THE PUBLIC transport system will collapse next year unless CIÉ implements a realistic business plan, Minister for Transport Leo Varadkar has warned.

In a stark declaration to the Dáil he said €36 million was available for the transport group this year. However, if the semi-State did not make progress in its reforms there would be no money left by the middle to the end of next year to keep it operating.

“Then there will be no choice and public transport will fail.”

Mr Varadkar issued the warning as Fianna Fáil transport spokesman Timmy Dooley questioned why the Minister had withdrawn €36 million from CIÉ two months after he approved it.

Mr Varadkar has ordered the semi-State body to develop a realistic business plan, cost reductions within the group, the sale of non-core asses and the securing of new credit facilities.

Without these reforms, public transport will collapse by the end of next year, the Minister said.

This year he might be able to “take money from one pocket and put it into the other, rob Peter to pay Paul, and kick the can down the road, but I am running out of pockets and I am running out of road”.

If there was no progress on the business plan and other reforms “I will not be able to find the money to keep the companies operating by the middle to end of next year. Then there will be no choice and public transport will fail.”

Mr Dooley said the Minister was giving the company an “exceptionally short timeframe” in which to cut costs and it “could spell disaster for public transport”.

“CIÉ has cut services in rural and urban areas to balance its books and that is impacting on the company’s ability to maintain its comprehensive network.”

The Clare TD said the company already faced a deficit of €40 million this year and the only way it could be dealt with was to increase fares and reduce services.

“When the Minister was in opposition he hit out at fare increases and he was right to do so but he seems to have changed his mind.”

Mr Varadkar said he did not expect CIÉ to find €36 million by the end of the year but it had to make progress “so it does not require an additional subvention next year because I will not have it”.

He acknowledged that CIÉ was struggling with a very difficult financial situation. The Government in July approved €36 million so the companies could continue to operate until the end of 2012.

This brought the total subvention for the year to €278 million. This subvention was higher than in 2010 and “the fifth highest level of subvention ever”.

He said the €36 million had not been handed over since the announcement because “despite a lot of hard work and best efforts insufficient progress has been made to date”.

Even if the funding was provided it would only give “a very short breathing space to CIÉ”.

He said that “to the extent that I can, I will not allow public transport to collapse”.

“The money is available but it will only get the companies to the end of the year.

“I will not have enough money next year, and €36 million will not solve the problems of the company next year.”