Iarnród Éireann ‘nearly insolvent’ due to losses

Train operator says financial position much more severe than that in Bus Éireann

Iarnród Éireann has forecast that further financial losses this year will leave the company just €2 million ahead of insolvency.

The State-owned rail operator has predicted that it will lose about €6 million this year, bringing its accumulated deficit to €159.2 million.

Iarnród Éireann told the Labour Court in a confidential submission drawn up at the end of May that its financial position was now “critical”.

It said its financial circumstances were “much more severe” than those in Bus Éireann, where staff went on strike for three weeks earlier this year as part of a dispute over management plans to address its cash crisis.

The rail operator told the Labour Court that if it were agree to pay increases being sought by staff, it would “effectively be trading recklessly”.

Iarnród Éireann forecast that it would record losses of just under €3 million for 2016 with a projected deficit of €6 million for this year.

It said this would leave shareholder funds in the company at a level of €41.1 million at the end of 2016.


“The shareholder funds within the organisation cannot go below €33.1 million, or we will be facing insolvency. The projected losses in 2017 will reduce that to €35.1 million and within approximately €2 million of insolvency. Indeed if we were to pay increases in such a perilous financial position we would effectively be trading recklessly.”

The company acknowledged that it had received increased exchequer funding in 2015, 2016 and 2017 but argued that this was “nowhere near enough” to address a funding shortfall which a recent rail review estimated was about €100 million a year.

Iarnród Éireann said the Government had consistently argued that any additional State funding provided to the company could not be used to finance pay rises, but must rather be invested in infrastructure and rolling stock.


The submission to the Labour Court also raised concerns about the pension schemes operated by the CIÉ group for staff in its three constituent companies, Iarnród Éireann, Bus Éireann and Dublin Bus.

It said improvements in financial markets last year meant funding proposals for the two pension schemes in the group were back on track.

However, it said the 3.75 per cent annual pay rise – which was reckonable for pension purposes – secured by staff in Dublin Bus after a strike last autumn had exacerbated the situation.

“The additional cost of these proposals have ensured that the funding proposal is again off track, giving serious future problems for the funding of our (pension) schemes. Any further pressure on our pension schemes will have a very serious impact on both schemes and repercussions for all employees within the CIÉ group.”

Unions at Iarnród Éireann had initially been seeking pay rises of up to 21 per cent over a number of years or, at a minimum, increases along the lines of the 3.75 per cent a year secured by staff at Dublin Bus.

Read other news on the city site of Dublin.

Labour courtbus Eireann Dublin Bus Iarnrod Eireann
If you notice an error, highlight the text you want and press Ctrl + Enter to report it to the editor
2 views in september
I recommend
No recommendations yet


Comments are designed to communicate and discuss the features of an enterprise or event, as well as to find out the interesting questions on it.

TWO national school teachers and an accountant have been spared jail for their part in a violent brawl in a well-known Dublin pub. Teachers Michael Davitt and Seamus O Cearra, as well as accountant Conor Shannon all walked free from court today after admitting violent disorder charges in the 10-man melee. A fourth accused, warehouse manager and soccer team captain Stephen Cantwell also avoided a prison sentence while a fifth, electrician David McSweeney wa...
Two people have been hospitalised with serious injuries and a man arrested on suspicion of drink-driving following a collision in Co Wexford. The two-car crash happened at The Leap in Clonroche at around 8.30pm yesterday evening. A man and woman, both in their 50s, were taken by ambulance to Wexford General Hospital. The driver of the second car, a man in his 50s, was arrested at the scene on suspicion of drink-driving. He has since been released from cust...
Long-standing plans to deliver hundreds of new homes on the site of the former Player Wills cigarette factory on Dublin's South Circular Road have come up against yet another obstacle. Documents lodged in the High Court showed the site's Nama-appointed receivers, Paul McCann and Stephen Tennant of Grant Thornton, are locked in legal proceedings in an effort to remove a company operating a salvage business from the site. The case relating to the tenancy rig...
Health Minister Simon Harris has been told his decision on whether to grant access to a revolutionary new drug for children with a rare degenerative condition is one of life or death. Families, friends, supporters and sufferers of spinal muscular atrophy (SMA) gathered outside the Dail yesterday to call for access to the drug Spinraza. The only drug ever manufactured to treat SMA, a degenerative neuromuscular disorder, it is licensed, available and changin...
Storm damage at the ploughing championships has forced organisers to cancel the second day of the event. More than 100,000 people had been scheduled to attend Ireland's largest annual outdoor event outside Tullamore, Co Offaly. However, two delayed openings were not enough to save the National Ploughing Association (NPA) event, after tents were badly damaged by the gusting winds. NPA assistant managing director Anna Marie McHugh said the organisers will no...
A dream holiday to Ireland turned to tragedy for a tourist who died after her caravan was blown into the sea as Storm Ali battered the country. The woman, named locally as Elvira Ferraii from Switzerland, had arrived in the Clifden area of Galway the day before the tragic incident. She rented a caravan and was staying at the Clifden Eco Beach camping and caravan site in the Claddaghduff area, along the Atlantic coastline. At around 7.45am yesterday the car...
Teachers Michael Davitt and Seamus O Cearra and accountant Conor Shannon all walked free from court yesterday after admitting violent disorder charges over the 10-man melee. A fourth accused, warehouse manager Stephen Cantwell, also avoided a prison term while a fifth, electrician David McSweeney, was jailed for six months. Passing sentence, Judge Brian O'Shea said the teachers were "ambassadors for their schools" whenever they went out and they had "let t...
ESB Networks says 39,000 homes, farms and businesses are still without power this morning after StormAli crossed the country yesterday. Repair crews workedthrough the night, but 1,600 individual faults remain on the network. It says it hopes to restore power to everyone affected today. ESB Networks Operations Manager Derek Hynes said most repairs are in the Cavan/Longford, Monaghan and Mayo areas. He saidcrews need to get to 1,600 locations today andwarned...
Minister for Children and Youth Affairs Katherine Zappone has said she hopes to bring a memo to Government "in the coming weeks"regarding the next steps to be taken at the site of the former Mother-and-Baby-Home in Tuam, CoGalway. Following a public consultation process earlier this year, a total of five different options are under consideration. These range from a full excavation of the burial ground, where "significant quantities of human remains"have be...