Privatization would be a reprehensible shirking of responsibility, argues LY activist Jake Murray. It is time for the government to step up and fund the development of a quality public transport service.
A frightening and remarkably understated warning closes out the (now departed) Chief Executive’s statement on finances in Iarnrod Eireann’s annual report for 2016:
“Solvency remains a serious issue for the company and the balance sheet cannot sustain any unexpected financial shocks.”
I should think not. Irish rail has run at a deficit for 11 of the 13 years between 2003 and 2016, when its last report was published. Prompting many a casual observer in Ireland down through the years to ask, ‘Why is Irish Rail always out of money?’
Well it’s not for lack of trying. As well as making continuous staffing cuts and instituting pay freezes, the company has also tendered services such as catering and IT to private bodies. The introduction of Student Travel cards and their successor, student Leap cards, was not just a success in terms of sales, but is now the cornerstone of Iarnrod Eireann’s marketing strategy to encourage greater use of the rail network by students.
An overall upward trend in commuter volume (though there was a period of lower volume after the economic crash) and consistent punctuality and safety scoring have been the hallmarks of Iarnrod Eireann’s attempts to right itself over the last decade and a half. This leaves aside considerations such as a refurbished fleet of DART, Commuter and Intercity services that run with more frequency, stop at more stations and have wi-fi as standard compared to the fleet of the early-mid 00’s. This has all been achieved against a backdrop of constantly shrinking payments made directly to Iarnrod Eireann by the state.
So running costs are down, passenger volume is up, quality and safety is up and all of this has been achieved largely off the backs of the employees at the company as the state withdraws its financial support. Why then is Iarnrod Eireann running a deficit into the hundreds of millions?
A factor in this underperformance are lines that were constructed or reopened to please the electorate rather than on the assumption that they would provide good value for money. A rail review report in 2016 cites Limerick to Ballybrophy as an underperforming line that served just 25,000 passenger journeys annually and cost the state €550 per passenger journey.
The same report also highlighted that each passenger journey on the DART cost the State just 90c, which is very good value for money. This suggests the issue is not whether a state company should develop and run the railway but how the money the company has available to it should be used.
While some would argue that lines such as Limerick to Ballybrophy can be helpful in the development of the infrastructure of rural and urban areas outside of Dublin, this must be done in a way that really delivers for the taxpayer and facilitates commercial and social development. This line, and others like it, show where state subsidies are grossly misspent and are harming the financial position of Iarnrod Eireann.
A second factor in some of Iarnrod Eireann’s worst performing years were significant one time losses in the form of redundancy payments. Staffing at Iarnrod Eireann is now at a bare minimum and any further cuts would appear to be untenable when potential union action is taken into account. A collapse of staff levels would also be counterproductive to growing service frequency on performing lines. These kind of financial losses are unlikely to be incurred again within the foreseeable future of the company.
So why then is this writer not arguing for a privatization of the industry, something recommended in 2015 by the European Commission?
Simply put, privatization would be a reprehensible shirking of responsibility. Ireland is still in a period of significant social and economic change. Not only is the move from a rural to an urban society an ongoing challenge for planning and development of transport but the fast approaching reality of having an external border for the EU cut across our small island is a prospect that would scare any private company off cross-border investment in the short term. Being able to plan the development of the rail network at a national level in order to facilitate our economic and social development is crucial to managing these changes.
While differences of opinion between management and workers at Iarnrod Eireann over the best way forward for the company persist, it has to be said that neither side failed to make improvements to the efficiency and quality of service of the company during the worst years of the recession. Iarnrod Eireann as a whole has done its part. It is time for the government to step up and do its part. It is time to support an underfunded pillar of national development and to bite the political bullet of closing rail lines that were opened without consideration to their necessity.
(The views expressed in Left Tribune articles are those of the author(s) and do not necessarily reflect those of Labour Youth).