Iarnród Éireann funding crisis puts lines at risk, report warns

[platypusparcel]

http://www.irishtimes.com/business/t...arns-1.2840355

A number of rail lines may be forced to close as Iarnród Éireann is threatened with insolvency, a confidential report has warned.

The draft report given to Minister for Transport Shane Ross shows the country’s rail infrastructure has deteriorated to such a degree due to funding shortages that there are now increased safety risks.

It states the rail network needs more than €600 million investment over the next five years.

The report, seen by The Irish Times, says in the absence of any additional Government funding, large chunks of the rail network will have to close to eliminate the funding gap, leaving only the Dart, Dublin and Cork commuter routes and inter-city services from Dublin to Cork, Belfast and Limerick.

The review was compiled by the National Transport Authority and Iarnród Éireann to examine possible solutions for the financial sustainability of the State-owned rail operator.

It says that even with some additional Government funding, the routes from Limerick- Ballybrophy and Limerick Junction- Waterford could close.

It also suggests that part of the Limerick-Galway route from Ennis to Athenry, which only came back into service in 2010 at a cost of €100 million, and the Wexford line south of Gorey could be shut, leaving Wexford town and Rosslare without a rail service.

The draft review says that while numbers using the railways have started to rise again after the economic crash, Iarnród Éireann will still lose about €11 million this year.

It says the company incurred accumulated losses of €150 million between 2007 and 2015 despite delivering €76 million in savings in the same period, mainly due to reduced State funding and falling numbers.
“The company cannot incur further losses as it will become insolvent,” it says. The review says the balance sheet cannot sustain any unexpected financial shocks. It says that to address solvency issues and underfunding in previous years, the company would need an additional €144.6 million in 2017, €158.4 million in 2018 and €154.8 million in 2019. This additional funding requirement would fall to €93.4 million in 2020 and €90.6 million in 2021.

The review says that because of the reduced State funding over recent years, “large and varied parts of the railway’s infrastructure are in need of urgent maintenance due to this lack of investment”. The unsustainable level of funding resulted in deterioration of infrastructure assets, “giving rise to increased safety risks and unacceptably high commercial risks to the [company’s] various revenue streams”.

It warns journey times across the inter-city network could increase by 10 minutes every year due to underinvestment. It adds it is vital funding is made available to upgrade and replace control and communications systems.

“While safety will continue to be managed, safety standards will be compromised due to the deferral of investment in these safety-critical systems which would require a greater level of human interventions.
“Failure to upgrade the control and communications system could, as has been the case elsewhere, expose Iarnród Éireann to the unacceptable risk of serious collisions on single lines.”

[comcor]

I presume the brief was to create a scary report where even things like Dublin-Galway and Dublin-Kerry were threatened to create a bit of a fuss.

I have the impression that Irish Rail would gladly be rid off Limerick Junction to Waterford, Ennis to Athenry, Limerick to Ballybrophy and at least Wexford to Rosslare anyway.

[Jamie2k9]

I presume the brief was to create a scary report where even things like Dublin-Galway and Dublin-Kerry were threatened to create a bit of a fuss.

I have the impression that Irish Rail would gladly be rid off Limerick Junction to Waterford, Ennis to Athenry, Limerick to Ballybrophy and at least Wexford to Rosslare anyway.

We had a report like it a few years ago......I would expect it will be business as usual.

IE are in a catch 22 situation with Limerick-Wateford and BB-Limerick, Wexford down south won't close, whats a couple of miles of track going to cost them considering the major costs are much further up in terms of coastal problems.

Do the NTA cover the full costs of WRC, BB/Waterford-Limerick?

[Colm Moore]

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Commentary: http://www.irishtimes.com/business/t...rack-1.2843329

Originally Posted by Jamie2k9

Do the NTA cover the full costs of WRC, BB/Waterford-Limerick?

Yes, Irish Rail aren't doing them for the fun.

[Mark Gleeson]

Closing a line doesn't make financial sense

Line A takes in revenue X and makes loss Y
NTA pays PSO at value Y (give or take %)

IE closes line A
IE loses revenue X and PSO Y
IE has to pay out redundancy
IE head office costs remain the same but now spread over fewer lines

Prior to the arrival of EC1370 and the NTA IE would be up Y - X - redundancy in year 1 and Y - X in year 2 (Assuming that the subsidy is greater than revenue)

[comcor]

Originally Posted by Colm Moore

Commentary: http://www.irishtimes.com/business/t...rack-1.2843329Yes, Irish Rail aren't doing them for the fun.

Blessington?

How many people live there?

That hardly seems like a good investment.

There are 6 or 7 large towns round the Dublin and Cork areas that should definitely be ahead of it.

[Jamie2k9]

IE are due to get over 50 million in 2017, according to papers yesterday as well. It's clear they will get the loins share of the 650 by 2021. Question is why did Ross leak the report, test waters for possible closures.

Closing a line doesn't make financial sense

Line A takes in revenue X and makes loss Y
NTA pays PSO at value Y (give or take %)

IE closes line A
IE loses revenue X and PSO Y
IE has to pay out redundancy
IE head office costs remain the same but now spread over fewer lines

Prior to the arrival of EC1370 and the NTA IE would be up Y - X - redundancy in year 1 and Y - X in year 2 (Assuming that the subsidy is greater than revenue)

I guess the NTA have more to gain by getting rid of lines but who is typically behind touting such closures IE or NTA?