State funding for bulk of public transport could run out next month

State funding for running the bulk of Ireland’s public transport services could run out as early as next month, the Government has been warned.

It is understood that the board of the CIÉ group of transport companies advised Minister for Transport Shane Ross in a letter last week that the companies were now facing a very serious financial position due to plummeting passenger numbers caused by the coronavirus pandemic.

Bus Éireann said that as a result of Covid-19, passenger demand across the public transport network has reduced by up to 90 per cent.

Many routes operated by Bus Éireann as well as Dublin Bus and train services run by Irish Rail receive money from the State known as public service obligation funding. This is on the basis that they could not be operated on a commercial basis, and last year the State provided €287 million in such funding.

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It is understood that to assist with cash flow in the three State companies, payments have been frontloaded this year. However, senior sources believe this funding could run out by the end of June.

When asked for comment, Mr Ross said: “The Government is determined that there will be no interruption to subvented public transport operations as a result of Covid-19. We will continue to take whatever measures are necessary to support these essential transport services.”

Sources have said the financial situation for Irish Rail, Bus Éireann and Dublin Bus is now “dire”, and a significant injection of State funding could be required in the coming weeks.

It is understood that public transport operators have availed of the Government’s wage subsidy scheme, and sources expect this to reduce any potential rescue bill.

Guidelines

Further concerns have been raised by public transport providers about the knock-on consequences of social distancing when restrictions are lifted as more buses and trains may be needed in order to comply with guidelines.

The financial position at Bus Éireann’s Expressway service is considered to be particularly worrying within the CIÉ group. Expressway is considered to be a commercial operation and receives no State funding.

The company is understood to have commissioned external management consultants to carry out a review of Expressway, including an examination of routes and job numbers.

Bus Éireann did not comment on reports that Expressway is currently losing some €750,000 per week.