Joint NBRU/TSSA Submission
TO

Joint Oireachtas Committee on Transport Tourism and Sport

Spokesperson/s DERMOT O’LEARY General Secretary

PATRICK McCUSKER Irish Organiser

Cathaoirleach, Members of the Committee

I wish to thank the Committee for receiving our Delegation here today.

The issue which we are here to discuss, the current situation at Bus Éireann, is one which reaches into every home in every community across Ireland.

Without Bus Éireann there is no Transport Network, there is no Connectivity in terms of Citizens being able to access Schools, Colleges, the Workplace, Hospital Appointments etc.

The NTA will say, and have said differently, we will cover that later in our statement.

But first things first. Is there going to be mass Travel Disruption next Monday across the Transport Network?

The answer at this remove must be a qualified, and unfortunate yes.

As has already been pointed out, some Bus Éireann Depots are shared with Iarnrod Eireann.

Even though we in the Trade Union Group are not in Dispute with Iarnrod Eireann, and we have advised our members accordingly, there is absolutely no guarantee that Rail staff will attend at work in locations such as: Limerick, Tralee, Waterford, Galway Sligo etc.
There are many aspects to this crisis, its creation did not come through the actions of Bus Éireann staff, it is wrong and totally disingenuous to describe the issue as an Industrial Relations dispute.

The consequences will go far beyond the impact of an old-fashioned Trade Dispute between Employer and Employee, whilst there is of course an immediate threat to 2600 jobs, the future of Public Transport for Rural Ireland is equally under threat.
There have been many statements made in the Dail and through the media that the problems at Expressway are confined to the advent of a competitive Commercial market. Whilst there are issues around competition, they do not tell the full story, nor does it provide a solution to the crisis at Bus Eireann.

Bus Éireann is a company that has three distinct elements, Expressway, PSO and Schools. The PSO services are allowed to make a reasonable profit by the NTA of approximately €400,000. The schools contract, an administrative arrangement with the Department of Education, covers its costs and the Expressway is the only leg of the company that can, ostensibly at least, chase profit and increase revenue.

So, what has caused this crisis?

The answer is straightforward enough for those of us who work within the Industry. Government policy.

The National Transport Authority, the Regulator and Authority has issued licences to commercial operators that has resulted in a saturation of seat capacity across the motorway network. Those licences have been issued without due regard to the existing Expressway services.

Consequently, people have migrated from the slower State carrier to the quicker private operator. Bus Éireann are not slower because of any inefficiencies but because the social aspect of the Expressway service has it calling to towns and villages the length and breadth of Ireland. The private operator’s cherry picked the most lucrative segments of the Expressway network, and now operate point to point for profit without any wider social service obligation.

How can the NTA state that they were cognisant of existing services when issuing licences?

Its own Guidelines dictate that it will be cognisant of existing services, the reality is manifestly untrue.

The same NTA, over recent weeks have been out attempting to rebut our contention that they saturated the Motorway Network by contending that ‘we have rejected almost as many applications for licences as we have granted’

They went on in that Press Release (attached) to say that:
‘our primary responsibility in law is to the travelling public, and when we assess an application for a commercial licence, we do so with this in mind, while looking at a whole range of considerations including likely passenger demand, impact on existing services and impact on subsidised services’ (PSO)

A quick analysis of this portion of the statement gives an alarming insight into the thought process of the NTA. Firstly, they say they consider the likely passenger demand.

The reality is different however, the Five licences they have issued and the three amendments they have made on the Dublin/Cork, Dublin/Limerick, Dublin/Waterford has not met that lopsided likely demand criteria, in fact what it has done is increase the seat Capacity by double the NTA’s own stated passenger numbers for the period 2012 to 2015.

The NTA contention that they look at the ‘impact on existing and impact on subsidised services’ is frankly laughable.

Why?

The following examples of the impact on existing services conflict with the NTA line:

Dublin to Waterford. Bus Éireann has 10 intermediate stops while the private operator stops only in Carlow. Dublin to Galway Bus Éireann has 16 intermediate while the privates have none. Dublin to Cork 4, privates none, Dublin to Limerick 4, privates none.

Simply put, Bus Éireann cannot compete because the NTA have over saturated the segments of its network that was returning a profit and issuing licences to privates with no social service, unless you happen to live beside a motorway.

Bus Éireann did once made a profit. As the following table, will demonstrate, Bus Éireann subsidised its Public Service Obligation routes to the tune of over €40 million over a ten-year period. This was an integrated Transport provider reinvesting profits back in to the State. Today any profits go to shareholders in Hong Kong or London. I say any profits because the most recent accounts of one of the main private operators (Dublin Coach) shows a loss of €1.6 million, which supports our view that the so-called market is oversaturated.

BUS EIREANN OWN FUNDS CONTRIBUTED

Year Own Funds contributed Total
2002 €4.7 million
2003 €6.4 million
2004 €3 million
2005 €4.1 million
2006 €5 million
2007 €5.2 million
2008 €7.2 million
2009 €1 million
2010 None
2011 Not defined
2012 €5.1 million approximately
2013 €1.7 million €43.4 million
2014 None because of cost cutting

The NTA in Media interviews in early January said: If Bus Éireann were to pull services from Rural Ireland, then it, the NTA had a toolkit by which they would quickly move to, as it were ‘plug the gap’

Let us look at this wondrous toolkit, we have a working (?) practical example of its magical powers.

A number of years ago, Bus Éireann was forced to exit 5 towns along the Cork route in a futile attempt to compete with the ever-increasing number of privates. The NTA were forced to issue a tender for replacement services. M& A Coaches won that contract at a cost to the taxpayer of €440,000 per year for a Mini-bus service with less frequency to 5 towns. These services were being provided by Bus Éireann for free as part of its integrated network.

If the above costs were applied to Dublin/Cork, Dublin/Limerick, Dublin/Waterford, Dublin/Galway and Dublin/Clonmel taking into consideration average kilometres and the number of towns the approximate cost of providing minimum or basic bus services compared to what presently exist is €88,000 per town. The 38 towns, served by Expressway on these would cost the taxpayer approximately €3.34 million per year.
Bus Éireann themselves estimate that it would cost circa €5m p.a. to PSO fund towns currently served by Route 4, X8, 13/14, 21, 22, 23, 40, 51, 52, 64.

The foregoing clearly illustrates that there is a role for the Department of Transport and the NTA in resolving this crisis.

The Department of Social Protection should be added to the list of those that contribute to a resolution. The funding received by Bus Éireann from the Department of Social protection for carry the Citizens of this State who have free travel has been frozen since 2009.

Bus Eireann ‘Expressway’ provide 7m journeys annually, of those 2.4m, or 33% are DSP Passes, essential for those people who rely on this vital Government intervention.

Anecdotal evidence tells us that quite several private operators do not facilitate the DSP Passes.

Bus Eireann currently get slightly more that 40% of an average far, i.e. €4.81 for the average fare of €11.78
The recent Rail Review conducted by the National Transport Authority and Irish Rail recommended an increase of 40% in the monies Irish Rail currently receive from the DSP.

Irish Rail passenger profile reflects that 11% of its journeys are DSP Passes.

Such an increase to Bus Éireann would constitute an increase of €4.5m
If the Department were to provide an increase in funding that would bring in approximately €4.5 million per year.

In summation:

• The notion that the State has no role in addressing the problems at Bus Éireann is fundamentally wrong.
• It is simply not good enough for the Minister to state that he has no responsibility here.
• Such a stance does nothing to move this debate one jot.
• It also tells Rural Ireland that your current Bus services, will at best be replaced by a reduced Mini-bus service, and is therefore not as important, or as relevant as those in large Urban Centres.

That is Simply Not Good Enough

Categories: Bus Eireann, Staff notice

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