THE ACTING CEO of Bus Eireann has warned an Oireachtas committee that the entire company will be insolvent by the end of the year if drastic action is not taken.
Ray Hernan told the Transport Committee he wrote to all staff last week to inform them that organisation’s finances were in a “critical state”.
He said if something is not done now, the entire company will go bust.
That is why I am saying there is such an urgency to implement an emergency plan.
All the company, not just Expressway will go out of business… all jobs will be lost… This is not scaremongering.
Controversy has surrounded the semi-state company in recent weeks after a confidential report prepared by firm Grant Thornton suggested the loss of the services and possible wage cuts would be a necessary evil in order to maintain the national bus carrier’s viability.
Transport unions have since threatened industrial action.
Today, Hernan said he is determined to lead them out of the financial crisis, stating that he will put forward a cost-effective plan that will deliver savings.
I wish to make it clear we are not bluntly targeting our staff to fix our financial problems.
All structures and all costs are being assessed, including management structures, he said.
Job losses
The company’s boss said job losses are not on the agenda or part of their plan, but said a root-and-branch review is currently being carried out.
However, he could not rule out the need for voluntary redundancies in the future.
Staff costs account for about 40% of all costs. This is something Hernan said can’t be ignored.
The focus will not be on making savings on staff basic pay, but he said roster pay, overtime, lunchtime pay needs to be looked at.
Hernan said he wanted to safeguard basic pay and protect jobs, but costs are increasing at a faster rate than revenue growth.
Last year there was a loss in total reserves of €8-€9 million. He put the losses down to a number of factors such as an increase in insurance claims costs, fuel costs and upward pressures on pay.
Race to the bottom
AAA-PBP Mick Barry said the semi-state company is leading a race to the bottom in terms of workers’ rights.
Speaking about a bus driver he knows, Barry said once double time for Sunday shifts, overtime and meal allowances are cut this driver will lose out on €136 per week.
“That is about a €6,500 cut after having no rise in basic pay in eight years.”
He said the CEO’s sentiment that he wants to protect employee’s basic pay rings ” a bit hollow in terms of a €6,000 loss.”
Fianna Fáil’s Dara Calleary asked what severance pay the former boss, Mark Nolan, got upon leaving the job.
Hernan replied that the information was confidential.
Calleary pointed out that staff are being asked to “share the pain” and said that information should be available to them.
Expressway
Two weeks ago, the confidential report by Grant Thornton which was leaked to the media suggested the closure of the Expressway service would be necessary to address the company’s massive financial losses.
The Expressway service can not get State aid due to it being a commercial enterprise.
The Bus Eireann boss said today that Expressway “is and remains to be an integral part of our service”.
The government “cannot and will not” provide funding as it would be a breach of state aid rules, he said.
The committee was told the viability of routes must also be addressed and any changes to routes will be done in consultation with National Transport Agency.
“No passenger will be discommoded by any decision made,” said Hernan.
We must deliver a service that is value for money… We have to continue to provide a service that is value for money not just for the customer, but the taxpayer.
CEO of Irish Rural Link (a national network representing rural communities) Seamus Boland told the committee that rural transport is constantly being used as a “bargaining tool”.
“It’s the meat between the sandwich.”
Reading out a note from a 77-year-old woman living in County Clare, Boland said the bus service is vital to people living in the country. The note read:
“This is my only way of getting anywhere, without it I would just have to stay at home… It would be very lonesome.”
Free Travel Pass
The issue of the free travel pass to over-65s was also raised during today’s meeting.
Cork TD Jim Daly suggested this week that people who hold free travel passes should pay an annual €6 charge to fill the Bus Éireann deficit.
“There are 1.3 million free travel pass holders in the country, the shortfall at Bus Éireann is €6 million so if one million of those people paid €6 … that would wipe out the deficit,” said Daly.
However, today Hernan said he strongly disagrees.
He said the finances can only be fixed by addressing cost inefficiencies within the company as a whole.
Free travel did not cause our problems. We need a long-term solution and not a short fix.
Unions
Hernan called on the staff and unions to implement the company’s plan.
The longer discussions go on, the more precarious the financial situation becomes, he added.
“I am disappointed the unions declined an invitation to meet yesterday.”
He extended an invitation to the unions “as matter of urgency” to “engage in meaningful dialogue”.
Yesterday unions met with TDs and senators to discuss the looming crisis at Bus Éireann.
In a statement yesterday, Siptu said they attended meetings with politicians and the Labour Court to discuss the situation “following threats by management to implement massive cut backs at the public transport company”.
The Bus Eireann CEO, who said he has met with Transport Minister Shane Ross once on the matter, said he is ready to meet the unions “day or night”.
However, he said these changes need to be made “or else this company won’t be here this time next year”.
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