The Cabinet yesterday discussed the troubled financial situation at the State transport company after Minister for Transport Leo Varadkar presented the report.
According to Government sources familiar with the report, the company reported a surplus of some €11.7 million. But the surplus only came about because of intervention and the exceptional sale of land assets owned by the State company. It received an additional subvention payment of €36 million in 2012 and the sale of properties in Spencer Dock in Dublin yielded a further €20 million.
The surplus compared to a deficit of €6 million in 2011.
Sources said the report has highlighted that CIE’s problems are more severe than simply a matter of falling State payments under Public Service Obligation (PSO) arrangements.
According to the sources, it has underlying problems in terms of revenue: current revenues of €725 million were down by €64 million in 2012 compared to 2011. These figures excluded the monies paid under PSO.
The group had an operating deficit of €295 million before State grants, property disposals and interest were taken into account (€298 million in 2011).
The report has projected that there will be further deficits in 2013 and 2014 but has predicted a return to profitability in 2015.
On a positive note, the sources said the company has received an unqualified audit report for the first time in a number of years, with no concern being expressed about its ongoing sustainability.
Earlier this year, the Government sanctioned an extension of CIE’s credit facilities for its €100 million in borrowings.
It is understood that Mr Varadkar, while concerned about the underlying financial situations, will not take any immediate action based on the annual report’s findings, which were well flagged.
The Minister has already put in place long-term policies to revive the fortunes of the company which have been flagging in recent years. It is understood that the Government is confident that the Group’s projections of a return to profitability by 2012 will be delivered. That scenario will partly rely on continuing industrial peace and no reoccurrence of the industrial action by bus drivers that affected Bus Éireann earlier this month.
