If CIE's management has complained for years that gross underfunding and poor industrial relations have undermined the performance of its companies, the implication in Mr Brian Joyce's controversial letter of resignation last Monday was that his disagreement with the Minister for Public Enterprise, Ms O'Rourke, over the group's autonomy hadn't helped either.
Mr Joyce wrote of the necessity of "handing back the management of the CIE companies to the managers within them", stating that the adoption of well-defined lines of demarcation in the private sector on the roles of shareholder, board and executive would benefit the group greatly.
The outgoing chairman's case was clear: Government intervention in industrial relations disputes; the failure to subvent the companies by means of public service contracts; and the inability to independently implement fare increases meant CIE did not have the autonomy it required to deliver the services expected of it.
Informed sources agree that related issues are the core problems facing the executives Mr Joyce left behind. These include the managing directors of the three CIE companies - Dr Alan Westwell at Dublin Bus, Mr Bill Lilley at Bus Eireann and Mr Joe Meagher at Iarnrod Eireann.
While declining to discuss the politics of the situation, CIE's group chief executive Michael McDonnell addressed these issues yesterday in a statement to the Oireachtas Joint Committee on Public Enterprise and Transport.
He said the industrial relations situation was not "chronically bad", but he conceded that the group had "serious problems" which need to be addressed.
"The root cause of whatever bad industrial relations there are in the CIE group is low basic pay, due to years of gross underfunding for public transport."
Later, CIE's chief financial officer, Mr Jim Cullen, told the committee that a 5 per cent wage increase for Dublin Bus drivers - "as we're talking about now" - would have to be funded by an increase in fares.
Of course, this would be for the Government to decide. CIE executives are fond of pointing out that a 5 per cent fare rise last January was the first since 1991.
"We also need more certainty regarding funding for the group, which is why we sought to negotiate public service contracts with the Government," Mr McDonnell said. However, he said the Attorney General had advised the Government not to proceed with the contracts.
On its subsidy, the group has argued that its total subvention decreased from £116 million in 1987 to £107 million in 1997, rendering investment in the three companies difficult if not impossible.
But Mr McDonnell said yesterday that the provision of £2.1 billion for public transport in the National Development Plan would "substantially eliminate the current investment backlog in public transport after two decades of gross under-investment".
The Government sub-committee in charge of the plan - which includes Ms O'Rourke - is likely to monitor this investment very closely. It is understood that the Minister asked CIE to seek a full-time head of programmes and projects to implement the plan after concern was raised that the person currently filling that role was working part-time only. This position, which will command a salary of more than £100,000, was advertised last Sunday.
For existing managers, implementing the plan will necessarily involve tough negotiations with the group's trade unions. Given that the National Bus and Railworkers' Union (NBRU) and SIPTU will not sit in the same room during talks at the Labour Relations Commission on the current Dublin Bus dispute over pay, this will be difficult.
Changes in work practices have never come easy at CIE, as demonstrated in this week's audit report on the implementation of the rail safety. "Certain safety issues were being caught up in trade union/management negotiations and used as bargaining tools," wrote Ms O'Rourke's consultants, International Risk Management Services. At Iarnrod Eireann, Mr Meagher will be keenly aware that the consultants said the company was in danger of "trying to do too much, too quickly, and not consolidating upon safety improvements in a methodical and robust manner". Unlike his counterparts in Dublin Bus and Bus Eireann, Mr Meagher has worked for CIE throughout his career.
He joined the group in 1972 as an engineering graduate and worked in its bus divisions before joining Iarnrod Eireann in 1992.
At Bus Eireann, Mr Lilley is seen by one well-placed source as an effective manager, but one who has been held back by conservative elements within the company's management. "Some of the traditional people don't understand the methods and motives of trying to make change."
A former managing director at Coca Cola's Irish bottling division, Mr Lilley had encountered difficulty trying to establish harmony on strategy and direction at Bus Eireann, the source said.
Dr Westwell, an Englishman who has worked in public transport for almost 40 years in the public and private sectors, is seen as close to Mr McDonnell. Separate sources familiar with the management of Dublin Bus said he had worked effectively with the company's human resources manager, Mr Gerry Maguire, who is also close to Mr McDonnell. The sources also pointed out that Dublin Bus was the only company where the 1994 viability plan was fully implemented. Another source maintains that Dr Westwell, who arrived in Ireland in 1997, is seen as "slightly aloof" figure.
Of Mr McDonnell, many sources state that the chief executive is highly intelligent but they stress that the former Department of Finance official inherited a very difficult situation - not least because of the funding shortfall - when he joined CIE in the mid-1990s. A straight talker who is seen as "gung ho", figures who have worked with Mr McDonnell say he is an able administrator. However, they stress that his experience has been chiefly in regulation and not in management. Nor is his relationship with Ms O'Rourke particularly close.
