CIE group needs to make annual profits of £50 million-£60 million (€63 million-€76 million) over the next five years to meet its future investment requirements, its chairman has said.

Mr Brian Joyce believes the company's record £11.2 million profit for 1998 - up from £5.2 million in 1997 - is still not sufficient. "I could not regard those figures as satisfactory," he said. "To feed the company with enough cash to bring about the kind of renaissance in public transport that is required would require a multiple of current profits - if we were to finance it ourselves."

He welcomed the Government's announcement on Wednesday night that it had earmarked £2.08 billion for transport under the National Plan. "I am delighted the Minister [Mrs O'Rourke] and the Cabinet have recognised that there has been a deficit in transport investment for many years," he said. "I am looking forward to a much better transport service over the next five years, as a consequence."

Mr Joyce, who has been CIE chairman for three years, says he has spent his tenure trying to position the company so that it can make its own decisions on its future where possible.

He adds that the company has been working to finance its own capital expenditure "to the maximum possible". However, he says it "will not be able to finance all its requirements" because of under-investment in the group over the years."

Mr Joyce says it would be preferable if the company did not have to seek an 11 per cent fares increase, but he maintains it has been forced to do so because of under-investment. It would be preferable, he contends, to increase fares every year in line with the Consumer Price Index (CPI).

"Over the last three years we have held down costs within the budgets in a significant way, which gives rise to the kind of improvements in profitability we've had," he points out.

Mr Joyce argues that the Government is in a better position to put money into CIE, "than it has been in the past 16 or 17 years". The kind of future investment might include items such as a rail link to Dublin Airport, extending the line to Navan, putting on extra trains, buses and DART services.

Mr Joyce concedes that the sums involved in many projects are "mindboggling," and that "£100 million wouldn't go very far".

Overall, including the proposed Dublin light rail service, LUAS - which the CIE group has been asked to manage, but not pay for - the final figures involved could approach £2.5 billion over five years.

Last year the company directed £68 million into track, trains, new buses and station investment, its biggest investment to date. It is part of a £650 million-plus programme to bring public transport up to "European norms" and "bring about a major switch by motorists to public transport."

Rail continues to be a source of major expenditure. Various consultants' reports have said the rail lines need upgrading from a safety viewpoint. Earlier this year CIE proposed a £654 million rail investment plan, covering renewal, upgrading and safety. The safety element amounts to £430 million and was approved by the Government in March.

Mr Joyce said discussions on funding this element are ongoing with the Department of Public Enterprise. CIE wants the Exchequer to fund £350 million of this, through an annual £70 million contribution over five years.

Mr Joyce said the Republic just does not have the population spread necessary to make all rail lines profitable, but CIE is obliged to provide the service. He conceded that CIE group services, be they bus or rail, are not everything customers expect, and that there have been complaints about the attitudes and approach of certain personnel. The company, he says, is working very hard to change this.

He also says that the company has to work hard, to convince the public that CIE does provide a good service, to encourage them to use public transport and to leave their cars at home.

At least three years ago the company mooted the idea of being paid an agreed figure for providing certain social services - on certain rail and bus routes - in return for meeting agreed standards. If it failed to achieve this standard, it would be fined.

Mr Joyce says all those involved have been working on these contracts, but it had taken time, because it was a relatively new concept and perhaps people needed time to get used to the idea. He describes the contracts as a cornerstone of how CIE would proceed. It would mean that the subvention was open and transparent and would allow the company to progress as a commercial type venture. The public would then be able to appreciate the group's overall performance.

Mr Joyce admits that CIE will have to dramatically improve its service levels over the next three to four years. He maintains that to do this, staff "must be given the tackle" - the buses and trains and other resources necessary. Last year CIE carried 307.6 million passengers, a rise of five million on 1997. He describes this as a "modest enough increase" but says "we believe that this can be significantly improved if we put the capital into the sector".

CIE is currently seeking an 11 per cent rise in fares, compared to the 10 per cent sought last year. There has been no general rise in fares since the early 1990s, yet Mr Joyce pointed out, the company has still had to meet the annual national wage agreements. He says he is hopeful that the company will be granted the increase which must be approved by the Minister for Public Enterprise. "All of that cash is already earmarked for projects, " he says.

This includes improving the Dublin Bus and Bus Eireann services and the railways. "How can I put it? I'm relying very heavily on the Minister to deliver."

Mr Joyce believes the policy of running "for many, many years without a price increase, and then to have to go for a big one" was the wrong one. He says it is "a lot more appropriate to adjust one's prices in line with the CPI".

CIE has been in talks with unions for at least three years on cost-saving plans for its three subsidiaries. Mr Joyce says the plans had "lurched from one set of talks to another".

However, it is understood that some talks are quite advanced and that the Dublin Bus negotiations have been completed.

Mr Joyce is disappointed the process has taken so long. "I feel frustrated, I cannot personally credit that something should take three years to conclude. Life is very short, after all."

"I am not holding my breath about them at the moment," he adds.

It was originally envisaged that the plans would save £42 million in total but Mr Joyce says it is unlikely that final savings will be this high. However, he feels that some of the changes in work practices and productivity agreements may help improve the company's efficiency and levels of service "from a long-term viewpoint".

Mr Joyce also declined to comment on a recent dispute with train drivers which disrupted weekend services. Asked what he would like to see by the end of his term of office - he has another 18 months to run - he replies: "I would like to see visible signs of a renaissance, particularly in rail and commuter transport, so that people would know that improvements have taken place, are going to take place and when they will take place.

"The announcement by the Government that transport will get £2.08 billion means we will be able to secure the capital on a long-term basis so that we don't have to engage in stop/go policies over what we spend and when we spend it.

"We cannot make up the script as we go along. We need to have a long-term commitment to a particular course of action."