Committee Reports::Report No. 04 - Córas Iompar Éireann::10 October, 1979::Appendix



1. Introduction

The APTU was formed to press for a better deal for bus and train passengers, and for an increased national commitment to public transport. We would agree with most of what the Chairman of CIE said before the Committee on 25th April, especially his call for a national commitment to a public transport policy. We realise that many problems are outside CIE’s control, and we discussed these more fully in our submission to the Transport Consultative Commission.

In this report we have concentrated on those aspects of CIE which may present obstacles to the job of running and promoting a good service in the national interest. Clearer definition of “social service” is necessary both to justify their subsidy and to encourage efficiency of operation. Greater democracy is needed, and the management, workers, and customers need to join forces rather than being in conflict. We give particular examples where CIE’s handling of a problem has been contrary to the national interest—the one-man bus question and the closure of railways.

2. Need for justifying the subsidy and being more accountable

Public transport is an essential service to the nation, potentially providing the most efficient, cost-effective and equitable way of transporting people. Its subsidy should be aimed at achieving this and should be weighed against the cost of coping without good public transport.

So the most important questions must be: Do CIE regard public transport this way? And are they organised in a way that will provide this service?

Those representatives of CIE who have met the APTU have generally been confident that they are “on to a good thing” in running public transport—that it is an important service, worthy of subsidy, and that it could be a really flourishing business, at the centre of the nation’s communications. But we are not so certain that this view is held throughout CIE. There would seem to be some in fairly high positions who see it as a dying business, and don’t particularly care about its success or otherwise in catering for transport needs. The wide use of cars by employees looks like a symptom of lack of commitment to their employer’s function.

CIE have been under constant pressure from two sides—to provide service and to cut spending. No one has properly defined the correct balance, because no one has said anything definitive about the nature of the “social service” they are providing. But CIE themselves are partly responsible for this, because they have never defined it either. Things have changed recently—for years the notion of annual “loss” was accepted, while the latest Annual Report emphasises that the subsidy is the price necessary for the service.

We would like to see this carried further, with the Board announcing what would happen if their service, or any part of it, were not provided, thus being able to say confidently. “CIE saved the taxpayers so many million pounds this year. “Or are they not confident that their services are as valuable as that? Certainly they could prove that their subsidy is better use of money that many competing road projects. Maybe the McKinsey Report has put people off this idea—as far as I can see, it missed the point as regards many of the social benefits of public transport.

Perhaps they are reluctant to alter the somewhat enviable position of being able to spend over £30m. a year of public money without being accountable for how it is spent, since in practice the Minister usually accepts the Board’s reasons for each action. This shows that CIE is not geared to meeting one of the aims stated above—that of providing services according to their contribution to the national interest. The whole notion of “providing services to order” is unknown to CIE.

The structure of the Córas is more suited to the period following 1958 when they were expected to be self-supporting. CIE cannot be called a democratic organisation. Where unhealthy industrial relations have led to unnecessary restrictive practices, this has moved the service even further away from being a servant of national needs.

Too often they have argued that objectors don’t understand the problems involved in running their services, but then who is to be the judge of their competence? It would be far better if they tried to increase public awareness of the problems involved. Instead of saying, “We can’t afford to do that,” or “It just can’t be done,” it would be much better if they added. “But with an extra £—— in subsidy from some interested body, we would do it,” or else. “If another operator wants to do it (subject to certain conditions) we will co-operate,” or else. “With a few more contracts we could do it.” The emphasis must be on flexibility.

It is encouraging to see this approach being used recently for the urban transport problem. CIE have stated quite clearly what conditions are necessary for improving services in Dublin—priority systems for buses, and new stock for the railways. And they have succeeded in getting a lot of public support for these proposals, and in diverting public action towards the Government and Local Authorities.

It would help greatly if all major decisions could be thrown open in this way. We will be looking later at their handling of railway closures, where no mention was ever made of what conditions, or even terms of contract, would secure the retention of service. The line was to close, and that was that. CIE should remember that there is no other authority involved in the planning of public transport, and where a service is desirable but they can’t afford it, they have a duty to say so.

3. Need for a combined effort

CIE is involved in a struggle, not only against competing uses of public money, but against a powerful motorists’ lobby which seeks to reduce the subsidy while also undermining CIE’s commercial prospects, and to influence the Government to carry out as much road construction as possible. CIE is therefore an advertisement for the cause of public transport—they must provide an adequate service, and become living evidence that a policy oriented towards public transport makes sense. This is in the interests of management, workers and passengers, so it is important that these three join forces in a combined effort.

Unfortunately, the whole cause is hampered by bad industrial relations. We accept that they are not as bad as in some other organisations, but this is not good enough. Dublin’s buses have not operated a proper service since the beginning of 1979, and no private operator would survive in such conditions. Strikes in public transport have an immediate effect on thousands of people, and action by a few workers can cause wide-spread disruption. If this is the best that can be achieved in such a large organisation, it is not good enough. If it involves splitting it up into groups with a certain degree of independence, possibly as workers co-operatives, then it is worth it if it improves industrial relations. The present situation in Dublin is playing into the hands of those who would like to see public transport declining.

CIE should give some thought to getting the customers on their side. They must of course, show themselves to be flexible, and the ideas described in paragraph 2 would be relevant.

The structure of CIE is geared more towards that of a body that can function without having to fight for its living. This will have to change to meet today’s needs.

In all this we don’t mean to give the impression that CIE are not providing a service to the nation. Many essential services are provided—and not appreciated—which would not be possible without subsidy. The point is that this is left too much to chance—the methods of making important decisions do not guarantee that service will match subsidy, as their paymasters and customers have a right to expect. It is also possible in a nationwide organisation for a whole country’s bus services to be neglected, or an important railway to be closed and the whole matter dismissed as purely a local affair.

4. How the conflict between business and service can lead to inefficiency

Because the notion of “public service” is not properly defined and quantified. CIE are under constant pressure both to cut losses and to provide a service. Here we list some of the ways that this conflict can lead to inefficient management. This list really only asks questions—it opens up a line of inquiry into what sort of things can go wrong.

First, since there is no clearly defined aim, there is no proper measure of success in any plan. That it is possible for people to survive in CIE who would not survive in private business. If the decision-makers lack a sense of what is good business, it is possible for false economies to be made—apparently saving money to cut service, but actually making the financial situation worse as well, thus satisfying no one.

The biggest example of this seems to be that CIE sometimes lack the normal businessman’s fear of losing customers. Passengers lost from one service are often lost from others, because both choice and quality are vital in modern public transport. There is often indifference to the comfort of passengers, without realising that this is bad for business. The delay in providing buses to new housing estates is another false economy—a private tradesman would make sure he enlisted new customers quickly.

With the conflicting demands made on CIE, there are always two arguments to fall back on in order to justify any decision—financial considerations, or the provision of service. The latter can be used to justify extravagance—though more often than not, a proper quantification of social service would justify a move that looks extravagant to some. By falling back on the argument about saving money, they sometimes make big service cuts to save small amounts of money (see para. 6).

There is also the danger of political or other influence behind the scenes. It has been alleged, for example, that the reason for the deteriorating rail connections at Rosslare is to help boost business for B & I, an Irish but car-oriented shipping line, at the expense of British Rail, who provide a ready-made market of train passengers. This is ultimately against CIE’s interests as an operator of public transport, but quoting the deficit on the rail connections (actually very small) provides a convenient excuse. We are not saying that this is true—only that it can happen in the absence of a clear objective.

Our solution to all these is to define the benefits to the nation provided by public transport—since most of them can be put in money terms. If the subsidy is properly related to the degree of service, and treated as revenue, then normal principles of efficiency can apply, and there would be no room for using either business or service to justify what is clearly contrary to the national interest. CIE should take the initiative in quantifying benefits.

5. CIE’s handling of the one-man bus issue

The two main disadvantages of the one-man operation of buses are the delay to passengers, and the reduction in numbers employed. The first could be analysed by experiment if the unions were willing.

As regards the question of employment, this is a by-product of public transport which is a service to the country in these days of high unemployment, so the provision of jobs is worthy of special subsidy. Our main point here is that CIE have never proposed the idea of special subsidy—their accounting methods are too narrow-minded, and never regard labour as anything but cost, despite the job situation. Similarly, the unions, pressing for the retention of conductors, have never said where the extra money should come from.

Our proposal works like this—Extending the idea of conditional subsidy to include job creation, the Government should pay CIE a grant for each man employed who would otherwise be out of work. Thus the marginal cost of each post is reduced, as far as CIE are concerned. Efficiency is thus re-defined, and the employment of conductors in the most pressing cases (e.g. busy routes at rush-hours) becomes economically justified. In less busy situations we would like the unions to be more flexible.

In other areas, this new definition of efficient use of manpower could result in other improvements where service has suffered, simply because of the high cost of labour. Notice that we are not in any way justifying paying men to do nothing, but suggesting a very cheap way (from the Government’s point of view) of allowing service to improve where some form of under-staffing exists at present, as well as restoring some services which become uneconomical only because of high labour costs.

6. CIE’s handling of railway closures

The whole history of railway closures is a national disgrace. Since 1958 (when the present Act came into force), lines and stations were closed in the period 1958-64, more in 1967, then again 1975-78. It comes in phases: thus it cannot be the only way out when a service is too uneconomical.

The option of closure keeps being raised as a possible economy measure, because no one has stated in factual terms what the advantages of railways are. It has all been left to individual judgement.

Let us examine what happens when a train service is replaced by buses. Experience shows that, although the buses are able to cater for all former train passengers, they actually attract far less passengers, since some now go by car, and others travel less often. The bus is a less attractive form of transport, so we can expect to lose customers. Since the route connects with neighbouring trains and buses, these will lose passengers as well.

The whole assumption behind railway closures is that the same passengers will in fact use the new bus route. If this fails, the theory fails. In practice, the bus will be less economical than predicted, and revenue on neighbouring services will drop. The latter effect is never attributed to the closure. The whole thing may leave CIE in a worse financial state than before—it is a prime example of a false economy due to disregard of passenger comfort (see para. 4). To make matters worse, it reduces the role the public transport in the life of the area served; more car journeys are made, adding traffic to the roads. Furthermore, increasing losses on the bus route have often caused its reduction or withdrawal later on. Over the years, experience shows that these replacement buses have been reduced to a much greater extent than either long established bus routes or train services that have been properly developed.

Contrary to popular opinion, the main loser is CIE, and the taxpayers in whose name the closures are supposedly carried out. The people lose quality of service, the region suffers through lack of communication (which is difficult to substantiate), and the greatest tangible loss to the travellers is when the bus service is cut later on. Thus we can blame CIE for not showing up the option of closure to be the false economy it really is.

Notice that we have never had an experimental closure. The closures of the sixties were followed by immediate lifting of the tracks, so there was obviously no intention of monitoring the results to see if the service would be better restored. Lines closed in the seventies were not lifted, but it is quite clear that CIE have no intention of going back to check that the closures actually did result in an overall saving.

A study of the closures since 1975 reveals further facts that need to be brought before the Joint Committee. In my report “Passenger train operation between Limerick and Claremorris—mistakes of the past and a plan for the future,” written just after this main line closed in 1976. I have described events leading up to the closure. The timetables in the last few years became more and more inefficient by running the trains at off-peak times only (compared to the same number of trains at more useful times a few years before), and running buses in competition with the trains (always with a slight edge over them in terms of connections). No publicity was given to the train service, in contrast to the extensive advertising of the replacement buses.

Where the bus service has advantages over the train, this is because of the effort that was put into planning it, not because of any inherent advantages in buses. Restoration of a properly planned mixture of trains and buses would bring in many more customers and save the nation’s money.

There have been other station closures since then, mostly having similar running-down period, and often no bus replacement. It doesn’t matter if this running-down was deliberate or through negligence; CIE have not handled the matter honestly, and have not put the options open for everyone to see.

We appreciate the effort that they have put into developing the lines radiating from Dublin, and agree with their call for new coaches. CIE will claim that these closures were necessary to concentrate resources on the bigger lines; in fact the opposite is true the lines help each other by connections and increasing choice. As well as that, if they want commitment from the Government to the railway system, they must face up honestly to the damage done by closing a railway. It makes nonsense to try to persuade people in places like Ennis and Tuam that they don’t need trains, and that road services will do just as well; and at the same time look for more money for the lines they choose to develop. In the case of the Limerick-Rosslare line (which still hangs in the balance with an inefficient timetable) CIE spokesmen have used all sorts of anti-railway arguments to try to win the case for the closing of the line, and now they wonder why the nation isn’t committed to railways.

Notice the heavy-handed undemocratic manner in which these closures have been carried out. At the statutory minimum notice of two months, the closure is presented as final and definite, though they may have neglected investment for years before. The Chairman said the nation must decide what sort of railway system it wants: to do this, CIE must present the facts about closures and the savings honestly, and give a real choice, not a final decision.

The proper procedure should be as follows. From the experience of earlier closures, an estimate can be made of the likely effect of using buses instead of trains. This should be published. Alternative means of running the railway — including special local subsidy of other operators — should be proposed and ideas welcome. If closure finally takes place, it should be monitored to examine whether it has really saved money. If not, the train service should be restored. At present this should be done retrospectively for all closures on railways still in place. Many large towns have been unjustly deprived of their train services and deserve to have re-opening considered. The initial capital cost would be small, and operating losses would then be reduced.

It should be noted that CIE’s stated policy of closing all railways that don’t radiate from Dublin (Annual Report 1975) was never approved by the Oireachtas. Last time the general railway question (as distinct from particular closures) was brought before the House, in 1974, it was agreed that nearly all the national railway system should be retained and developed. CIE have therefore no right to make such a plan, which is contrary to the interests of decentralisation.

We call on the Joint Committee to open an inquiry into the question of railway closures, with a view to the possibility of restoring services, and to establish in factual terms the enormous benefits of the railway system as a whole, which will secure its future without question.

30 April, 1979.