Updated, 19:07

THE CABINET has agreed to boost its funding of the public transport provider Córas Iompair Éireann (CIE) by an extra €36 million, saying the extra cash boost is necessary to ensure public transport services remain operational.

The Department of Transport said the Cabinet had this morning approved increasing the CIE subvention to €278 million, the fourth-highest it has ever been.

The €36 million will be found by re-allocating funding from within the Department’s Budget of just under €1.6 billion.

In a statement, transport minister Leo Varadkar and junior minister Alan Kelly said the Department’s “intervention” would ensure that CIE was adequately funded for the immediate future, and could “continue to provide a sufficient service to the travelling public”.

It is not clear to what extent the provision of services had been threatened prior to the extra funding top-up, though the 15 per cent boost to CIE’s annual funding would suggest that services would not be curtailed until later in the year.

The timing of the funding increase may also have been influenced by the political summer recess, with this morning’s Cabinet meeting being the last one before the summer break.

“CIE is lossmaking as a group and its financial position is very difficult,” the ministers said. “The company has run up a substantial debt. However, we are working on a solution.”

Underlying problems

The ministers added that while the extra funding was enough to plug any immediate gap in its services, it would not be enough to correct “the underlying financial and structural problems in the CIE companies”.

“This funding is being allocated because we are conscious of the need to maintain the public transport service, and because we recognise that the financial position of CIE is very difficult.”

This evening CIE said the extra funding would ensure the various public transport companies could “continue to meet the public service obligations required of the Group, and provide a strong public transport service to commuters.”

It added that CIE was undertaking “an urgent series of actions” to address its finances, which had suffered as a result of falling passenger numbers, increased fuel costs, and the overall contraction in the economy.

“All three companies [Iarnród Éireann, Dublin Bus and Bus Éireann] are urgently progressing action plans to further reduce the cost base, and have engaged with staff and trade unions as part of this,” the group said.

Last week RTÉ had reported that 17 staff of Iarnród Éireann, who were due to retire around that time, had been told they could not retire at that particular time – prompting some suggestions that the company did not have sufficient cash to meet their pension lump sums.

The train operator said the redundancies had been delayed for “cash flow management” reasons – but denied any difficulty in paying the lump sums, which RTÉ said could reach €130,000 each.

The delays came despite Iarnród Éireann seeking 450 voluntary redundancies as part of a longer-term cost-cutting exercise.

Read: 450 Irish Rail job loss news ‘not deferred because of referendum’