Cullen rejects special subsidy for rail freight

Minister for Transport Martin Cullen has ruled out a special subsidy to keep aspects of Iarnród Éireann's freight services in operation, describing them as "notoriously uneconomic".

Mr Cullen also refused to accept that the Dublin Port Tunnel was currently €250 million over-budget, pledging: "I am not going to be ripped off on behalf of the taxpayer on this issue."

However, during sometimes heated exchanges at yesterday's Oireachtas Committee on Transport, Fine Gael spokeswoman Olivia Mitchell walked out having accused Mr Cullen of being "100 per cent wrong" on the cost of the tunnel, and of not answering detailed questions on a range of issues.

Ms Mitchell also accused the Minister of "having nothing new" in transport planning while keeping the rail company waiting for "first a five-year plan, now a 10-year plan".

She was supported by Labour transport spokeswoman Róisín Shortall, who asked Mr Cullen if he had considered a subsidy for rail freight traffic given the environmental and other "external advantages".

However Mr Cullen said it was not his remit to ask Iarnród Éireann to operate efficiently and then instruct it to subsidise the loss-making "individual" freight carriage service.

Iarnród Éireann is to end its individual freight carriage service from July 29th, concentrating on whole trains of container traffic. Some 50 staff are expected to be made redundant.

Mr Cullen said he had initially hoped the freight service would expand, but figures had shown it was "enormously more expensive" for customers to get a freight carriage from their business to the rail yards and onwards again at the other end of the rail journey.

"In a small country it is much cheaper for them to back a lorry into the yard and take the container all the way by road."

He revealed that a shipping company had asked Iarnród Éireann to put on a container freight service from Ballina, Co Mayo, to Waterford Port, but had been unable to sell space on to its customers because the additional cost "just makes it notoriously uneconomic".

On the question of a subsidy or a tax break for freight haulage, Mr Cullen asked if it was correct for Government policy to subsidise "moving freight around for business that makes big profits".

Mr Cullen earlier clashed with Ms Mitchell when she asked if the Dublin Port Tunnel would "only take the smaller lorries and charge them, leaving the big lorries to continue through the city".

In a heated exchange Ms Mitchell insisted the contract price of the tunnel had been €550 million and would rise considerably above €715 million to about "a quarter of a billion euro over-budget".

However Mr Cullen insisted his information was that the initial price was "€715 million on contract", and the final price would be "somewhere" over that.

Accepting that negotiations were still ongoing with the contractor, Mr Cullen said: "Yes, there are serious issues with the operator and the contractor, but I am not going to be ripped off on behalf of the taxpayer on this issue."