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?

[James Howard]

That report is so obviously kite-flying but I'd say it is seriously likely that North Tipp and Limerick Junction to Waterford's days are numbered. Things simply can't go on as they are and it will be a matter of either automating the lines or closing them. Ennis to Athenry is a different case given that the operating costs aren't quite as crazy.

There is a fundamental issue though where Irish Rail are charging 35 euro for an open return for a 70 mile return journey from my station on trains that are for the most part packed and extremely lightly staffed. Yet every train requires a subsidy. Demand is obviously very high yet nobody can afford the fares. The real nub of the issue is that until some way is found to pay for the large numbers of people travelling for free (legally or otherwise), the railway system will remain in crisis.

[grainne whale]

Originally Posted by James Howard

That report is so obviously kite-flying but I'd say it is seriously likely that North Tipp and Limerick Junction to Waterford's days are numbered. Things simply can't go on as they are and it will be a matter of either automating the lines or closing them. Ennis to Athenry is a different case given that the operating costs aren't quite as crazy.

There is a fundamental issue though where Irish Rail are charging 35 euro for an open return for a 70 mile return journey from my station on trains that are for the most part packed and extremely lightly staffed. Yet every train requires a subsidy. Demand is obviously very high yet nobody can afford the fares. The real nub of the issue is that until some way is found to pay for the large numbers of people travelling for free (legally or otherwise), the railway system will remain in crisis.

Tell me more - people travelling for free (legally)

[ACustomer]

GW: yes, we're the >65s! Don't worry, some day you will benefit too.

[James Howard]

Note that I didn't suggest the over 65's don't travel for free although I seriously doubt that this facility will be extended to me when I reach that age. The issue is that Irish Rail isn't receiving a fair price for this facility which would cost me something like 6,000 euro a year to pay for myself. This needs to be addressed by either increasing the free travel contribution from state funds or by asking users to contribute a portion of their fare.

As a taxpayer, I personally don't mind a bit more of my tax going into the free travel as it a good use of state funds - the health benefits (and resulting HSE savings) of keeping older people active are pretty obvious. As somebody who pays a lot of money to travel by train, I do however resent part of my fare being used to subsidise other peoples' travel.

Fares - particularly open returns have reached a point where they are getting pretty unaffordable yet the trains are generally pretty busy and still Irish Rail can't make money. Something doesn't add up. Either too few people are buying tickets or Irish Rail are spectacularly inefficient.

[ACustomer]

JAmes Howard: you are right. In many respects the Free Travel scheme is administered in a completely shambolic way as far as the CIE companies are concerned. Basically it is now a lump-sum payment, so the marginal revenue to Irish Rail from more passengers is zero. The transport companies should be paid for each over-65 they carry: not a lot , just to cover at least the marginal costs of off-peak passengers. Over-65s should have only limited access to peak services.

Needless to say there there is total political cowardice when it comes to these issues. MAybe I can't blame the politicians too much when I can guess how the whingeing media would react.

[grainne whale]

Originally Posted by ACustomer

GW: yes, we're the >65s! Don't worry, some day you will benefit too.

Yes, it won't be too far off now, my point is that they are not actually travelling for free (we) have made our contribution over all the years of working.

[grainne whale]

Originally Posted by James Howard

Note that I didn't suggest the over 65's don't travel for free although I seriously doubt that this facility will be extended to me when I reach that age. The issue is that Irish Rail isn't receiving a fair price for this facility which would cost me something like 6,000 euro a year to pay for myself. This needs to be addressed by either increasing the free travel contribution from state funds or by asking users to contribute a portion of their fare.

As a taxpayer, I personally don't mind a bit more of my tax going into the free travel as it a good use of state funds - the health benefits (and resulting HSE savings) of keeping older people active are pretty obvious. As somebody who pays a lot of money to travel by train, I do however resent part of my fare being used to subsidise other peoples' travel.

Fares - particularly open returns have reached a point where they are getting pretty unaffordable yet the trains are generally pretty busy and still Irish Rail can't make money. Something doesn't add up. Either too few people are buying tickets or Irish Rail are spectacularly inefficient.

Scrap, car parking changes at stations and people will use the train more. Travelling by bus is just as quick and no car parking changes.

[comcor]

Originally Posted by grainne whale

Yes, it won't be too far off now, my point is that they are not actually travelling for free (we) have made our contribution over all the year working.

That's fair enough, but the problem is that over 65s have made their contribution to the Government, but the Government haven't handed over a fair share to transportation services.

[Colm Moore]

Originally Posted by grainne whale

Yes, it won't be too far off now, my point is that they are not actually travelling for free (we) have made our contribution over all the years of working.

Originally Posted by grainne whale

Scrap, car parking changes at stations and people will use the train more. Travelling by bus is just as quick and no car parking changes.

Anything that is free at the point of use is at risk of being misused / abused.

[grainne whale]

Originally Posted by Colm Moore

Anything that is free at the point of use is at risk of being misused / abused.

That may very well be the case - however it discourages people from travelling by train (where I live in Celbridge) nobody is going to drive to the station (1.5 miles from town) and pay for parking on top of the train fare - it's far easier to hop on a bus. There are no parking charges in Clondalkin / Fonthill station and the parking there is not abused.

[Jamie2k9]

There are no parking charges in Clondalkin / Fonthill station and the parking there is not abused.

That's because it's miles from anywhere useful.

I agree parking charges are a problem but regular users get reasonable deals and I think continued promoting of this is required.

[grainne whale]

Originally Posted by Jamie2k9

That's because it's miles from anywhere useful.

I agree parking charges are a problem but regular users get reasonable deals and I think continued promoting of this is required.

Now that would be an idea - free parking where stations 'are miles from anywhere' should be free - ie Hazelhatch/ Celbridge

[James Howard]

While regular users used to get very reasonable deals on annual passes, this has gone up by 50% over the last 4 years. Since it's now down to about a 40% discount on 12 monthlies, that will be eroded entirely over the next 3 to 4 years at this rate.

I do think that on principle, you should be charged a bit extra to park a car at the station but for some stations enforcement costs must come pretty close to the revenue. By the time you've factored in the revenue lost this has to almost entirely absorb the income stream from parking.

My understanding is that Irish Rail get about a million euro a year from parking. This is the revenue gained from about 250 to 300 long-distance passes or about 40,000 day returns. I tend to encourage friends and neighbours to use the train when travelling to Dublin as it is so much easier than driving but the most common reason people give for driving aside from the train not going where they need to go is the parking charges.

4.50 on top of 25 euro for a journey than can be done on 20 euro of diesel tips the balance for a lot of people and makes it senseless to use the train if two people are travelling.