Luas operator blames pay hikes for increased losses

THE operator of Dublin’s Luas tram system said its earnings declined in 2019 because salaries at the company rose faster than the consumer price index.

Newly-filed accounts for Transdev Dublin Light Rail show that revenue hit €43.5m in 2019 compared to €38.7m in 2018.

But the increase was due to the inclusion of a new maintenance contract it secured towards the end of 2019. The maintenance of the Luas infrastructure had previously been undertaken by the Irish arm of French firm Alstom, which also manufactured the Luas carriages.

The Dublin Luas business made a loss of almost €2.6m before interest, tax, depreciation and amortisation during the year. That compared to a loss of just over €2m the previous year.

“The decrease is predominantly due to salaries increasing at a higher rate that CPI [Consumer Price Index] in 2019,” directors of the company noted.

“Salaries are paid in line with the Labour Court recommendations, whereas there was no growth in CPI during the year,” they added. “Costs also increased in line with increased revenue under the new operations and maintenance contract which started in December 2019, which includes the addition of maintenance and security staff.”

The company was awarded a new six-year operations and maintenance contract for the Luas at the end of 2019, with an option to extend the contract for an additional five years.

The capital’s Luas system carried 48.3 million passengers in 2019, compared to just over 41 million in 2018.

Passenger numbers on the Luas, Dart and Intercity services plunged by more than 60pc during March and August last year.

The new contract secured by Transdev in 2019 reflected expanded Luas network. In 2017, the €368m, 5.9km Luas Cross City extension opened, adding to the existing Green Line. It meant that for the first time since the Luas started operations in 2004, the Red and Green lines are connected.

There are plans to further extend the Luas network. A new line that would see the green line extended to Charlestown in Finglas from Broombridge is set to be constructed. The 4km extension is intended to have four new stops and bring an additional 30,000 people within 1km of the green line.

Capital’s Luas system carried 48.3 million passengers in 2019