Vol. 568 No. 6
75 Ms Shortall asked the Minister for Transport his rationale for his stated objective of franchising out 25% of Dublin bus routes; the way in which he views it will lead to improved services for commuters; and if he will make a statement on the matter. [16985/03]
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 had improved.
In response to the proposals outlined in that consultation paper, the Public Transport Partnership Forum commissioned a consultancy study, 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 existing approaches to public transport regulation. 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 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 have proposed that up to 25% of the market be franchised in 2004.
Does the Minister accept that traffic congestion is the main difficulty in operating efficient and profitable bus services in the Dublin area? Traffic congestion is costing Dublin Bus in the region of €150 million per year. Does the Minister agree that a franchising system on 25% of the routes will not provide competition? Replacing publicly owned services by privately owned services is not competition. Will the Minister explain how that will result in an improved service for commuters? Is it not the case that, short of sprouting wings, private operators will not be able to run a service which is more efficient or more reliable than Dublin Bus is currently providing?
Does the Minister agree that Dublin Bus has brought its costs down to the absolute minimum at this stage and that there is really no further room for improvement in that regard? How does the Minister expect that a private operator will run a more efficient service which will be as accountable as the Dublin Bus services? As public representatives, all of us are aware of difficulties with regard to routes, where large sections of population are not being served. Dublin Bus, by and large, goes out of its way to accommodate the demands of citizens. It is responsive to public representatives and to the Department, which will not necessarily be the case with private operators.
It is very difficult to understand how the Minister's proposals will make any difference to the travelling public – perhaps he will explain the basis for that. Does he agree, in respect of those routes which are profitable – of which there are not many – and where, currently, Dublin Bus can use its profits from the more profitable routes to cross-subsidise the less profitable ones, that the benefit of that profit will now be lost to the taxpayer? It will go into the pockets of private operators. What is the Minister's rationale for franchising out 25% of the routes? Is there any indication whatsoever that it will lead to an improved service. My contention is that the reverse will be the case.
I agree that traffic congestion is a big problem, as the Deputy has stated. The existing quality bus corridors and our decision to double the number of those in the city within the next year or so will help greatly. Other developments, including completion of the Luas and the Dublin Port tunnel, sorting out the situation with regard to the M50 and better traffic management will also help greatly to relieve congestion. Those are the practical measures on which we are already working. We are also considering proposals to open the hard shoulder from satellite towns to the city – that is currently being examined as a possibility.
I accept that Dublin Bus has to put up with a great deal of congestion, as have all of us, and that makes life difficult for it. The basis for my proposal lies in the various studies to which I have referred, including the research in my Department in relation to the nine cities I mentioned. The Public Transport Forum, which is representative of trade unions and others involved, produced its own study, the NERA report, suggesting that franchising is the way forward. In addition, the European Commission's study came to the same conclusion. There is a fairly strong independent body of research which suggests that giving the consumer a choice is a good idea, and consumers will have a choice.
The Minister is not proposing competition on the routes.
There are a number of options. We can leave the routes the way they are, of which the Deputy is in favour, or we could deregulate them fully, which would mean head to head competition. The experience of that in the UK has been disastrous and I do not support it. A third model stemming from the results of research suggests, as in the case of our radio stations, that the routes could be franchised out, operators could make bids for routes and licences for such routes could be awarded on the basis of fares, safety, regulatory—
There is competition among radio stations, but not on bus routes.
—for a set number of years. If a number of complaints against an operator are upheld while the operator holds a franchise or if an operator does not meet the requirements of the franchise set by a regulator, the licence would not be renewed, and that is the difference. At present, there is no facility not to renew a licence for any operator.
I make it clear that I have no criticism with regard to Dublin Bus. It has come a long way and it has a great fleet. It has good management and a dedicated staff, but I make no apologies for saying to them, as I have said many times, that just because it is a good bus company, does not mean it is entitled to be the only one. The public are entitled to have a choice of a range of services. Consumers are entitled to make their mind up as they go along.
There will not be a choice if there is no competition on the routes.
There are a number of private operators. For example, there is the company that operates the service to Dublin Airport. The public have a choice, in that, they can travel on the blue bus or on the green bus.
That is not what the Minister is proposing.
I am proposing a version of that – a version of franchising. To operate that route, that private company had to secure a licence.
Will there be competition in the operation of routes?
If the Deputy is saying the public should not have that choice, I do not agree with her.
They do not have a choice.
There is competition for the franchise. It is the same thing effectively.
The public do not have a choice if there is only one service.
That concludes Priority Questions. We move on to other questions.
I remind the House that the time limit for these questions is two minutes for the Minister's initial reply and a one minute limit applies to supplementary questions and the answers thereto, with six minutes being allowed overall for each question.
