Official Report: Minutes of Evidence

The Chairperson (Mr Martin): I welcome Chris, Ian and Ronan, who have come to give oral evidence. It is good to see you, gentlemen. Chris, is this the last roll of the dice for you?

Mr Chris Conway (Translink): This will be my last one, Chair, yes.

The Chairperson (Mr Martin): Have you bought your fishing rod or a set of golf clubs for the next stage?

Mr Conway: I have to wait and see what comes next.

The Chairperson (Mr Martin): OK. I was hoping to get something in Hansard about your future intentions, but you are not to be tempted. It is great to see you gentlemen here. Thank you for attending. You will be invited to make an opening statement — Chris, I will hand over to you shortly — and members will then ask questions. The floor is yours, Chris.

Mr Conway: Thank you, Chair. We submitted a short paper to the Committee, which I will take as having been read, so I will make a few briefs points and hand back for questions.

I want to set out some context. The paper that we submitted is about resource funding, which is what we are going to talk about. Capital funding is a different debate that we can have another time. Today is about resource funding. Members will be familiar with this, but I want to set out the context of the essential service that public transport provides to the people of Northern Ireland. We need to remember that 23% of households and 50% of people aged 16 to 24 do not have access to a car. Public transport is also an essential service for people with a disability, providing vital connections to health, education and jobs. We carry 50,000 pupils to and from school each day. Public transport is a key enabler for regional balance. Over and above that, there is a need for a modal shift to achieve climate targets, so it is very much an essential service.

For context, it is worth outlining how Translink and the Department for Infrastructure work together. Translink is the operator of the public transport network, and DFI is the transport authority and owner of the network. The relationship between Translink and DFI is part of a contractual agreement called a "public service agreement". The agreement outlines the network that Translink is required by DFI to deliver and how Translink should be compensated for the delivery of that network. Unfortunately, that agreement has not been funded by DFI over the past couple of years, and subsidy per passenger is well below other regions in the UK and in Ireland.

Translink has been trying to maintain the network in any case. We have been doing that through cost efficiencies. In the past couple of years, we delivered £20 million of cost efficiencies. We have an expertly delivered fuel-hedging project that will save the Government about £7 million on the basis of current prices. We have secured funding from other areas. We looked to the Shared Island Fund for funding, and we have worked with colleagues in the hospitality sector to get funding for late-night services. Unfortunately, we have had to utilise our reserves to maintain the network at current levels. We made a £23 million loss in the 2025-26 financial year, and we made a loss in the previous year as well. Using reserves to manage losses is not sustainable, and Translink has highlighted that at previous Committee evidence sessions.

The stark reality is that change is now required. We cannot continue on the current trajectory. The only way forward is for funding to be allocated as per the public service agreement, which is really for socially necessary services that cannot be funded in any other way, or for a reduction in the network. Early indications from the draft Budget are that the public service agreement will continue to be underfunded, and that is what gives us most concern.

Given that, Translink as an organisation, a company and a public corporation has a statutory duty to promote the success of the organisation. Therefore, we are obliged to start the process of service reductions and the removal of fare discounts, which are no longer affordable. The options are undergoing an equality screening process, and we will shortly launch an equality impact assessment consultation on that. I should stress, however, that they are targeted service reductions aimed at generating savings but minimising the impact on passengers and savings that can be achieved in the short term. Between the revenue benefits and the cost savings, we are targeting an additional £10 million of savings.

That is only the start of a process. As I said, Translink is the operator of the public transport network, while DFI is the transport authority and the owner of the network. Wider network changes will be required to address the funding shortfall. The future shape and size of the network will need further consultation.

I realise that that is disappointing and concerning news for many of our passengers. It is certainly not something that I wanted to bring to the Committee in my last six weeks in Translink. Over the past 10 years, I have championed the cause of public transport, so it is with much regret that we have to take those measures. However, they are proactive measures to protect Translink from a financially unsustainable position.

The Chairperson (Mr Martin): Thank you, Chris. I will start off with some general questions. There is a long list of members who want to ask questions.

Would it be fair to say, Chris, that you are essentially saying to the Department, "If you fund us at this level, we can simply deliver this"? Translink is probably not the only arm's-length body (ALB) or however you want to describe it of the Department that is saying to the Minister, "You are funding us at this level, so here is what we can deliver at that level. I am sure that you would like us to deliver this, but we cannot do that". Is that a fair summary of where Translink is?

Mr Conway: Yes, absolutely. At the current levels of funding, the network will have to change. We are taking proactive steps to carry out some service reductions, as I call them, rather than overall network change in order to protect Translink's financial sustainability. If the network is to continue at its current size, there will have to be additional funding. Most of the funding goes to socially necessary services, so it is about how that change will be made. To a certain extent, the past couple of years created something of a false sense of security, because we have used our reserves to keep the network whole while we got to this position. That cannot be sustained any further, however, so we are now in a position where a decision has to be made. It is critical that that decision be made as early as possible.

The Chairperson (Mr Martin): For how many years have you been running the reserves down? At some point, you had X reserves, and then they started to get smaller, if that is fair to say.

Mr Conway: Yes.

The Chairperson (Mr Martin): What is the time period for that?

Mr Conway: It has changed. Over the 10-year period, we ran reserves down and then they were re-established in 2021-22. We have been running them down again since then.

The Chairperson (Mr Martin): Over the past four or five years.

Mr Conway: Yes.

The Chairperson (Mr Martin): OK. I am looking at the figures. You are at a point now where you have cash reserves of some £10 million.

Mr Conway: That is correct.

The Chairperson (Mr Martin): Financial losses of about £27 million occurred last year.

Mr Conway: We will finish the year at a loss of about £23 million.

The Chairperson (Mr Martin): OK, £23 million. Essentially, that is unsustainable, if you just keep mapping.

Mr Conway: Yes.

The Chairperson (Mr Martin): Essentially, you are at a point now where you are saying to the Department, "You are not funding us properly through the public service obligation that you have".

Mr Conway: Yes.

The Chairperson (Mr Martin): You would like the Department to do that, but perhaps it is not. How does the conversation about service reductions work with the Department? You are the operating authority, and the Department is the owner. How is that working? Is the Department saying to you, "No, Chris, you cannot carry out any service reductions. We want you to maintain the service at this level". How is that happening?

Mr Conway: Under the public service agreement, Translink can make small adjustments to the network. That is what we are doing at the moment under the agreement where we can. Anything beyond that would have to be done with the Department's approval. The Department would need to consult on that and go through its own processes. All we are doing at the moment is what we can within our remit. Ultimately, however, we are saying that that will not be enough. That will help us to remain sustainable in the short term, but we need to consider how we can have a financially sustainable network in the medium term.

The Chairperson (Mr Martin): OK.

The Minister recently froze fares. That is something that the Minister can do; she can say, "Look, the fares have been frozen". What impact does the freezing of fares have? Some of your evidence, including the written evidence, seems to suggest that you are losing money, so freezing fares seems unusual. From a business perspective — from your side — what has been the impact of freezing fares?

Mr Conway: If the funding is not there, another way to protect the network is to generate revenue. As I said, we have been looking at options to do that. The biggest revenue opportunity is fares. To put things in context, we have had five fare freezes over the past nine years. Every time you freeze fares, it has an effect not just in that year; there is a cumulative effect in the following years. At a conservative estimate, those five fare freezes have cost us over £20 million of revenue. If you look at the gap that we have at the minute, you will see the accumulative effective of not having fare increases. That needs to be considered in any funding.

The Chairperson (Mr Martin): During the period that you have just illustrated, the cost of everything else has gone up in line with inflation.

Mr Conway: Yes.

The Chairperson (Mr Martin): That is all from me. I will ask you a blindsided question at the end about community transport. One of your staff will have to start thinking about community transport, so I thought that I would let you know about that.

Mr Stewart: Gents, thanks so much for coming along today. I again thank your PR team and all your staff for everything that they do and for your ongoing engagement. It is really useful, particularly when it comes to keeping us, as elected reps, up to date. We appreciate it.

The Chair covered a couple of the issues that I wanted to focus on. The first is the reserves. From a raw accounting point of view, is it fair to say that the Department has been using your reserves to fund you?

Mr Conway: It depends on how you phrase it, John. Translink's reserves have been used to maintain the sustainability of the network in the hope that the funding issues would be resolved. However, given that that has not happened, we now have to act as directors of the company to make sure that we maintain the financial sustainability of Translink. That will have an impact on the network that we can deliver.

Mr Stewart: Going from £60 million in 2022 to £10 million last year was pretty perilous and close to the wire. We are already into dangerous financial territory in that respect, so how much more, if anything, can be absorbed by eating into the financial reserves before we are in real financial peril?

Mr Conway: The plans that we have outlined today are to make sure that we maintain Translink's financial sustainability in the short to medium term. That gives us room to decide on the shape of the network so that Translink and the network can get into a financially sustainable position. That is what we are doing at the minute. We, as directors of the company, are acting responsibly, but we now need to work with the Department to get the network into a responsible position.

Mr Stewart: Your level of funding to date has been shocking. You have been asked to do more every year with less. I commend you for the £20 million of efficiency savings and the fuel-hedging programme, on which I have commented previously. Others, whether Departments or arm's-length bodies, could certainly learn from that to make efficiency savings, but there is only so much that you can do.

Mr Conway: To put it in context, John, while we grew our passenger numbers last year by over 4%, we reduced our headcount by over 1%. We are increasingly putting in place efficiency measures, but we continue to drive passenger growth.

Mr Stewart: Concessionary fares are promoted by the Minister, who says how welcome they are. However, you receive no additional funds when the number of people receiving concessionary fares goes up, so the pressure continues to mount on you while others take the plaudits for providing more free or discounted transport. Can you quantify how that impacts on Translink annually?

Mr Conway: Our funding stays relatively flat. It is primarily made up of the concessionary fares budget and the public service obligation. Every year, the concessionary fares budget goes up, and, if the overall funding stays flat, it means that the public service obligation funding comes down. It is a bit of a dichotomy because, on the one hand, we have the concessionary fares budget, but, on the other hand, we will potentially deliver a smaller network. It is about trying to get the balance right between those two things.

The challenge will be that we have an ageing population, so the concessionary fares budget will increase. If the expectation is that the funding stays flat, it will put the network costs under more pressure.

Mr Stewart: It is deeply troubling. If people who are tuned in, as well as the media, pick up on that fact, they should be deeply concerned about the trajectory that Translink is on with its provision of public transport. It is deeply worrying. Can you talk through the potential service losses or impacts on the services that we may see from having to make efficiency savings? You also talked about the equality screening that is going on for reduced fares. What services and schemes are likely to be impacted?

Mr Conway: We are not in a position to go into detail at the minute, but we are looking at Ulsterbus, Metro and NIR for opportunities where we could look at reducing services where there may be alternatives already in place and where they are more likely to be used. We are looking for opportunities to get cost savings from that. They are not wide-scale savings; they will be targeted in a way to try to minimise the impact on passengers. We are also looking at later evening services, particularly in the Monday to Wednesday time frame, which tend to be more lightly used. We are looking at those things. We are still going through the process. We have not made a final decision on those before we start the consultation.

On the revenue side, while fares are pretty much regulated and that is for the Department to decide on, there are a number of discounts that Translink puts in place. For example, we have a yLink discount for young people, and we have a family discount for families travelling at weekends. There is also a discount on the railway after 9.30 am. We are looking at all those discounts to see whether we could remove them or cut them back. That is not something that Translink wants to do, but, if our budget means that they are no longer affordable, it is something that we have to consider.

Mr Stewart: I have one last question, if I may. To dive into the capital spends, I am keen to tease out, on the current funding trajectory that we see, how likely are we to see progress on aspects of the all-island rail review, electrification of the lines and upgrade and essential maintenance of the network? Is the money there to do what you need to do daily and to plan for the future and make sure that Translink goes in the right direction?

Mr Conway: We are still in discussions on the capital budget, as we have not yet finalised it. In our capital budget, we always try to allocate the key element of the capital budget to the essential parts of the network: the renewal of the network where it needs to be done, maintaining the service and maintaining our fleet.

We also try to keep a small percentage to keep the longer strategic projects going, even if it is only a small amount of work, to continue feasibility work, such as on the all-island strategic rail review and electrification. We would like to try to keep a small amount of our capital budget to keep those projects going because that is about an investment for future generations, and we do not want to cut that off. However, it will all depend on how the capital budget is finally allocated, and that is not clear yet.

Mr Stewart: Where are we with regard to the purchase of new trains and buses, which are vital?

Mr Conway: We have an ageing bus fleet. We are working through the final approvals with the Department for the next phase of bus procurement. We hope to get that under way this year. As for the capital budget on the fleet side, as you know, we made an announcement on the Enterprise fleet. That is a joint project between us, the Department of Transport in the South and the EU. We need to look at our next fleet of trains in the next 10 years, and we are starting to do some early work on that as well.

Mr Stewart: That is all for now.

Chris, I wish you all the best. We will probably not see you again before the Committee, unless something goes drastically wrong in the next six weeks. I wish you all the best.

Mr Conway: Thank you.

Mr Dunne: Thank you, gentlemen, for your presentation. I echo those words to wish you well, Chris, on your next journey, as the term goes.

I thank you all for your ongoing assistance in correspondence. We appreciate the challenges from the recent storm damage in the past few winters. I know that that has taken its toll on your network, particularly your rail network. We appreciate the significant challenges that you face.

Chris, you mentioned the £20 million of cost efficiencies. Can you outline some of those beyond fuel hedging? I presume that that is within the figure of £20 million.

Mr Conway: Ronan, do you want to answer that?

Mr Ronan O'Doherty (Translink): There are two aspects to the £20 million. There is what we have delivered over the past couple of years when our funding has been reducing in real terms, as we mentioned. John, you mentioned the concessionary fare scheme, which is a pressure in there. Over the past couple of years, to be honest, everything has been on the table. We have looked at discretionary costs. We have ramped down advertising and promotion where we can. We have looked at overall infrastructure and fleet maintenance regimes to see whether we can stretch those out slightly, obviously while continuing to run a safe service. We have considered whether there is anything that we can do there.

On the fuel mix, as we move to a climate-positive strategy, as the Committee will know, we have been investing in zero-emission buses. We have quite a number of battery electric vehicles now, which are cheaper to run than diesel buses. That has been helpful as we continue to invest in those. We also have a small number of hydrogen buses. We are looking at the mixes to see what we can do with those.

Chris mentioned the headcount. It is, unfortunately, something that we have to look at closely. We have not had a recruitment freeze because we are aware of the need to make sure that front-line operations are still protected, but we have had a headcount freeze. It is worth mentioning, as Chris did, that we have reduced by 1% over the past year. That is in a year in which we have carried an extra three million passengers. It is also in a year in which, for the first time for a full 12 months, we were running the hourly Enterprise service. That service came in towards the end of the previous year, so, again, there was pressure on operational staff to deliver that. Those are actions that have been taken.

Chris has mentioned the revenue opportunities that we are looking to within our 3% remit that we control. We have talked to all the operational units about some small percentage efficiencies that we want them to target this year. Some have been delivered, and some will be worked through. The other £7 million, Stephen, is from our fuel-hedging programme. That has been successful for us. We have had it in place for a number of years. The number can change, but, as of today, other future fuel hedges, on the basis of current market prices, will deliver us over £7 million of savings as opposed to buying it at market prices. We are pleased with that, and that is important when we are trying to protect the public purse.

Mr Conway: I will give an example of something that we did with a heavy heart but which we did, given the cost pressures that we were under. We did not recruit any apprentices last year. Recruiting apprentices is an investment in the future. This year, we are looking again at that to see whether we can bring in some apprentices, because not bringing in apprentices has a big impact on the future. That is one of the difficult decisions that we have had to take.

Mr Dunne: The reserve situation is alarming, as is the potential impact on services. I am keen to establish your level of engagement with the Infrastructure Minister on the challenges and the scale of the emergency that you are in. Does she recognise the scale of the challenges? Can you outline the level of engagement over the past year?

Mr Conway: We have good engagement with the Department. We have probably been discussing this, as well as the need for urgent action, with the Department for about six months now. As everyone in the room knows, there is no Budget agreed at the Executive, so no budget is agreed for the Department. We do not have a budget allocated to us yet. Therefore, we have not been able to get any clarity on how things are. Because we are at this critical point, Translink has to take some decisions into its own hands and move forward. We have to act responsibly for the financial sustainability of the organisation. It is unfortunate that we are in that position, but that is where we are at this point, Stephen.

Mr Dunne: On the capital aspect, I turn to the feasibility study on the Belfast City Airport rail link, which I have mentioned before. I know that quite a bit of work has been done on the airport's master plan, and I know that you are involved in that. Is there any update on where we are on that since we last spoke?

Mr Conway: We did some early feasibility work to input into the master plan for Belfast City Airport, and we continue to have those conversations. I know that Belfast City Airport is pushing ahead to seek planning and wants to roll that scheme out. We will continue to engage with the airport on that. There is no further work other than looking at how we will get it to the next stage. However, that would require funding, and a conversation will have to be had about the funding required for that.

Mr Dunne: OK. This is my final question. Where are we with the total cost of Grand Central station? It was previously estimated at £340 million: is that figure still correct?

Mr Conway: The plan is to come in on budget for Grand Central station.

Mr Dunne: What level of works remain?

Mr Conway: It is mostly the public realm works. The station itself is finished, and we hope to have the public realm works largely complete by the end of June, ahead of the summer events and everything else. There will be some small works to finish it after the summer. We took on quite a big commitment around the amount of public realm works that we agreed to do as part of the planning, so that is why it has taken longer; we needed to extend that. Quite a lot of approvals are needed from DFI, but it is progressing well.

Mr Dunne: OK. Thank you, gentlemen.

Mr McReynolds: Thank you, guys, for coming in today. A number of my questions have been asked, so forgive me if I take you on a meandering journey. What funding will be needed to remove a lot of the risk that we are hearing about today?

Mr Conway: As we say, we made a loss in the last financial year of around £23 million. If you include inflationary pressures, cost pressures and the lack of a fare increase, that would take us to around a £30 million impact this year.

Mr McReynolds: Has that been communicated to the Department?

Mr Conway: Yes.

Mr McReynolds: OK. You mentioned, Chris, that change will be needed on the network. What will the potential impacts on passengers be? It is just so the public are aware of what could be coming.

Mr Conway: To be honest, it is hard for me to answer that at this point, Peter, because we need to get into a much wider discussion on how we change the network. As I said, the public service obligation funding is mostly for socially necessary services. The fare box does not cover the cost. About 50% of the public service obligation funding goes into the railway, and the other 50% goes into the bus network. Both of those have to be considered, but that is a much bigger conversation.

Mr McReynolds: You said that a fare discount is being looked at and that it will be targeted. Can you elaborate on whom that will be targeted at?

Mr Conway: The service reductions will be more targeted, but we are looking across the board at where we put discounts and whether those discounts will be affordable. I have mentioned the obvious ones. The yLink is an obvious one; it offers a 50% discount at the minute. We offer a discount on the railway after 9.30 am, and there are family-friendly discounts at weekends. There are a few other smaller discounts for smart cards and other discounts as well. Those discounts tend to work well in encouraging people to use public transport and tend to target groups of people who are in most need of support, such as families and young people, for example. It is just not affordable for Translink to take on that responsibility on its own, and, if the funding is not there, we have to address that.

Mr McReynolds: If you are targeting young people and they are disincentivised from using public transport from a young age, you are potentially discouraging them from using public transport later in life.

Mr Conway: We are not targeting young people —

Mr McReynolds: Of course.

Mr Conway: — but that discount is to encourage young people to use public transport. Given our funding levels, it is no longer affordable for Translink as a company. We have to look at what is affordable going forward.

Mr McReynolds: You mentioned late-night services. Do we know how that is potentially looking?

Mr Conway: Do you mean the additional ones that were funded for over the weekend?

Mr McReynolds: Yes.

Mr Conway: They are still going well. We had a big number in the run-up to Christmas, and we will have a big increase as we go into the summer. Over the winter, it is still trending well. We are seeing an increase, on purely the funded element, of about 20,000 passenger journeys. There is still a positive indication on those.

Mr McReynolds: By Christmas 2026, will we have late-night services? I think that there is a pilot.

Mr Conway: Yes, the pilot finishes at the end of December.

Mr McReynolds: This is a query that came in over the weekend. I was sent images of Grand Central station and nicotine patches being advertised. Was that decision made by Translink? Was it put out to somebody to find advertisers? How did that come about?

Mr Conway: Finding advertising opportunities is normally contracted out. So long as they meet advertising guidelines, we are obliged to work with whomever comes forward.

Mr McReynolds: Lastly, over the weekend, the Red Bull soapbox derby took place on the Stormont estate. I have been taking a lot of queries and complaints about it. How does Translink feel it was organised operationally outside the Stormont estate?

Mr Ian Campbell (Translink): Like all events. Between now and the end of September, we will be dealing with over 140 events and concerts across Northern Ireland. The soapbox derby was a big event. We had engaged with the event organisers and other agencies on it. We deployed significant additional resource: we doubled the number of Gliders, for example, and put extra staff in Dundonald, Donegall Place and along the route to assist customers with wayfinding and ticket purchases.

It is fair to say that the traffic congestion caused us major operational difficulties. Illegal parking and lack of access to the bus lane on the Upper Newtownards Road meant that the Gliders were part of the traffic, so we could not move people as quickly as we would have wished. Lessons have been learned. We are engaging with the event organisers and other agencies to see how we could do things better if there is another event at Stormont.

Mr McReynolds: How frequently did you meet the organiser, Red Bull?

Mr Campbell: Regularly, in the run-up to the event.

Mr McReynolds: Was it monthly or weekly? How far out are we talking about?

Mr Campbell: There were certainly meetings in the final two weeks in the run-up to the event.

Mr Conway: The important thing in these events, Peter, is that all of the statutory bodies work together, but there always needs to be one to take the lead. The council is taking the lead for the fleadh, for example, and will bring in all of the other bodies such as the PSNI, us and DFI Roads to look at what needs to be done overall. That works well in some events, but, for some, it is not as well joined up. This one was not as well joined up.

Mr McReynolds: Did Red Bull take the lead?

Mr Conway: It is the promoter and event organiser, but usually a statutory body takes the lead, be that the council, the PSNI or some other agency. We need to look at —.

Mr McReynolds: Was the statutory lead organisation

or DFI?

Mr Conway: We need to look at the lessons learned to see who took the lead and how we can better organise such events. It is about all things coming together: the roads bit, the public transport bit and the security bit need to come together and be joined up as one plan. There is a lot of detailed planning going on around the Fleadh Cheoil, for example. We need to learn from the smaller events, but experiences in those can be significant.

The Chairperson (Mr Martin): Which statutory agency was the lead on the Red Bull event?

Mr Campbell: We engaged directly with the event organisers, and colleagues including the PSNI, DFI Roads and other agencies were directly involved. We engaged with the event organisers directly.

Mr McHugh: Fáilte romhaibh uilig. Bhuail mé leat, a Chris, i nDoire, tá naoi mbliana ó shin.

I was the mayor at that time, and you were launching the red bus fleet.

Mr Conway: Yes, that is right.

Mr McHugh: I have a number of issues, but lots have been covered already this morning. We all know that all Departments are underfunded, as is Translink. We also know that, as you say, covering your losses out of reserves is not sustainable. Translink has objectives and priorities. Would a rise in fares help? I ask that question, hoping that you have some understanding of the elasticity in relation to the rise in fares in different areas and so on. Would that make a major impact or a minor impact on your dilemma?

Mr Conway: Fares have to be part of the equation. Revenue from fares has an impact on the subsidy that is required, so the two conversations must be had in parallel. As I said, forgoing five fare increases in the past nine years has meant a loss of revenue of about £20 million at a conservative estimate. If the funding is there, there is no issue. We all want to keep fares low to encourage people to use public transport, but, if the funding is not there, that has to be part of the equation. My view is that the public and travelling passengers understand that a small annual fare increase on the basis of inflation could be managed rather than our considering cuts in services. It is about small annual increases, rather than big fare increases, because the cumulative effect will have a benefit. It is definitely part of the equation.

Mr McHugh: You would agree that the greater part of Translink's income comes from urban areas, yet you have an obligation to provide a service in rural areas. I live in one of the most rural areas — west Tyrone — and I know from listening to people that they are reluctant to use the bus. They find it too expensive to go to Omagh unless they pay a concessionary fare, in which case they will travel that way. Omagh Hospital is the only hospital that many of them can attend, for example, and we continually hear that comment. To what extent can Translink meet its obligations to rural communities without putting up fares?

Mr Conway: The only way of achieving that is through funding. The total cost of delivering the network is pretty straightforward and easy to calculate — a bus, a driver, the fuel and the associated overhead — and the two ways of funding that are through the fare box and public service obligation funding. That equation has to be addressed in order to make the overall network work. I appreciate that, if the funding is not there, fares alone cannot solve the issue, but you then get into the question of how much of the network you can provide.

Mr McHugh: Are rural communities under threat?

Mr Conway: I am not putting rural communities under threat; I am asking that we make sure that we deliver the public service obligation funding that is needed to deliver the right level of service. The network is owned by the Department, so that is a decision for the Department.

Mr McHugh: Thank you. Go raibh maith agat

, Chair.

The Deputy Chairperson (Mr Stewart): Harry. Sorry: I forgot that I was in the Chair. [Laughter.]

Mr Harvey: OK, Deputy Chair; I appreciate it.

It is good to see you. I will start with fuel hedging and cost efficiency. Some £7 million was saved last year. What is the duration of Translink's current hedge period for fuel?

Mr O'Doherty: I can cover that one. We aspire to have 90% of our diesel requirements hedged as we go into the following financial year, and we build that up during the year. This year, we are at only 80%, because the conflict in the Middle East arose as we approached the year end, and it did not make sense — that was the professional advice — to hedge at volatile prices. For the year following this one, Harry, we have 80% hedged. We have a lesser amount hedged for each of the next two years, but we will build the amounts as we get closer to those financial years.

Mr Harvey: Very good.

Are the newer vehicles more efficient? Do you find hydrogen and electric vehicles cheaper to run?

Mr Campbell: On the basis of the figures, that is clear. As Ronan said, we run a small number of hydrogen buses. The largest part of our bus and rail fleet is still diesel, but we now have 250 battery electric buses on the road that are cheaper to operate and to maintain. We see that as the way forward, and it is, of course, very much part of our climate action.

Mr Harvey: That is another question. Are they cheaper to maintain and service and more reliable?

Mr Campbell: Absolutely.

Mr Harvey: What about the cost to purchase them?

Mr Campbell: They are more expensive.

Mr Harvey: They are more expensive.

Mr Campbell: That is factored into the overall business case. The other factor is that you need to put the infrastructure in. That is a key element of the roll-out of battery electric vehicles, as we have to put in charging hubs.

Mr Harvey: Are they more suitable for towns and cities rather than —.

Mr Campbell: No. Currently, for example, services in Coleraine and Craigavon operate battery electric buses. All Foyle Metro buses in the north-west are battery electric, and about half of the services in Belfast are now operated by zero-emission buses.

Mr Harvey: Very good. You also mentioned a 4% increase in passengers: will that go up more? Is there an upward trend?

Mr Conway: Certainly, given fuel prices, we see some early indications of an increase that is slightly higher than 4% for the first couple of periods of this year. Obviously, that will benefit the business overall. We hope to continue to drive passenger numbers up.

Mr Harvey: Is that increase happening in rural or urban areas, or is it spread out?

Mr Conway: It is a mixture, but it is happening more in urban than rural areas.

Mr Harvey: OK. Thank you, Deputy Chair.

Mr Stewart: It will be the Chair now, because he is back.

The Chairperson (Mr Martin): Surprise!

Mr Stewart: I was useless.

The Chairperson (Mr Martin): Members are blessed when you are here, John.

Before I go to Justin, I note that Harry mentioned the zero-emission buses. Have you procured new buses? Sorry, I might have missed the start of that question. Where are you in the procurement process for the zero-emission buses?

Mr Conway: We are finalising with the Department the business case for our next tranche of procurement of zero-emission buses. We call them zero-emission buses, but it is our normal bus replacement programme. Some buses in our fleet are 15 to 18 years old. That drives higher maintenance costs and creates some issues for us to do with reliability. We hope to get the next bus replacement procurement under way in the next month. They will largely be battery electric vehicles.

The Chairperson (Mr Martin): Fine. You mentioned that you are finalising the business case with the Department: Chris, what stage is that procurement process at? Have you identified a supplier, or are you finishing off aspects of the business case with DFI?

Mr Conway: We have a framework set up for bus procurement. That can be implemented straight away. We are at letter-of-offer stage on the business case with the Department.

The Chairperson (Mr Martin): Brilliant.

I will bring in a virtual Justin.

Mr McNulty: Thank you, Chris and all the folk from Translink. Chris, I saw you last week in happy times at the wonderful Belfast Grand Central station. The structure is amazing, and it is a world-class transport hub, so it is hugely positive. It is also hugely positive that we now have the hourly Enterprise train between Dublin and Belfast. As you know, I have campaigned for that for a long time and been the bane of your life for a long time, but credit where credit is due.

I turn to the announcement on the purchase of eight new train sets. My question is not specifically related to finances initially, but there is a major capacity issue and a major bottleneck in the pathways for trains to get into Connolly station during peak hours. Trains leave Belfast and get to Balbriggan but cannot get into Connolly because of major delays. That slows down the journey. Will the new train sets address capacity, so that people can get on the train at Connolly and Belfast at peak hours without too much concern about pre-booking and in the knowledge that there is enough capacity on the trains? Will the train sets facilitate more capacity?

Mr Conway: The train sets will facilitate more capacity, but part of the project includes infrastructure work. Some infrastructure work is planned for the line between Belfast and Dublin, including two passing loops: one at Skerries and one at —

Mr Campbell: Mosney.

Mr Conway: — Mosney. It is not a complete solution, but it will enable better frequency for the timetables and better reliability when it comes to getting into Connolly.

When there are capacity issues, the key is for every train to turn up exactly on time — to the second — so that all trains can be scheduled on the timetable. It about making sure that there is reliability in the infrastructure. Infrastructure works are planned as part of that project that will improve reliability. Irish Rail will look at a wider programme to increase the coverage and track going into Dublin. In the interim, however, some works will help with the reliability of trains going into Dublin, and the fleet itself will create additional capacity.

Mr McNulty: People in Lurgan are annoyed by the increased frequency of traffic backlogs caused by the rail crossing being down for a significant period for every train. To alleviate traffic backlogs in Lurgan, could that time be reduced without compromising safety? Has that been explored?

Mr Conway: A signalling proposal that is to be implemented at Lurgan will certainly improve the barrier downtime at Lurgan station. That capital project is already under way, Justin. I do not know when that will be implemented, but it is a project that we are working on.

Mr McNulty: Good news.

Given your current financial challenges, public service obligations and the funding that you receive from the Government, what are the specific requirements to place Translink's finances on a more sustainable footing so that longer-term impacts do not increase?

Mr Conway: The public service obligation funding is key in the public service agreement. The agreement sets out clearly what the network is, how costs are worked out and how funding is allocated. As Maolíosa said, there is a cross-subsidy element to that as well: it is done on a total network basis, not on a route-by-route basis. Therefore, profitable Translink routes cross-subsidise unprofitable routes or socially necessary routes that require additional funding.

We have been working with the Department for the past couple of years to get the public service obligation funding to the right level — a sustainable level going forward. We have now got to the point where the utilisation of reserves cannot sustain that, and we need to agree funding that is appropriate or look again at the network and get to a network level that is required. As I said, the subsidy that Translink receives to run the network in Northern Ireland is significantly below the subsidy per head in other UK regions and in the South.

Mr McNulty: Yes, there is a big issue there. Obviously, a £27 million loss last year and an estimated loss of £23 million this year are adding to your constrained financial position. The worry is that the equality impact assessment, with service reductions maybe being necessary, is a red flag for all of us, in that people furthest from the central areas will feel the most impact.

Mr Conway: Yes, and, just for clarity, we are saying, on the basis of where we see funding, that service reductions will be necessary, and, because we see no other way, we will start the consultation with that. We have to act responsibly as a company, and that is the only responsible way that we can see, given that we are already placing significant focus on efficiencies and cost reductions.

Mr McNulty: My point is that people who are most peripheral — those who are on the outskirts of the network and are most disconnected now — will, if that is the direction of travel, become even more disconnected

Mr Conway: That is a fair comment.

Mr McNulty: Thank you, Chris.

Ms Ennis: Thanks to Ronan, Chris and Ian for being here.

Chris, your last response to Justin highlights in stark terms the major underfunding of public services here by the British Government, and it is not just Translink. Other ALBs are feeling the effect of that, as are Departments. Significant historical underfunding coupled with uncertainty in agreeing a Budget have brought you to the position that you are in. I am not unsympathetic to that in the least.

I have a concern. I agree that the responsible thing to do is to look ahead and plan as best you can. Talking about cutting or restricting services without having the full picture could lead to some public concern, but I accept that you have to plan ahead. Surely the objective of Translink and the Minister is to encourage more people to use public transport. If we are cutting services and not putting a cap on fares, we are passing the responsibility for underfunding on to the public, which is not encouraging them to use public transport. Hopefully, down the line, we will be in a better budgetary position, but those people will not come back to using public transport. They will say, "It was not available to me. I have made other arrangements". They are not likely to return to public transport. It is a bit short-sighted to cut services and not consider concessions or caps on fares, because that is the only way that we will encourage people to use public transport.

Mention was made of major investment by the Department. When it came to investment in the rail network and trains, the majority of the funding was put in by the Irish Government . When it comes to resource funding for Translink, would you like the Minister to do that? Would you welcome further discussions with the Irish Government and the Shared Island Fund in order to pull in some more resource funding that would help with the dire budgetary position of our public services, including Translink? Would you like the Minister to explore that further with the Irish Government and Transport Ireland?

Mr Conway: I will touch on your first point first, Sinéad. I have been chief executive of Translink for over 10 years. When you cut me open, it says "public transport" in the middle. I have worked tirelessly to encourage people to use public transport and to encourage support for public transport across Northern Ireland. It is also a cross-cutting service: it delivers connectivity for health, education and the economy. All those areas are impacted on by what happens in public transport. It is with a heavy heart that we have to make those decisions. It is not without months and months of discussion with the Department about how funding can be addressed in a different way, the savings that we have already brought to the table and the creativity and innovation that we have applied to funding and cost efficiency. It is not a position that we want to be in.

The Northern Ireland Audit Office's 2014 report clearly stated that great progress had been made in public transport but it was still relatively underfunded compared with roads and other parts of the transport infrastructure. Even with the great strides that we have made in public transport over the past 10 years, we are still in a position where public transport is not funded to the same level as other parts of the transport infrastructure. There is certainly no short-sightedness on Translink's part when it comes to what we want to do. We are now at the point of being in dire need of keeping the company in the position that it needs to be in so that we can continue to operate a network of any sort. That is why we are in the condition that we are in.

We have been looking at innovative ways to fund the company, particularly when it comes to the Shared Island Fund. Translink has been active in a number of areas in order to pursue funding. We have been active in the Shared Island Fund for the Enterprise service. We continue to have discussions about cross-border services that could utilise Shared Island funding. We have also engaged heavily with Westminster on Union connectivity, for example, and we secured significant funding for that; in fact, most of the feasibility studies for the all-island strategic rail review projects were done through the Union connectivity project. You can try to square that one off, but that is what happened. [Laughter.]

The Chairperson (Mr Martin): Very good.

Mr Conway: We will go anywhere for additional funding. We have been active in working with the hospitality sector on late-night services. Also, in some areas where new developments have been coming up, in the north-west and around Belfast, we have looked for developer contributions to get additional funding to pilot services. We will continue to do that and are open to any suggestions that anyone has for getting additional funding from other routes. We have just come to the position where it is not sustainable to continue in the current format.

Ms Ennis: Do you agree that, in a cost-of-living crisis, the cost of making efficiency savings should not be passed on to passengers and the public, given the current situation?

Mr Conway: That is a political call. The policy has to be that the services are funded to a level such that costs are not passed on to the public. If those services are not funded, it is difficult to decide who pays for them. There is no free public transport, so who pays for it is a political decision, really.

Ms Ennis: Thank you.

Mr McMurray: Thank you, Chris, Ian and Ronan. It is good to see you back, Chris. I was thinking of maybe a bike as well as golf clubs. [Laughter.]

Mr Conway: Actually, I have a bike. [Laughter.]

Mr McMurray: N+1 applies to bikes: you always need one more.

It definitely seems like a Gordian knot when it comes to fuel prices, fares, funding and all the rest of it. A lot of my queries have been covered.

We have been on a trajectory when it comes to reserves and the resource generally, if that makes sense, but there is no sense of timelines for implementation in the letter. What are the timelines, or is it a case of "Negotiations with the Department are to be continued"? When do the reserves reach such a critical point that you say, "That is it: we have to implement" or suchlike?

Mr Conway: We are at that point now. As for timelines, I would be approximating. I do not want to prejudge an equality screening process, but there will probably be alternatives to some of the service reductions that come through to equality screening, and we can implement those. Typically, we would probably plan to implement some of those in July as part of our usual change to a summer timetable. For other services, equality screening will dictate that they have to go through a consultation process, which will be somewhere between eight and 12 weeks. Typically, we would try to start that in June and have it completed by August for implementation in September. Those are the time frames that we are working to at the minute.

Mr McMurray: Maolíosa, who is a proper economist, touched on price elasticity. I had seen that mentioned before, and then Maolíosa mentioned it. It seems that we have increasing numbers yet diminishing returns. You want to have increasing numbers and increasing returns. First, how do we get there; and, secondly, where are those numbers? As Ms Ennis knows, I live in Castlewellan, which is on one side of the constituency. The office is in Downpatrick. If I want to get from Downpatrick to Warrenpoint by bus, it is, quite literally, a three-hour camel trek.

Mr Conway: If you used your bike and the bus, you could —.

Mr McMurray: If I used my bike and the bus, it would probably be quicker. Using my bike all the way would be quicker, to be honest; it would take less than three hours. Well, it would have, but perhaps not at the minute; I am a bit out of shape.

Mr Conway: Growth in passenger numbers helps us with revenue. It works into our revenue, so that is all budgeted within our revenue. However, given the size of the network that we operate and the size of the rural part of the network, it will always need a level of subsidy, as do most public transport networks around the world. We deliver to a large rural community, and the railway network always requires a level of subsidy because we are running a big infrastructure as well as the trains.

The passenger numbers help that, and —.

Mr O'Doherty: I will chip in there, Chris. I think that this is a good reflection of what our agreement has been historically: two years ago, DFI resource funding represented about 50% of our revenue base. In the past two years, that has fallen to around 45%, so we have seen significant real-term reductions in the available resource funding. We are pleased with our passenger growth and are doing the right things, but, ultimately, that reduction in funding has meant that our losses are increasing, which has created the situation that we are in.

Mr McMurray: So, again, the Department for Infrastructure is receiving the largest budget that it has received in its history, but it has decreased the resource funds that enable it to —.

Mr O'Doherty: When it comes to the cost of operating the concessionary fares scheme, Andrew — we talked about some of this earlier — we have seen no inflationary uplifts in our baseline funding in real terms. Then the National Insurance legislation and other things came in. Those are all pressures on our business.

Mr Conway: I will touch on the point about elasticity. There is elasticity in fares and passenger numbers. If that is done on a small inflationary basis each year, the elasticity is quite small, and, because of what we need to do, people are understanding of that. It is the creation of big gaps that creates an issue for us with revenue. If you do not increase a fare in one year, that will impact on every year in perpetuity. It may have an impact of £4 million or £5 million that year, but it also has an impact on the next year and the next year and the year after that. That is where problems start to crawl in, creating a long-term sustainability issue.

Mr McMurray: There is a fella across the water on the big island — ar an oileán mhór — called Mr Burnham. He has made a great play about transport and what have you in Manchester. How could we get to that position, which is obviously such a success? There is a template there, dare I say it?

What spending goes into the public transport network in England comparatively? You referenced the fact that we have received the biggest Infrastructure budget but resource funding has been reduced from 50% to 45%: is that comparable with across the water? Is it a time when the comparable budget is hamstrung over there?

Mr Conway: A significant subsidy goes in there over and above the budget. As we have said, the subsidy per passenger in Northern Ireland is much lower than in any other region in the UK. There are subsidies going into a lot of those benefits.

Mr McMurray: It is a policy choice, I presume.

Mr Conway: It is a policy choice.

Mr McMurray: OK. Did I have anything else to ask? I am not sure that I did, Chair; I have run out of questions. The best irony klaxon was when we heard that Union connectivity funding was going into the all-island rail projects. I enjoyed that [Laughter.]

The Chairperson (Mr Martin): Indeed, Union connectivity funding gets everywhere.

I have one more question in light of the point that Sinéad raised around funding. Nobody wants to see higher fares, but I suppose that the difficulty for you gentlemen is trying to get the books to nearly balance. I have a couple of questions to finish off the session, the first of which picks up on the point that Sinéad made about funding. She asked how, if the Department is not given enough funding, it can fund all the things that it needs to. I am not saying that the Department does not have a range of things, including its ALBs, that are crying out for funding, but I found a quote from Caoimhe Archibald from last year when she was the Finance Minister, before being moved by the shuffle. I will quote her directly. She said that the DFI resource budget, which is the budget that you have a bit of claim on, was:

with funding going up 13% from the previous Budget, an enviable position in the view of some other Departments. She also stated that its capital budget was:

I am not asking you to comment on that; I am just making the observation that it is about where the priorities are, and it is a political decision for the Minister where she allocates funding. It is just worth highlighting the fact that, in the words of the Minister's colleague, the 2025-26 budget was the largest ever received.

I want to tease out with you the discretion on fare setting. This is as much for my knowledge as anything else. The evidence that you gave is that you are looking at some level of targeted service reduction. I will quote you directly, Chris: you said that it, "will be necessary" rather than "might be necessary", so it will happen. As I reflected earlier, the Department froze the fares, so what can it do on fares, and what flexibility does Translink have on fares? That is just for my understanding of how it works. The Minister can say, "We are freezing fares", and that is it. For Translink, is it the case that you cannot change fare levels but can change which routes you run or how you operate concessions? I am just not sure.

Mr Conway: Fares are completely regulated by the Department, so we cannot alter fares without the Department's approval. If there is a fare increase of, let us say, 2% or 3%, we have to look at how we allocate that across all the fare structures. I will put that in context: a fare increase of 3% or 4% will typically generate £3 million or £4 million. That is the scale of the inflationary benefit. Within that, we offer discounts for various groups to encourage and incentivise more people to use public transport and to help people in certain groups to use public transport. Those decisions tend to sit within Translink's remit, and that is what we are reflecting in that discussion.

The Chairperson (Mr Martin): That is useful.

The Community Transport Association (CTA) was at the Committee recently. The review of community transport is taking a lot longer than the Department initially said it would. The report has been pushed back a couple of times. It was meant to be out in April. It is now meant to be out in June, but it may be August. We are waiting for that, and we have flagged that to the Department. Have you had a conversation with CTA about routes and whether it has the capacity to help with some of the situations that you are facing into?

Mr Conway: We have had various conversations with the Community Transport Association in the past. Pilot projects were done in 2017 and 2018 among Infrastructure, Health, Education and the Community Transport Association about how networks could be delivered in rural areas in particular. There have not been any recent conversations about how that can be taken forward, but we are open to it.

The Chairperson (Mr Martin): That is good. This picks up on Justin's point about rurality. I am new to all of this, but, from the conversations that I have had, I know that the CTA picks up people who would otherwise be a little isolated and moves them around. The value of that for those people is fairly significant. Chris, are you or your team willing to meet the CTA, if a meeting can be facilitated, to have a discussion about some of the things that could be done or even to scope out whether it could help in some way and whether those pilots could be extended?

Mr Conway: Absolutely. We are very open to that. We have met some of its members in the past. The correlation between public transport on higher-volume corridors and community transport on lower-density corridors has been looked at. Merging the two so that community transport brings people to the higher-density corridors in order for them to carry on their journey in that way is a model that can certainly be looked at.

The Chairperson (Mr Martin): Brilliant. Thank you.

That is us. Well done. You got questions from everybody. That does not always happen at the Committee, so that is a badge of honour. Thank you.

It just remains for me to wish you, Chris, all the best, whether you are biking, fly fishing, golfing or doing something else. You never know, you might become a commissioner of something.

Thank you, Ronan, Chris and Ian, for coming along and answering all our questions today.

Mr Conway: Thank you, Chair, and thank you, Committee members, for your support.