SOEs in Crisis: An Economic Analysis of Ireland's Public Transport SOEs

In recent years the state-owned rail company (Irish Rail) and the state-owned national bus company (Bus Éireann) have both come close to insolvency and their financial difficulties have received a lot of media attention. This... [ view full abstract ]

In recent years the state-owned rail company (Irish Rail) and the state-owned national bus company (Bus Éireann) have both come close to insolvency and their financial difficulties have received a lot of media attention. This paper therefore presents an in-depth analysis of the performance of Ireland’s main public transport SOEs. More specifically, the paper examines the performance of these enterprises in financial and economic (productivity) terms. It identifies the principal factors that have impacted productivity (over the period 2002-2016), namely the wider business cycle, capital investment, regulation and market competition. As the public discourse and principal policy responses have been driven by concerns about financial performance the paper also focuses on its main determinants. It pays special attention to the financial relationship between the companies and the government in relation to their public service obligations. It shows how reductions in the subvention payments to the companies in the post-recession period were major drivers of the losses they recorded.