Editor’s Note
As you might expect in an All-Island Strategic Rail Review produced by Arup for Eamon Ryan’s Department of Transport, a discussion of the merits of closing down Ireland’s rail network does not feature. Instead there is a focus on decarbonisation of transport systems, promoting sustainable connectivity, enhancing regional accessibility, and supporting balanced regional development. All very laudable, but who is going to pay for it?
To make rail more attractive, the review looks at investing in electrification, improving service frequencies and speeds, and rolling out new routes. Depending on the options selected from Arup’s menu, the blueprint might involve additional capital spend of €1.3bn per annum over a 25-year timeframe, as well as extra annual running costs of €600m p.a. In the 111-page review, how to involve private capital in this grand scheme is not discussed either.
Unlike England, railways are in total state ownership in Ireland, and the Irish Rail annual report evidences the downside of that policy. For 2022, Irish Rail had revenues of €224m and costs of €572m, with taxpayers filling the €348m gap.
In fact, the taxpayer subsidy to Iarnród Éireann last year was far greater. Along with the Public Service Obligation subsidy of €166m, the company P&L acknowledges €192m in other Exchequer funding. However, a further €464m in state funding is detailed in the balance sheet, for a grand total of €823m in state grants received. Take away the revenue figure and the net outlay for taxpayers in Irish Rail in 2022 was c.€600m.
Much of that balance sheet funding is for capital investment that will be amortised over several years, but other data points to inefficiency and underperformance. At €296m, Irish Rail’s payroll overhead is 1.8 times its passenger revenue, with 4,400 staff earning average annual pay of €61,400 and a further €6,900 in pension benefit. At 35.8 million, InterCity, Commuter and DART passenger journeys in 2022 were down 28% on pre-Covid 2019. It’s not because of the fares. The average fare across the three services was €4.32, and the annual report does not break out passenger numbers per service or the volume of concession fares. Contrast this outcome with First Rail, which handles about a quarter of the UK rail market and extracts an average passenger journey fare of €17.30 from its customers.
It was unfortunate that Fine Gael agreed to cede Eamon Ryan the Transport portfolio when the coalition government was formed. The Green Party leader’s focus is carbon, with apparently less attention paid to market discipline.