about an enormous improvement in the public transport system. Initiatives on public service contracts to replace the CIE subvention arrangements and on new bus licensing legislation are well advanced. The final element of the equation requires radical improvements in the cost base and efficiency of the CIE group itself. These have to be achieved by agreement and through direct negotiations between CIE management and unions. They must be achieved in order to enable the CIE group to meet and beat private sector competition from at home and abroad, to maximise the opportunities presented by EU funds for public transport and to generate funds for investments which will not attract EU financial support, including bus fleet replacement. The window of opportunity presented both by EU funds and by the few remaining years before liberalisation begins to bite hard at CIE's customer base is limited. It must be grasped now or it will be irretrievably lost.
Mr. N. Treacy: I support the motion in the name of our party spokesman, Deputy Séamus Brennan. The time has long passed for this Government and its Ministers in the Department of Transport, Energy and Communications to take a positive initiative to ensure that equity prevails in the CIE group of companies. They have failed completely and dismally in the last few years and there is now turmoil in a vital semi-State company.
I pay tribute to the outgoing chief executive of Iarnród Éireann, Mr. David Waters. I wish him  every success in his retirement, which commences next week, and thank him for his services. I wish his successor, Mr. Joe Meagher, every success in the formidable task ahead of him.
I call on the Government, the Minister for Transport, Energy and Communications, the board of CIE, the management of Iarnród Éireann and everyone associated with the CIE group to ensure the deletion of that section of the cost base review pertaining to the western freight corridor from Claremorris, County Mayo to Limerick city. I further call on them to ensure investment is made in this vital rail line so that it can take the maximum amount of freight and provide adequate rail car services as required between the relevant towns in counties Galway, Mayo and Clare and the cities of Galway and Limerick.
We in the west are not prepared to be treated as second class citizens. Over the years there has been massive investment in the capital city in all sectors of activity and all sectors of State. We need a modest, reasonable investment between Limerick and Sligo to bring that railway line up to the proper standard. We are entitled to this as citizens. It is vital that it be done.
There are major opportunities for CIE. It is the dominant player in the transport market and had a monopoly for many years but failed to capitalise on it. There are major potential markets in the third level institutions and Government offices in Galway, Castlebar, Sligo, Limerick and Athlone. There is constant customer demand for a proper service and a major opportunity for an initiative on the rail car system between Athlone and Galway and from Limerick through Galway to Castlebar, Claremorris, Ballina and Sligo. There are great tourism opportunities in the summer season and at Easter and Christmas. The freight service to the ports of Galway, Ballina and Limerick could be developed.
When the Louisiana Pacific company intended to locate in Ireland, a major plan was put forward, not by CIE but by the Claremorris chamber of commerce. The company subsequently located in Waterford but the proposals put to CIE and Iarnród Éireann at that time ensured that they could capitalise on this investment in Ireland and a major freight opportunity has resulted. Many similar opportunities are available to the company if it is prepared to research and market them. Massive investment is required in Gort and Tuam railway stations to ensure these towns get the same type of opportunity as other parts of the country.
In 1851 a railway station was opened in Ballinasloe, the county town of Galway. It is ironic that Fine Gael and Labour, aided and abetted by Democratic Left, are currently in Government because in 1986, when they were in Government on a previous occasion, a decision was taken to close down the freight depot in Ballinasloe. There were 20 people employed there before the  decision but the operation was moved to Athlone and only five people were left in the station.
When we were in Government in the last few years, we put massive European funding, coupled with Irish Exchequer support, into the rail system. Some £20 million was invested in the national primary line between Dublin and Galway.
Mr. N. Treacy: The Government now proposes to automate the railway station in Ballinasloe, one of our biggest provincial towns, and make the five employees, including the station master, redundant. Where is the human face of the company or the hands-on commitment of the Minister into leading a policy plan which would ensure this would not prevail? I want a de facto commitment that Iarnród Éireann will not proceed with closing down the Limerick-Claremorris line, that the investment will be made, that the people of Ballinasloe will be allowed to retain their jobs and that a proper marketing initiative will proceed to maximise the opportunities that are so obvious to Iarnród Éireann and its sister companies. I hope common sense will prevail, that human respect and dignity will be accorded to the workers and that proper negotiations will be put in train to ensure that this company makes a massive contribution, into the next millennium, to the national transport service in an equitable fashion right across the island.
Mr. S. Brennan: I tabled this resolution for two reasons, first because the workers in CIE are being disgracefully treated by the Government and the management of CIE and, second, because the Government's policies right across the board in semi-State companies are in total disarray. The policies which were led by the former Minister, Deputy Lowry, are now being carried on by the new Minister, Deputy Dukes.
The workers in CIE have been ignored by the company, the Minister for Transport, Energy and Communications, Deputy Dukes and, I presume, by the Minister of State, Deputy Stagg. The company is heading for a standstill. We have had a number of stoppages, and will have more. What can one expect when, without consultation, one tells people who drive trains for a living that their income is to be cut by £180 a week. That is a savage way to treat workers in any company, and I am amazed that parties who call themselves left-wing would stand idly by in the Government and allow a board of directors or management to behave like that.
There are proposals for cuts of the order of 100 to 250 in the engineering divisions. What about safety in that area? The unions and the people in CIE have, for years on end, shown that they will manage change. They have made sacrifices  before. There were 11,000 people in Iarnród Éireann some years ago. That is down now to about 5,000. The unions played their part before, and they will play their part again in managing change. They have always shown themselves able to do that. This deliberately confrontational style, started by the former Minister, Deputy Lowry, continued by the Minister, Deputy Dukes and the Minister of State, Deputy Stagg, which gives a nod and a wink to the management to behave in this way is not acceptable and cuts right across the principle of social partnership. Just before Christmas the workers in CIE were told that their PCW entitlement would not be paid unless they gave in to threats which were made to them. They quite rightly said they would not negotiate in the face of such threats. The PCW was negotiated and it should have been paid, but we have heard nothing from the left-wing members of this Government.
Mr. S. Brennan: It is a scandal to see particularly the left-wing parties of this Government standing over this treatment of workers in CIE, the turning of it into a yellow-pack operation. I ask the Minister, Deputy Dukes, again tonight to come off the perch that was put there for him by the former Minister, Deputy Lowry, and meet and talk to the workers, to give social partnership a real meaning by meeting the people who run the company rather than handing them and backing up diktats from a management that should be more sensitive and that should know how to handle situations like this.
I asked for a hands-on approach by the Minister although last night he told me that a hands-off approach was better. We did not take a hands-off approach to the problems in CIE in 1994. We did not take a hands-off approach to Aer Lingus and TEAM. We got directly involved and sorted out the problems. From 1987 to 1994 Fianna Fáil negotiated EU funds of over £600 million for investment in public transport.
I had hoped that this new Minister would take a different approach. I had hoped he would know better than to take this gun-slinging, gung-ho, dictatorial approach to running State companies, and that he would give some flesh and bones to the idea of social partnership. However, I was disappointed. He simply came into office and when I asked him in the Dáil some weeks ago if he would change any of the policies of the former Minister, he told me that he did not propose to unpick the decisions of his predecessor. Deputy Stagg's party and the Democratic Left, which is  not represented here this evening, should not let him away with that.
Also on the question of State companies it was reported in the Sunday Business Post last Sunday that a flagship project in the midlands, the peat stations, was in jeopardy. On Monday the Minister said that there was no problem, that the tender was going out next week. On Wednesday the EU stated that this was subject to review, and disclosed today that the Irish Government was told it was not allowed to mention in its invitations to tender that EU funds were available because the project had not been finally approved. This happened before in regard to Luas when we were not told that the EU had a sanction on it. Who is right? Why is the Minister saying that it is on track, that tenders will go out next week while the EU is stating that it told the Irish Government some time ago it could not do that because the mid-term review was in place and was indicating that unless these funds were drawn down quickly this project would not go ahead.
This is typical of what is going on under Deputy Dukes and the previous Minister — private consultants' reports, secret sell-offs of State companies, secret deals behind closed doors, not telling us the full story. We have it again here in regard to this project. Why did the former Minister, Deputy Lowry, refuse to explain why he cancelled the first competition in regard to Bord na Móna? Why did he refuse to tell us why the operational programme had not been drawn down? I would like an explanation of those matters as soon as possible from the Government side of the House.
The Minister has been in office for over two months. There are 11 Bills in his Department, only one of which is coming up now. The Minister mentioned that this evening. The Minister of State, Deputy Stagg, said that in regard to the new Competition Bill, any new arrangements will be as simple as the Government can make them and will provide a sensible and transparent framework for competition.
Mr. S. Brennan: I am glad the Minister of State announced this evening that the new bus Bill coming before the House will be a framework for competition. I thank him for making the  announcement. We have got a decision from the Department of Transport, Energy and Communications at last.
Mr. S. Brennan: In regard to Telecom Éireann, the Minister of State said in the House that we were to get £500 million for Telecom Éireann. Let me refer the Minister of State to the Irish Independent of two days ago where it is reported that the company that now owns 20 per cent of Telecom Éireann has stated that that figure is “largely a political figure”. In other words, it is not a real figure. It is only a “guesstimate”.
Mr. S. Brennan: While we are on the subject of dead horses, let me refer the Minister of State to last Sunday's Sunday Business Post. The Minister of State and the Minister, Deputy Dukes, told this House that there was no question of privatising Telecom Éireann, that the State would hold on to a majority share, but the people who bought Telecom Éireann are now in the headlines saying they want to privatise Telecom Éireann within three years.
Mr. S. Brennan: ——the introduction of private buses, the turning of CIE into a disgrace. Right across the board this left-wing Government is a disgrace to semi-State companies. It should be ashamed of itself and walk out of this Government before the semi-State companies collapse.
Bradford, Paul. Connor, John.
De Rossa, Proinsias.
Gallagher, Pat (Laoighis-Offaly).
Browne, John (Carlow-Kilkenny).
Connaughton, Paul. Lynch, Kathleen.
Noonan, Michael (Limerick East).
|Ó Cuív, Éamon.
Browne, John (Wexford).
de Valera, Síle.
Amendment declared carried.
Motion, as amended, declared carried.
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