Train operator says it will run out of money by middle of next year without cost cuts

Iarnród Éireann has said it will run out of money by the middle of next year unless a controversial cost saving programme is introduced.

Management at the State-owned train operator yesterday unilaterally introduced temporary pay cuts for staff ranging from 1 per cent to 6 per cent. The cuts will remain in force for 28 months.

The company yesterday said it regretted the decision by the National Bus Rail Union (NBRU) and Siptu to take industrial action.

It said the strike action "disrupts services to our customers, worsens the company's financial situation, and puts employment in the company at risk". The Labour Court had described the measures being implemented as "unavoidable if the future of the company and the employment that it maintains is to be protected". It said the trade unions and their independent advisers had been given full access to its financial data and claimed they accepted that the company faced insolvency without urgent action to correct its finances.

“This will involve contributions from many areas including further non-payroll savings, continued revenue growth and ensuring that we are sustainably funded for the services we provide. However, as payroll represents over 60 per cent of our costs, we cannot correct our finances without contribution from this area also. We have worked to minimise the impact, both in percentage and timescale, in order to protect the company and protect employment.

“After 20 months of negotiations, as our finances have worsened, we now have no option but to implement these measures. The industrial action will hurt us all and hurt our customers, and create a wider financial gap which will then have to be addressed.

“The measures have already been introduced for the senior management team, who have reduced their pay by 6.1 per cent, and board members have implemented a reduction in directors fees.”