Who runs Public Transport?

[ACustomer]

Who runs Public Transport?

In principle, Government makes the big strategic decisions on Finance, Structures, etc., and agencies such as the NTA and the DOT implement them. Service providers such as Irish rail therefore operate within a political and legislative framework.

The recent rail strike and the news that further strikes have been averted (at least pro tem) raise interesting questions. It appears that the unions were not just concerned about their members pay and conditions, but were striking in support of increased taxpayer subvention to Irish Rail. One presumes that they were not amused then the NTA withdrew funding because of the recent 2-day strike.

So effectively they were not so much concerned about levels of service to the public, but about levels of subsidy to their own members. In the good old days they could have gone on strike for weeks and the Irish Rail subvention from the taxpayer would have remained intact.

Whatever about the rights and wrongs of the specific industrial relations issue (pay cuts), the unions appear to want to run transport policy. No way to run a railroad.

I am provoked into this outburst by the complete silence from a rail users' site on a central issue for all rail users.

[James Howard]

There has been an odd silence here on the rail strike but I think most of the discussion that went on here has moved over to boards.ie. I find myself posting here very rarely these days.

It is hard to judge the agreement on the resolution of the strike given that there is so little information about it in the public domain. As far as I can see, the government has taken a tack that it cannot afford to give in on the pay cuts as this would be the thin edge of the wedge in terms of public sector pay.

I happen to agree with the unions that the subvention cuts have gone far enough by now. While Irish Rail has its problems, the magnitude of the cuts in operational costs over the last 5 years are amazing. They cut costs by 25 million year alone. The problem is that the government has been undermining Irish Rail every year by cutting back further on the subvention. Similarly the increase in passenger fares - particular for long-distance commuters who can't go elsewhere -has been amazing and can go no further. My ticket has gone up by over a thousand euro in the last four years.

I think you could be right in suggesting that the pay cut issue has been a proxy and the real reason for the strike is to get a policy commitment that there will be no further cuts in government funding of the railway. If this is the case, as a passenger whose employment depends on a comfortable and efficient rail service, the union's aims happen to align with mine. I can't see anybody else achieving this goal, so in this case, perhaps it is right that the union are influencing transport policy.

We won't really know what's going on until the detailed terms of the settlement become public knowledge.

[ACustomer]

James Howard: thanks for an interesting and thoughtful reply.

However I do not take such a benign view of the unions. In economic terms, where you have a state-aided monopoly, rent-seeking is always a potential problem. So more money for Irish rail may mean more money for union members and no improvement in service. I'm not saying that this is necessarily the case with the present dispute, but one has to be aware of the general problem.

You can certainly see why a rigorous NTA regime that cuts payments to non-performing entities is necessary.

And management which lacks the drive to exploit business opportunities is also a rent-seeking phenomenon of sorts.

I'm relieved that I have not been denounced (yet!) as some sort of Neoliberal Thatcherite fiend.

[Mark Gleeson]

We had to keep quiet about some of the things going on last week, to ensure the unions got to the LRC. Its no coincidence that the strike notice posters vanished several days before the unions showed up at the LRC. Posters were removed by contractors.

Unions got basically nothing and rightly so. The pay cut is still there, LRC was very clear that there was no way around it. They got another talking shop which will lead to nowhere.

It was flagged several months ago that no further subsidy cut was planned, we knew that back when Leo was minister, so again nothing gained here.

The fact Irish Rail cut its costs by 75 million in 4 years shows how incredibly inefficient a company it was and deserved a good kicking. Fare increases in recent years are not dissimilar to the years before really.

If anything the unions view point is trying to bring us back to the old CIE, of unions controlling the company, the old joke of CIE existing for its staff and not the passenger. IE management is trying to some degree to run on a quasi commercial basis as per British Rail in the 1980's.

Incidentally my refund arrived this morning

[ACustomer]

This morning I read that SIPTU has not issued any recommendation for the forthcoming ballot of its members.

What are we to read into this: cunning low-key approach to solving the problem? or total cowardice and lack of leadership?

Has reality dawned for some of the union leadership? Their appearances on TV don't inspire confidence.

[James Howard]

I wouldn't go so far as to say my view is benign. It is just that in this case, it is possible that their interests align with mine as a passenger. I would qualify my statements by saying that I have no special information as to what is going on and while there are still ballots outstanding it is unwise to speculate too loudly.

It seems to me that there was a degree of kite-flying going on over the last few weeks about the possibility of further subvention cuts and a firm commitment to maintain the current levels would give everybody a face-saving way out. The government cannot afford to let public (or semi-state) sector pay restraint start slipping yet.

In any case, there is a lot more going on here than is publicly visible and there is a bigger picture outside of Irish Rail and indeed CIE.

A point on the savings at Irish Rail - a huge amount of this has come from signalling and level-crossing automation and the resulting reduction in staff numbers. This points to things being inefficient in the past but the savings achieved would not have been possible without the only bit of sensible boom-time investment in rail. Further efficiencies may be possible as it appears (again to an interested outsider) that a lot of people were shoved into unnecessary management jobs as there wasn't enough money to pay for redundancies or early retirements.

[berneyarms]

We had to keep quiet about some of the things going on last week, to ensure the unions got to the LRC. Its no coincidence that the strike notice posters vanished several days before the unions showed up at the LRC. Posters were removed by contractors.

Unions got basically nothing and rightly so. The pay cut is still there, LRC was very clear that there was no way around it. They got another talking shop which will lead to nowhere.

It was flagged several months ago that no further subsidy cut was planned, we knew that back when Leo was minister, so again nothing gained here.

The fact Irish Rail cut its costs by 75 million in 4 years shows how incredibly inefficient a company it was and deserved a good kicking. Fare increases in recent years are not dissimilar to the years before really.

If anything the unions view point is trying to bring us back to the old CIE, of unions controlling the company, the old joke of CIE existing for its staff and not the passenger. IE management is trying to some degree to run on a quasi commercial basis as per British Rail in the 1980's.

Incidentally my refund arrived this morning

A lot of this is about optics - the unions (and the workers) wanted to make an issue of the falling state subsidies and to get some form of guarantee that they would not drop again. You and I as interested parties would be aware that a further drop in subsidy was not planned, the NTA said as much last year, but to the man in the street and the lower level worker there is a perceived need to get this in black and white.

Personally I don't have an issue with subsidies failing when passenger numbers are also falling, but when passenger numbers start flattening and then rising again it becomes very hard to justify.

As to fare increases, I think that the recent ones have to be put into the context of everyone's disposable income shrinking, and very low inflation. When looked at from that perspective, the fare increases have been pretty severe. To a degree there has been an element of the government shifting more of the cost of running public transport onto the users rather than the state bearing it.

[comcor]

I'd actually split the subsidy between a capital subsidy to cover track and facilities maintenance, vehicles etc. and an operational subsidy that would be paid per passenger km.

Yes, it would increase risk for the government, but it would create greater incentives to put the passenger first and hopefully increase numbers.

[ACustomer]

comcor: something along the line you suggest may be done already. Irish Rail is now split (because of EU directives) into an infrastructure division (or company?) and a train operating company. I presume the government grant should be divided between them by the NTA. Otherwise what's the point?

[berneyarms]

comcor: something along the line you suggest may be done already. Irish Rail is now split (because of EU directives) into an infrastructure division (or company?) and a train operating company. I presume the government grant should be divided between them by the NTA. Otherwise what's the point?

This split of the company into two has caused new some management posts to be created, which is one of the complaints from the unionised workforce, but unfortunately for them this split had to happen under EU Law.

The PSO subsidy is split between the Railway Undertaking and the Railway Infrastructure Manager, which also receives capital funding.

[Thomas J Stamp]

at the end of the day the unions chose action that would result in pressure on the government. they cant put pressure on the IR management because you dont know who they are, but you know who the ministers are.

here is a quote from then Minister Varadkar 2nd april 2014

Our current policy is to make Irish Rail more cost effective, maintain services at current levels and perhaps make a few improvements if we can.

You’re all aware that there have been protracted negotiations on cost-reduction measures in the company which are now referred to the Labour Court for hearing later this week. I am genuinely worried that the employees, and maybe even the company, do not appreciate what is at stake here. The purpose of our public transport system is not to move buses and trains around the country. It is to get people from A to B, whether by bus, train or taxi. If our current rail services are to survive, they must be competitive with alternative modes. That is clearly a big challenge for inter-urban rail at present.

If the current policy fails because of industrial unrest or because of continuing decline in passenger numbers, we will have to accept that some or indeed many of our rail services are no longer sustainable. As a consequence, we will have to transfer funding away from them and to alternative modes that offer better value to the taxpayer and the farepayer. That will sadden the romantic in me – but the realist in me will know that we may be left with no

For him it was a fairly clear proposition - he would move the subsidy to buses or roads if they worked out cheaper. He is ignoring the fact that the loss of numbers ect would be caused by cutting the subvention and creating uncertainty in the company in the first place

Earlier in the speech, talking about bus transport he said this

Relying only on fare increases is not sustainable and there is no capacity for increased Exchequer subsidies.

same applies to rail, but for inter city rail where the price is high, the tipping point is a lot lower. Irish Rail management know that at some point a fare increase will result in loss of revenue because people will bail out.

They also know that they are stuck with trains which have no hope of competing with car fuel efficacy innovation in the coming decades and unless we hit another pot of economic gold, they are stuck with the 22k fleet in its current form for a long time to come. Some of their costs will be therefore fixed or will rise faster then competitors. At the same time there is - or was - a shark like government policy to punish any lagging behind by transferring the subsidy thus creating more lag.

The unions, for their part, look after the members, fair enough. It is the minister who is supposed to look after the public and everyone else. A hazy idea that people will just lump switching to busses or their cars is not really much of a plan, but it was Leo's plan.

We talk about optics. Optics is a nice code word for dressing things up so that they are easier to accept, they are a way of saying one thing and doing another. In this case the unions knew there was no way they could get what they wanted, but they had to go through with action anyway, the gov knew that the LRC would come in, so they said nothing and now we are where we all knew we would end up.

The thing is, none of this, along with the cutbacks and the fare raises we have got in recent years, is good for the optics either. We are fast approaching a situation where only those who must get the train take it, as opposed to those who want to take the train.

Thats a bad bad place to be in.