EU Regulation 1370/2007 is the overarching legal framework governing the award of, and payment for, public transport services. This EU Regulation is supplemented here in Ireland by the statutory powers afforded to the National Transport Authority (NTA) under the Dublin Transport Authority Act 2008.
The Annex to the EU Regulation establishes the rules applicable to the compensation paid to what are known as direct award operators. These are operators who have been directly awarded the right to operate public transport services rather than the award of those services having been subject to a tendering process.
These rules state that the compensation paid to operators under direct award contracts may not exceed an amount corresponding to what is known as the net financial effect and provide detail in relation to what comprises the net financial effect. Included within that net financial effect is the concept of "reasonable profit". It is defined as "a rate of return on capital that is normal for the sector in a given Member State and that takes account of the risk, or absence of risk, incurred by the public service operator by virtue of public authority intervention".
Decisions relating to the use of revenues and profits are matters for an individual company and its Board of Directors.
As the issues relating to the detail and award of reasonable profit are statutory functions of the NTA who administer and enforce the PSO contracts with the transport operators, I have forwarded the Deputy's question to it for direct reply. Please advise my private office if you do not receive a response within ten working days.
The referred reply under Standing Order 42A was forwarded to the Deputy.