[Article] State set to cut CIE subsidy again

[Colm Moore]

http://www.rte.ie/news/2011/0420/cie-business.html

State set to cut CIE subsidy again
Updated: 17:11, Wednesday, 20 April 2011

The State subsidy to CIE will be cut again, the Transport Minister, Leo Varadkar, told the Dáil today.

He said the last government had cut the subsidy for this year by 15% to €263m, but the reality was that it would be cut again.

The Minister said he had informed all the relevant parties of this fact. He said the Programme for Government had outlined that the Government would favour public transport over roads - but the roads budget would shrink faster than the public transport one.

He accepted that a cut in the budget would impact on services.

[Thomas J Stamp]

the man does have a point as does Colm mc carthy when he makes the reasonable point that after 2 billion is spent on kit ie still demands the same subsidy as it needed when the kit was mostly clapped out.

[dowlingm]

Serious curtailment to DSP free travel would be my choice. It's a price solution to an income problem as well as causing additional complexity to revenue generation/inspection

[Thomas Ralph]

Originally Posted by dowlingm

Serious curtailment to DSP free travel would be my choice. It's a price solution to an income problem as well as causing additional complexity to revenue generation/inspection

It would be a fine idea (let them use the buses or have a decent discount, say 40%, off walk-up train fares) but politicians won't go near it. Remember what happened when Brian tried to take the medical cards off the over-70s.

[Thomas J Stamp]

kicking the poorest levels of society instead of tackling the hundreds of millions ie has wasted?

heard it all now.

[dowlingm]

Originally Posted by Thomas J Stamp

kicking the poorest levels of society instead of tackling the hundreds of millions ie has wasted?

heard it all now.

Only an acceptable attitude if you think semistate managers can allowed continue in their inability to (as Lyndon Johnson put it) walk and chew gum.

[ThomasJ]

I would have said leave the dsp free travel pass alone, but the problem remains that there are people have it that dont need it and are exploiting it.

What is needed in the social welfare and its across the board, not just the dsp is a fully working social welfare audit system similar to revenues because we are going to need it!

Tackle those who dont need these and leave those who do alone.

[Thomas J Stamp]

these are the sort of comments which usually end my day having a row with a git from Wickla FF on the twitter machine. The reality is that even talking about the Free Passes is allowing the IE managment to get away with it. Its a red herring, its a nothing.

The subsidy that IE gets has been been shown to be what it is - not really needed. Take a look at this comment: http://www.railusers.ie/forum/showpo...2&postcount=55

so, with a reduced subsidy IE can improve services?? It makes you wonder why this magic act was not produced before. The subsidy goes down a big black hole where it is not accounted for. A lot of questions need to be asked, starting at a political level. It is no good for Leo Varadkar or Alan Kelly to hide behind the old "operational matter for the company" line anymore. It is the money of every one of us going into that black hole (and since they pay a great proportion of their income in taxes that includes the Free Pass holders) and therfore it is an operational matter for us.

The questions remain:

1 - how come after all of the investment we have seen over the past decade that IE would still look for the subsidy they got before and during that investment

2 - where does it go

3 - how come, with it being reduced, IE can somehow magic up more services, albeit by trickery with the timetable?

4- where have all the "dedeployed" staff in IE gone to? Despite all of the changes in relation to loco hauled services, gatekeppers, fasttrack, signalling, where are the layoffs? Well, apart from laying off around Heuston doing nothing all day, that is.

5 - where are the services that IE promised they would deliver with the new ICR fleet, and for which they said they needed that fleet in the first place? New fleet is there, but where is the timetable they promised. This being one of the odd things that must have struck mc carthy's mind when he was gazing at the balance sheet?

the excessive political interferance in IE and the railways which led to the WRC phase one debacle is something that, of course, is beyond the realm of McCarthy. Notwithstanding the theory that the Waterford-Rosslare line cuts almost exactly match the money needed for WRC-1, we have to face the fact that IE will close anything that moves to save its skin. Closing lines and re-deploying staff is only a trick you can get away with when you dont have to publish line by line accounts. The staff re-deployed from, say Ballybrophy-Limerick would case only a ripple on the Cork and Limerick Mainlines, but the tell tale effect is there on the bottom line - and that is that despite alol the cutbacks IE claim to have implemented, they still look for the same subsidy. The fact that recently Government has copped on, cut it, and the company can survive on the cuts, says it all.

[Mark Gleeson]

There are no compulsory redundancies full stop so its all but impossible to leverage the investment in a timely fashion. Now the numbers have fallen massively by well over a thousand in the last 5 years but this is not good enough, some of that was done through a fairly generous retirement scheme others still work for Irish Rail but are subcontractors. An investigation into the scale of payoffs is justified at this point

Productivity is the real question there are heaps of staff standing/sitting around in offices around the country doing nothing while passengers are faced with closed booking offices, so you have a double loss, staff doing nothing and passengers unable to pay. Even the booking office in Connolly is closed after 9pm. Then there is the new middle management tier with all kinds of fancy titles who don't do much. When the snow hit in December an army of staff appeared from captivity to man platforms and booking offices what do they do normally? Why are they not there every day

30+ million in savings was magically found when the screw was turned, amazing

Fastrack still exists and carries parcels today but don't tell anyone. There are still guards as well given there jobs do not exist compulsory redundancy is a valid legal option.

Closing lines doesn't save much anyway as with Waterford Rosslare you had a 2.5 million operating cost, a subsidy of 500,000 which was transferred to Bus Eireann more or less and a cost of close to a million to meet the NTA's new rules. The central costs remain in place

With 600,000 passes in circulation its a concern, but we don't know how much Irish Rail get for it since its not shown in the accounts. In rough terms free travel usage is up 25% but the payment is down in real terms. For all we know its a convenient cover story or the biggest social welfare fraud issue. Needless to say some of the international railway companies are actually worried of the huge risk in accepting the free travel pass if they were to operate here, a manager of one company was absolutely astonished

[Thomas J Stamp]

but the FTP is agovernment issue. the social welfare pays the money to IE. in effect it is illusionary money anyway, as the holders of FTP's are not displacing people who pay cash fares. the money the DSW would give to IE either goes towards redcuing the sibsidy or paying wages or paying VAT/PRSI and goes in a circle back to revenue and back to DSW again, just churning money around.

for a private operator they would simply get a cash fare form the DSW instead of the passenger.

I am much more interested in the other points.

[Mark Gleeson]

Problem is the FTP is actually part of the subsidy number, well it can't be anywhere else.

The key from the private side is there is no relationship between, the number of passes, the number of journeys made on the pass and how much you get paid. As the pot is fixed in size if I start a rail company I get a chunk of the cash but everyone else loses, more to the point CIE loses

Taking the example of the 13:30 to Rosslare on a bank holiday Friday, if you removed everyone traveling on a FTP not only would you have space for all the fare paying passengers who got left behind (and so got a refund) along the route most would get seats. Dublin Bus had a ban on free travel passes at peak hour until some political arm twisting was applied

Its a monster which has got out of control and given the country is broke something must be done to ensure those who have a legitimate right to a pass get one and the fraudsters don't. Somewhere in there you make sure a fare proportional to the journey taken is paid. Thats how the NI system works, no hope of rail competition until this is solved in a reasonable fashion, just remember Veoila/RPA originally looked likely to stay outside the free travel scheme on the Luas until a very last minute deal went through the week before the Luas opened.

I wouldn't say Irish Rail is overstaffed, its lost 3000+ staff in the last 25 years but doubled passenger numbers in the same period. Its all about deployment and productivity, if a passenger can't buy a ticket thats a major financial loss. Staff are not deployed in a productive fashion in many areas. Anyone who refuses to redeploy can get statutory redundancy and nothing more

[Thomas J Stamp]

I can point out to you several chaps loitering around heuston who once worked in other duties and no simply stand at the ticket barrier or in the general vacinity doing sfa all day.

as for the FTP, using one service to one destination is the sort of argument which is designed to hide the simple fact that on every other service it is not an issue.

it is actually a simple solution, one that will work for the private companies and one that should work for IE. Since each ftp passenger is supposed to actually get a ticket at the station that cost should then be paid, per ticket, by the DSW to the operator. It is that simple. The line that the FTP people somehow travel in such masses that they have been discomoding people like you and I who do not have a FTP is one that I do not buy, and in fact they have as much rights as I do since the DSW is paying for their ticket instead of they themselves. They are not second class citizens.

if you removed everyone traveling on a FTP not only would you have space for all the fare paying passengers who got left behind

this comment is offensive. Sure stick them all down the back of the bus whilst your at it, eh?

[Mark Gleeson]

Anyone who holds a valid and legally obtained pass should be allowed travel. The 13:30 case is a routine incident every Friday/Saturday during the Summer. Hypothetically removing the DSP scheme would release a considerable number of seats

The fact is the numbers with passes has soared in recent years due in part due to fraud in terms of fake passes and misuse of valid passes.

Hypothetically if Irish Rail doubled the number of DSP passengers it carries the amount of money received in payment is the same number. The DSP don't care about the actual number of journeys its a fixed amount each year and therein is a massive business risk

Guess what there is no list of who has a pass, you can't operate in such conditions the situation needs to be resolved as a matter of urgency. The new smartcard solution will benefit valid pass holders as they won't have to queue anymore and online booking will be possible.

A start would be to find out how much it is and where it is on the accounts

[ThomasJ]

a start would be to scrap the DSP altogether

Setup a dedicated team for the travel section of social welfare. setup a database and applications procedure. Give every authorised pass holder a smart card and accompanying travel id.

Limit passholder permissions based on their travel situation, ie location travel requirements etc

For anyone who requires someone to be with them, give the partner a limited smartcard, and when being used must be accompanied by the passholder.

it would be a start to ensuring those who have not got it legitimately cannot avail of it

[Colm Moore]

Originally Posted by Thomas J Stamp

in effect it is illusionary money anyway, as the holders of FTP's are not displacing people who pay cash fares.

At peak times they can. This was the beauty of the old system, where only specific pass holders were entitled to travel at peak times, e.g. someone ina wheelchair going to work.

Originally Posted by Mark Gleeson

Problem is the FTP is actually part of the subsidy number, well it can't be anywhere else.

No, its down as fares revenue, certainly with Dublin Bus.

The NTA have been linking the subsidy to the likes of schoolchild / child fares.

Originally Posted by Mark Gleeson

Taking the example of the 13:30 to Rosslare on a bank holiday Friday, if you removed everyone traveling on a FTP not only would you have space for all the fare paying passengers who got left behind (and so got a refund) along the route most would get seats. Dublin Bus had a ban on free travel passes at peak hour until some political arm twisting was applied

This applied in various guises to the other companies also. Travel within X miles of Cork and Limerick was restricted at peak times.

Its a monster which has got out of control and given the country is broke something must be done to ensure those who have a legitimate right to a pass get one and the fraudsters don't. Somewhere in there you make sure a fare proportional to the journey taken is paid. Thats how the NI system works, no hope of rail competition until this is solved in a reasonable fashion, just remember Veoila/RPA originally looked likely to stay outside the free travel scheme on the Luas until a very last minute deal went through the week before the Luas opened.

Seamus Brennan had his hand in both the peak time and Luas changes.

Originally Posted by Thomas J Stamp

this comment is offensive. Sure stick them all down the back of the bus whilst your at it, eh?

I don't think Mark is saying that people shouldn't be allowed travel, but that if the DSP want people to be able to travel at peak times, then the DSP needs to pay peak fares. Some operators are given only 70% of the fares by the DSP, with only verified passes holders paid for. Operators also have to carry the scammers, for which they don't get paid and can't reject.

[Thomas J Stamp]

You know, this thread seems to be all about FTP holders. If the DSW is not paying to IE the price per ticket then this should be changed so that they do. In reality it is an accounting exercise anyway, as the money is simply churned form one part of the government account to another.

If it is being resisted by the DSW then it is symbolic of the civil service mentality of turf warfare that I found deeply small minded and depressing when i was in there.

If private operaters are to work here, then indeed they will have to be paid by the state for each free ticket they issue, but that is not a big problem, it can be a part of the terms and conditions of the contract with the state. Operators looking at how IE and the DSW do things and bring turned off by it is crazy. They should just say - "well if that is how IE want to do it, fine. It is not how we want to do it, lets go and talk to the State about that"

I don't think Mark is saying that people shouldn't be allowed travel

Anyone who holds a valid and legally obtained pass should be allowed travel. The 13:30 case is a routine incident every Friday/Saturday during the Summer. Hypothetically removing the DSP scheme would release a considerable number of seats

Mark you are trying to have your cake and eat it. You cannot say that anyone who holds a valid pass should be allowed travel and then say how if you remove the scheme it would release a considerable number of seats.

In my humble experiance the vast vast majority of the FTP holders who actually bother to use them are OAP's. The amount of FTP holders using peak services are not massive. In fact, if it were not for the FTP holders, that average of 14 pax on the WRC would be a hell of a lot less.

This, however, is getting away from the point, and letting IE off the hook. I posted somewhere else about the percentile of revenue growth in IE since 2003, as outlined in the back pages of mc carthy 2. Apart from one year, 2004, Intercity revenue growth has flatlined, and any growth there was - and it was in the rage of 0-5% at best, was wiped out in 2009.

No matter what way you look at it, and no matter how much you want to focus on the FTP as some sort of golden bullet, that is a deplorable result after all of the investment. If any of the businesses I have worked in could show that result after that investment, the p45's would be cutting heads off.

[Mark Gleeson]

What history has taught us is the feast famine funding approach leaves public transport in a mess

First thing we must determine what all government funding is and its relationship to actual use of the service, this brings us accountability

• So what does Irish Rail receive for what from who and under what conditions
• Is this actually spent where it is meant to be, i.e is some of it ring fenced for specific purpose
• Is it proportional to actual usage of the service
• Is the amount paid for each element reasonable
• Is it benchmarked against other railway administrations our friends in Northern Ireland would be a good start and comparable

This all has to happen to enable an open market, if I want to run a rail service I can get part of this cash. For decades freight lost money but the books were balanced by assigning costs to the passenger service aka cross subsidisation. Our friends in the EU banned that as it was unfair in an open market. If you look at the numbers in the 2000-2006 bracket freight was peared down and passenger numbers surged, funny that?

Any subsidy should be proportional to the number of passenger carried, carry more you get more carry less get less. So if you carry 10% more you get 5% more cash but if you lose 5% passengers you lose 10% cash. Until this is in place we are going nowhere as the classic sit on your backside strategy applies

It comes down to a very simple statement, are we willing to pay for the service and if so its our money and should be spent efficiently and in a traceable manner. Given Irish Rail found 30 million in savings in 18 months its clear there was fat that could be trimmed

No one even the Department of Transport can tell us what the Rail Safety Program budget is, how much is it, is it real money or promised etc. You can't operate in the dark and the international railway companies would sure love to know what this budget is as they claim they could get more done for less. That is the key to seeking value

Revenue growth has flatlined once the discounts went online in 2005/6 as average intercity fares have come down while numbers have gone up. Costs have come down significantly in the 2008-2010 bracket but a 6 million fall in passengers hit at that point. That said there is a disproportional increase in passenger numbers vs revenue over the 1997-2007 period which suggests an increased level of fraud. Irish Rail is up 3% on passenger numbers in 2010 v 2009, Dublin Bus, Bus Eireann and Luas all saw falls of up to 10%. We do hit the sweet spot issue at some points it is cheaper not to increase your demand as that requires extra resources and that extra cost exceeds the extra revenue. The DART went through that in the early 1990's. Cork is on the left side of the curve currently and is approaching profitability but if say the line to Youghal is opened bang large scale losses will appear

The most obvious subsidy element to target is FTP fraud as it hurts only those who are committing fraud its a quick fix which removes passengers who a) are not paying but should, b) are not actually counted in most cases. The equality authority has ruled the need to queue at a booking office as discrimination so no one actually knows the numbers. Those who have valid passes have complained of intrusive inspections as a crack down is attempted as the current pass is a joke and can be made up by anyone with a colour laser printer

[Thomas Ralph]

Originally Posted by Mark Gleeson

The equality authority has ruled the need to queue at a booking office as discrimination so no one actually knows the numbers.

I believe the ruling was that the refusal to issue FTP tickets the day before was discrimination, because revenue tickets would be issued the day before.

Originally Posted by Mark Gleeson

Those who have valid passes have complained of intrusive inspections as a crack down is attempted as the current pass is a joke and can be made up by anyone with a colour laser printer

This is the real issue. The pass ought to be a plastic smartcard with security features. The card should be able to be waved at ticket gates in the short hop area, with tickets still issued for longer journeys.

[Mark Gleeson]

Originally Posted by Thomas Ralph

I believe the ruling was that the refusal to issue FTP tickets the day before was discrimination, because revenue tickets would be issued the day before.

That was the case but the ruling opened the door to not needing a ticket

This is the real issue. The pass ought to be a plastic smartcard with security features. The card should be able to be waved at ticket gates in the short hop area, with tickets still issued for longer journeys.

The RPA tell me this is in the ITS program but can't give a date.

[Thomas J Stamp]

Originally Posted by Mark Gleeson

Revenue growth has flatlined once the discounts went online in 2005/6 as average intercity fares have come down while numbers have gone up. Costs have come down significantly in the 2008-2010 bracket but a 6 million fall in passengers hit at that point. That said there is a disproportional increase in passenger numbers vs revenue over the 1997-2007 period which suggests an increased level of fraud.

which fraud has mostly been tackled by the introdcution of ticket barriers.

Irish Rail is up 3% on passenger numbers in 2010 v 2009, Dublin Bus, Bus Eireann and Luas all saw falls of up to 10%. We do hit the sweet spot issue at some points it is cheaper not to increase your demand as that requires extra resources and that extra cost exceeds the extra revenue.

up 3% but what is the revenue? I do not accept that online discounts can explain away the serious level of revenue non-generation in the missld eof the boomist-boom we ever had, which results in vast population increases as far out as Thurles ect. Those on monthy and annual cards that i know of certainly do not avail of any discounts and the discounted fares are there to attract new passengers for services which would not be selling otherwise. As a result you would tent to expect that the revenues would rise.

Unless, of course, IE are so hopeless that they have brought in a discount scheme of such generosity and general availability that results in them losing lots and lots of money.

Also, what resources are you talking about???? What extra staff??? To work booking offices? They are there already. To loiter around heuston and connolly gazing at the ticket barriers doing their old jobs? We have plenty of them as well. Pity we cant put them onto trains to check tickets isnt it? It would take zero new resources today, and we are talking today, not back in the commuter boom of the early 90's.

The equality authority has ruled the need to queue at a booking office as discrimination

no they did not. they ruled that the absence of an option to book in advance, online and to book in advance and/or online the same options available to those who do not have a FTP was discriminatory.

Your interpretation of the ruling seems to suggest that FTP holders can waltz through a station and onto a trina with out a ticket.

Also, I must respectfully point out, in the interest of clarity to the readers of this thread that your post is filled with lines which IE attempted to use to justify their stance in this case, for example:

The Respondent submitted that the Free Travel Scheme is well recognised as having potential for fraud. The travel Passes which are issued by the (now) Department of Social Protection do not have an expiry date or proper identification and they are not uniform in appearance. Additionally it is easy to counterfeit them and Gardai have uncovered factories producing invalid travel Passes. As there is no legislative basis for the Scheme, there are no grounds to prosecute offenders with invalid cards, and thus there is little or no deterrent against fraud. The respondent points out that there are over 600,000 free travel card holders and the possibility of fraud is a real concern to the company

Therefore, for balance, the Equality Tribunal did rule on this point:

The respondent submits that their reason for treating the holders of Free Travel Passes differently is due to the high risk of fraud, as outlined at 3.3 and 3.4 above. The written evidence provided by the Respondent to support this contention was dated and extremely vague; thus it can only be of limited evidential value.

and

However I note the oral evidence of the respondent's marketing manager, that there is indeed a significant risk of fraud due to the lack of traceability and accountability for each Free Travel Pass issued. The respondent has no access to the database of Free Travel Pass holders and thus no foolproof way to check for invalid or counterfeit Passes

I have bolded those parts.

So, in effect, it is a suspiction, it is not proved, it is not a fact, and yet it is portrayed as such.

This is the link http://www.equalitytribunal.ie/Datab...se-Report.html