Vol. 558 No. 1
53 Ms Shortall asked the Minister for Transport in regard to his recent statement of his intention to franchise out certain bus routes in the greater Dublin area, the way in which these pro posals will improve services; the consideration he has given to the experience of other capital cities in this regard, prior to making a final decision in regard to Dublin Bus; and if he will make a statement on the matter. [23628/02]
On 7 November last I made a statement to the Public Transport Partnership Forum in which I outlined in detail my proposals for the reform of the bus market in the greater Dublin area involving the phased introduction of franchising.
Initial proposals for franchising were made in a Government consultation paper, A New Institutional and Regulatory Framework for Public Transport, published in September 2000. These proposals took account of research by my Department which looked, in particular, at experiences in London, Stockholm and Helsinki. That research concluded that where franchising had been introduced, operating and subvention costs had reduced and service quality improved
In response to the proposals outlined in that consultation paper, the Public Transport Partnership Forum commissioned a consultancy report, the NERA report, to examine models of transport regulation in a range of cities around the world to assist it in making a formal statement of its views in response to that consultation paper. Nine cities were identified as being representative of the wide range of approaches to public transport regulation that exist. The report summarised key aspects of each city's performance as well as the advantages and disadvantages of each city's approach. In general, the report supported the introduction of some form of competitive tendering for bus services in Dublin.
The European Commission also undertook independent research which supported the case for introducing controlled competition in public transport. This research led the Commission to publish proposals for a regulation which would require member states to tender for the provision of subvented public transport services. These research findings led me to propose that controlled competition in the form of bus franchising should be introduced in the greater Dublin area. I am convinced that properly designed and implemented, it can lead to significant improvements in service provision and reductions in the level of subvention for a given level of service. I look forward to further discussing these issues with the social partners.
Will the Minister accept that the cost base of Dublin Bus is probably as low as possible and that significant progress has been made in recent years in that company? Far from having difficulty in extending the level of service, it is only too keen to increase the number of routes. It applied to the Minister in this regard on a number of occasions but has been refused licences. Will he accept that deregulation of bus services in Britain, for example, has been unsuc cessful? Initially many players become involved but the number decreases quickly. The result is local private monopolies, which are not in the interests of the travelling public? What reassurance can the Minister give that there will not be similar developments here where bus services end up being worse than when there was a public monopoly?
I agree that Dublin Bus has made great strides. It has purchased virtually a whole new fleet, streamlined its operations, is a strong company and it has my support. I do not recall refusing licences to CIE. My information is that a licence is required when non-CIE companies operate. When CIE wants to operate a route which is not already serviced, I do not believe it requires a licence. However, I will double check that aspect for the Deputy.
On UK deregulation, I am not going down the UK route which made a mess of the railway system and the bus service outside London. I am interested, however, in going down the franchise route, which is not head-to-head competition with everyone rushing for the same bus stop. It is a franchising model similar to that used in London, Stockholm and Helsinki where the bundle of routes is tendered out by the regulator and a subvention is attached if required. The model which works in these three cities is the one I am interested in pursuing. I agree with the Deputy that many errors were made in the UK and I do not propose to repeat them.
What evidence has the Minister that private operators could provide a more competitive and reliable bus service than Dublin Bus currently operates? What is the position in regard to Dublin Bus routes where there is crosssubsidisation between the routes? If the Minister franchises out a profitable route, will he compensate Dublin Bus for the loss of profit on that route to enable it to subsidise some of the non-profitable routes? What are the implications of the Minister's proposals for people who currently enjoy free travel passes on all public buses?
The free travel pass is provided by the operator, whether CIE or a different operator.
At the same rate?
Exactly. The State purchases that service, therefore, it will purchase it from either the private sector or public sector so there is a level playing field. On the cross-subsidisation of routes, I propose to appoint a regulatory authority which will work out all these details. I am not being totally prescriptive because at this point I am just laying down the broad policy and deadlines. I will ask the regulator to work out the details of how routes are parcelled, subventions attached, cross-subsidisation and so on. I am confident these issues can be dealt with.
On whether there is evidence that the private sector can do better, many years ago the same question could have been asked. When Aer Lingus was doing fine people asked why allow Ryanair or anyone else into the market? The reality is that the competition grew the market. One could say the same about radio stations. Many years ago there was one big fine radio station, now there are 30 or 40 radio stations. That is no reflection on the one station, it just means there is room to grow the market because tastes change and so on. I could give ten such examples. If one applies the same thinking to public transport one will get the same buzz.
