CIÉ faces 'serious deficit' of €100m next year

CIÉ FACES "a very serious deficit" in excess of €100 million next year, Minister for Transport Noel Dempsey confirmed yesterday.

Mr Dempsey said CIÉ, which has seen a severe drop in passenger numbers in recent months would incur the deficit "unless action is taken now". He revealed a review of bus usage by Dublin Bus and Bus Éireann had been completed and was expected this week.

He also said he would be speaking "individually" to each of the three CIÉ companies about their financial arrangements over coming weeks.

The difficulty faced by the companies was that increasing fares may reduce further the numbers of passengers, he said. In any case proposed fare increases would amount to only a portion of the proposed deficit and the group was facing some "very difficult choices", Mr Dempsey said.

The review to which Mr Dempsey referred is in fact the third review commissioned by as many ministers in recent years. Former minister for transport the late Séamus Brennan initiated a review of bus services in the light of possible challenges to State aid going to support State companies which operate in an open market. His successor Martin Cullen then initiated a review of routes which was followed by Mr Dempsey's review of bus usage.

In the balance is the question of whether the Government should - particularly in the case of Dublin Bus - subsidise additional buses to increase the availability of public transport; or allow the private sector to provide the buses and enter into significant competition with the State bus companies.

A statement by CIÉ said: "The CIÉ Group - Iarnród Éireann, Dublin Bus and Bus Éireann - are, like all companies in the economy, facing a more difficult financial situation in 2009."