Public Transport Regulation Bill 2009 [Seanad]: Report Stage.

Before we begin, I wish to advise that I proposed amendments Nos. 79 and 91, on behalf of the Labour Party, on Committee Stage. Amendment No. 79 refers to park and ride facilities being consequent on the formation of the national transport authority, namely, that such facilities would be available through that authority. Amendment No. 91 relates to the key point of extending the integrated transport provisions of the Dublin Transport Authority, which we passed into law last year, to the national transport authority. We discussed those at length on Committee Stage. I note the Ceann Comhairle sent me a letter this morning ruling them out of order, but he did not rule them out on Committee Stage. Surely he is being inconsistent. These amendments relate to two important items, which I believe everybody interested in transport would like to see included in the Bill. I understand the point about them imposing a charge on the Exchequer, but should the Ceann Comhairle not at least have allowed discussion, given that they were discussed on Committee Stage?

Amendments Nos. 79 and 91 in the name of Deputy Broughan have been ruled out of order because they have the potential to impose a charge on the Revenue. Amendment No. 79 would require the provision of national park and ride infrastructure and the resources required would impose this charge. Amendment No. 91 seeks to change section 33 to broaden the functions of the national transport authority to apply within and outside the greater Dublin area.

Amendments Nos. 83, 84 and 89 are in the name of Deputy Fergus O'Dowd and have been ruled out of order because they have the potential to impose a charge on the Revenue. Amendments Nos. 83, 84 and 89 propose to extend the remit of the Dublin Transport Authority and, therefore, the national transport authority outside the greater Dublin area with immediate effect.

Will the Ceann Comhairle accept that he is being inconsistent in this regard and that he should have ruled the amendments out of order on the previous Stage at least?

I take the Deputy's point. However, the old principle of two wrongs not making a right applies in this case.

I move amendment No. 1:

In page 6, line 3, after "driver)" to insert the following:

"and a small public service vehicle having seated accommodation from more than 5 persons (including the driver)".

The reason for the amendment is to allow certain taxis, hackneys and other small minibuses to operate local public transport passenger services in urban and rural areas. There are many examples throughout the European Union of taxis and small minibuses operating public transport services in peri-urban and rural areas where there are lower levels of demand to provide feeder services to local and longer distance bus, train and light rail transport services. It is somewhat related to amendments Nos. 2 and 7. It seeks to insert a provision which would help us to provide a better local transport service by allowing smaller vehicles to be included under the definition of a bus.

Amendment No. 1 seeks to amend the definition of a bus to incorporate small public service vehicles with a minimum passenger accommodation of five persons including the driver. The Minister of Transport pointed out during the consideration of this amendment on Committee Stage that the word "bus" is defined in the Bill as a mechanically propelled vehicle designed for travel by road with seating accommodation for more than nine persons, including the driver. The same definition is also used in the Dublin Transport Authority Act 2008 and as Deputy Broughan is aware, that legislation is intrinsically linked to the legislation now before the House.

The primary purpose of the Bill is to establish a new licensing regime for commercial bus services on specified routes. Separate and distinct legal frameworks have evolved since the Road Traffic Act 1933 in respect of small and large public service vehicles. The Minister is strongly of the view that any blurring of the fundamental difference between large and small public service vehicles should be avoided at all costs and should not form part of this Bill because the focus of the Bill is on the development of a new legislative provision for the licensing of commercial bus services. Accordingly, the Minister requests the Deputy to withdraw the amendment.

I will withdraw the amendment on the basis of the Minister's consideration of the next two amendments.

Amendment, by leave, withdrawn.

Amendment No. 2 from Deputy Broughan arises from Committee Stage proceedings and may be discussed with amendment No. 7. Amendment No. 6 is alternate to amendment No. 7 but will be discussed with a later group.

I move amendment No. 2:

In page 6, between lines 38 and 39, to insert the following:

"(iii) carriage is provided for passengers on a pre-booked basis following a flexible route with varied stops with a specified geographical area, and".

This amendment seeks to add a third definition to section 2(c). Amendment No. 7 relates to Part 2, the core of the Bill, dealing with the new licensing system. Hopefully, at long last we will have a coherent, regulated licensing system for buses and it will end the effects of the scandalous lethargy of the Governments of the past 13 years. I seek for the granting of licences such that a licence shall specify the route and that the public bus passenger service should follow the commencement and completion points of the service and any stopping points along that route.

The rationale behind amendment No. 7 is related to the licensing of a flexible routed or demand responsive services such as those described in amendment No. 1. They already operate as part of the rural transport network programme in Ireland and many other countries. The UK operates the Public Service Vehicles (Registration of Local Services) Amendment Regulations 2004. This allows for the registration and route licensing of several flexible services. These include a many to one service, picking up individual passengers from a location specified by them and taking them to a single fixed destination; a one to many service, the above service in reverse; and a many to many service offering maximum flexibility and picking up passengers from various locations on demand and taking them to disparate destinations within a defined operational area on demand. That is also the transport rationale for amendment No. 2.

Amendment No. 7, a related amendment, is proposed because demand is very difficult to measure. The point of the amendment is that it should be up to those private operators who propose new routes to devise a business plan, measure demand and put forward proposals. The amendments are built around a structure to support the rural transport network. I realise the Minister of State's party has held some discussions on the rural transport network. The Labour Party believes it is one of the best and most valuable initiatives of the Government in the past seven or eight years. There are now approximately 37 operators in every county, including my county of Fingal. Some 1.3 million passengers are carried per annum. Some 750 are employed including between 70 and 80 full time drivers. A very fine service is offered to local rural communities, including those in the constituency of the Ceann Comhairle, to bring them to important health, school and other engagements.

Recently, we proposed the rural transport network could have a vital role as part of the new Road Traffic Bill which, it appears, will proceed after Christmas. The Minister for Community, Rural and Gaeltacht Affairs, Deputy Ó Cúiv, referred to the famous booze buses and that there should be a provision to help people get in and out of their homes and to avoid social isolation. In amendment No. 2 I have attempted to make provision for and to give a statutory basis to the rural transport network programme.

On 9 December next when the Minister is before the House and refers to the transport budget I trust we will not see the decimation of the €8.5 million allocation for this service. That would be a terrible error of Government and I urge it not make such a change. I seek a statutory basis for this local service. The ideal for communities in rural Ireland is to have the best possible local provision of public transport in every area of the country, a multitude of services linked up to larger providers, led by the national network of Bus Éireann. On Second Stage I remarked that people are entitled to a public transport service regardless of where they live. It should be our objective that access to a local public transport system be a basic right of citizenship for people from the Beara Peninsula to the Inishowen Peninsula. People took the initiative at local level, for which the Government has provided important funding since 2002, initially through the Department of Community, Rural and Gaeltacht Affairs and latterly via the Department of Transport. It is critical that this service be maintained. Professor Colm McCarthy has urged that the funding for the service be removed but we are of the view that this would be a dreadful error.

Amendment No. 7 seeks to place the service on a statutory basis. If we do not take action in respect of the matter in this Bill, we will be obliged to return to it in the future in order to ensure that proper legislation relating to rural transport is put in place. I urge the Minister to accept amendments Nos. 2 and 7.

I support these amendments. I agree with Deputy Broughan that amendment No. 7, in particular, is important. The key issue in this regard is the provision of transport services for those who live in isolated communities in rural and urban areas. People in many parts of Dublin city do not have access to public transport. I refer to individuals who live in estates which were built during the boom and which are located some distance from rail and public bus routes.

The rural transport initiative has been a huge success. Colleagues who represent areas throughout the country are in favour of it. When cuts are made in the budget, the unkindest cut of all that could be made would be to remove a service that is a lifeline for those — particularly those who are elderly and who do not own cars — who live in rural or isolated communities.

I reiterate the point I made on Committee Stage, namely, that a number of State and semi-State transport and delivery systems operate in rural areas. One of these is the An Post mail collection service. An Post's vehicles visit rural and other isolated areas every day. Would it not be possible for the company to adapt these vehicles or to use minibuses or mini-vans in order that the carriage of passengers might be facilitated? This would make a great deal of sense because postal routes are predefined and An Post vehicles visit isolated and rural communities on a regular basis and are more or less always on time.

I am aware that analysis is being carried out by the Government, the HSE and many other service providers. Perhaps An Post should be included as part of that analysis. Joined-up thinking on the part of An Post and the health service could see the former's vehicles used to transport people to hospital. There is duplication of services in rural areas. For example, certain transport operators — these may or may not be funded by the State — only cater for particular types of passengers. I am not being critical in this regard because certain people, whether they have disabilities or whatever, require dedicated transport services.

I am of the view that if this amendment were accepted and if there was co-operation among the various service providers — be they voluntary, public or private operators — we could witness the creation of a more effective transport service. The latter is, after all, the central theme of the Bill.

I acknowledge the points and arguments put forward by both Deputies in respect of the amendments. I also acknowledge Deputy Broughan's long-standing attachment to this issue.

Amendments Nos. 2 and 7 are linked in that they put forward a proposal under which pre-booked services would be the subject of the licensing system laid down in the Bill. That system is focused on something entirely different from what is proposed in the amendments, namely, the provision of commercial bus services on dedicated routes. The concept that people can be transported from a specified point to any location or locations determined by them has already been established in the context of both private hire and public hire services through the operation of taxis, hackneys, limousines and other forms of pre-booked services which may be unique to particular localities. Such services do not meet the essential characteristics of actual bus routes or bus services in that they are not scheduled, they do not follow defined routes, they do not have intermediate stops along the way and, most importantly, they are not available to the general public on a separate fare basis. Public bus services should be available on an equal footing to all members of the public and should not be the subject of prior booking. Essentially, prior bookings amount to private hire.

The amendments tabled by Deputy Broughan are well-meaning in nature and I recognise the intention behind them. As Deputy O'Dowd stated, there is a broad degree of cross-party consensus with regard to the importance of bus services. The issue of funding is exercising people's minds in the context of rural transport. However, I submit that the issue of such funding is separate to the workings of the legislation before the House. It is not the case that it is not necessary to deal with the issues to which I refer. However, they are separate to the architecture of the Bill, which provides for public bus services on dedicated routes and not for pre-booked services.

I must reject the amendments, which fall outside the scope of and intention behind the legislation. However, I acknowledge the points raised by the Deputies in respect of this matter.

I thank the Minister of State for his reply. The key point is that in two weeks' time, and if he follows Professor McCarthy's advice, the Minister for Finance could use the budget to pull the rug from under the rural transport programme. Amendment No. 7, which relates to the licensing provision in section 7, states that the rural transport service should be licensed as a bus service. This would place the principle which underpins the rural transport service at the core of the legislation. That service has been built up during the past six years, it is extremely valuable and all political parties have received strong representations in respect of it. Members of the Joint Committee on Public Transport met representatives of a number of operators, such as OK Transport, West Cork Rural Transport others, and were deeply impressed with the work these operators do for their local communities. A number of these companies to which I refer provide significant amounts of their own funding, which is also impressive. Some of them provide up to 50% of their funding from fares they receive.

By means of these amendments, the Labour Party is trying to make legislative provision in respect of the rural transport service. If my party enters Government in the future, I would like an integrated rural transport service to be the subject of legislation in order that those who live in rural communities might be granted fundamental basic rights. In Sweden, Norway and the UK, this matter has already been dealt with in legislation. It would be good if the rural transport service were enshrined in legislation. I am of the view that amendments Nos. 2 and 3 should have been taken together and if the former is not acceptable, then the latter would provide a fine alternative.

While I accept his points with regard to the local services provided by hackneys, taxis, etc., I ask the Minister of State to reconsider his position. If he does not do so, we will be obliged to return to this matter in the future.

I do not disagree with many of the points made by Deputy Broughan. However, there is an essential difference between small vehicles booked in a private capacity and buses which can accommodate nine people or more. The national transport authority — which, under this legislation, the Dublin Transport Authority will become — could not possibly deal with the former. I am not stating that this matter could not be addressed in some other way. However, it does not fall within the scope of the legislation.

The Minister of State substituted today at very short notice for the Minister, Deputy Dempsey, who is at a road safety function with the President. Unfortunately, as often happens, my colleague and I did not have the opportunity to attend the function——

We sent our apologies and stated that the Bill was being discussed.

Both of us would like to have attended because it is the launch of the critical Christmas road safety programme. The past few weeks have been terrible in this regard.

I will ask a question of the Minister of State and perhaps the officials will take it on board. Will the guidelines to be issued under the Bill, about which we spoke at length last Friday afternoon on Committee Stage, be examined to see whether a reference to the rural transport network can be included? On that basis I will withdraw amendment No. 2.

I will undertake to convey that to the Minister.

Amendment, by leave, withdrawn.

Amendments Nos. 4 to 6, inclusive, Nos. 8, 9, 11, 32, 34, 36, 44, 47 to 51, inclusive, and 53, 55, 56, 59, 73, and 75 to 78, inclusive, are consequential on amendment No. 3 and all may be discussed together by agreement.

I am not quibbling about this but amendment No. 3 is not grouped with those amendments on the list of groupings which I have. Is that a typing error?

They are grouped in the document I have.

I do not have that document.

Amendment No. 3 is not grouped on the document I have either.

Based on the information I received amendment No. 3 should be discussed separately. I am not here to waste anybody's time but on a point of order, amendment No. 3 is separate.

It was e-mailed to us at 11.30 a.m.

A mistake was made and amendment No. 3 should have been included in the group. I am bound by the pink sheet. If the question on amendment No. 3 is negatived it should be taken to cover all amendments in the group.

I want to be clear. I know people have been working overtime and that there have been difficulties; I accept and acknowledge that. I will call a vote on amendment No. 3 but I will discuss all of them together. I accept that the pink sheet is more powerful than the white one.

I move amendment No. 3:

In page 7, between lines 18 and 19, to insert the following:

"5.—A public bus passenger service may only be provided in accordance with a contract entered into under section 48 of the Act of 2008.".

The Bill arises from the discussions in the Dáil on the Dublin Transport Authority Act when I made the point very strongly that reform of the 1932 Road Transport Act should have been part of it but it was not. All of these amendments seek to address the fact that the Bill is being stuck onto the Dublin Transport Authority Act and much of it does not make sense. Fine Gael's key point is that many good aspects of the Dublin Transport Authority Act will not necessarily apply to the national transport authority. The Bill will expressly allow licensing outside of Dublin without competitive tendering for routes. I acknowledge that section 52 of the Dublin Transport Authority Act, which we opposed and asked to be deleted, allows for different systems to apply to Dublin Bus and Bus Éireann. Nevertheless, at the core of our principles on public transport is that competitive tendering for bundles of routes, and not the licensing system which we oppose in these amendments, would allow anybody, whether Dublin Bus, Bus Éireann or a private contractor, to apply for a bundle of routes which would meet their needs. These could be PSO routes or a mixture of PSO and productive routes that make money. The problem, and reason I will call a vote on this amendment, is that the core of the Bill does not allow for competitive tendering. It allows for a sweetheart relationship between the State and Bus Éireann and Dublin Bus. That is the core of our opposition to the Bill.

The Bill will be passed with Government support. It will not open up public transport to real competitive tendering. A bus market can be dealt with in many ways. I want to make it clear that we oppose complete deregulation, which would mean open season for everybody. We do not support privatisation, where privatisation means privatising routes to specific people. We are stating that we must have competitive tendering. The legislation proposes a direct award system to Dublin Bus and Bus Éireann and we believe this is anti-competitive in that it gives a special relationship to those two companies and protects them for a period of up to five years. The routes of Iarnród Éireann are protected for a period of up to ten years.

The Minister argued that the intent of particular sections of the Bill is to allow for competitive tendering for individual routes before the five year period is completed. We do not accept that and we argue the State should allow it immediately. The very good reason for this is that the private sector is being excluded from these routes by the Bill for a significant period of time. The private sector has double the amount of buses of Dublin Bus and Bus Éireann together and employs thousands of people. To allow it to compete at this stage would remove a burden from the taxpayer in terms of the money used to fund Dublin Bus and Bus Éireann.

The figures clearly show that this year, the CIE group of companies will be subsidised by the taxpayer to an amount of up to €320 million. This is a large amount of money. Between them, Dublin Bus and Bus Éireann receive approximately €100 million in subsidies. It would make sense if people who have bought and paid for buses are allowed to go on the road and participate in competitive tendering for individual routes. It would increase choice for consumers and create more routes. At present, the Dublin Bus network does not meet the needs of the more than 200,000 extra households in existence in the greater Dublin area, many of which do not have a rail or public bus service. If we really want to make changes and have an alternative choice for our citizens we should immediately allow competitive tendering throughout the country.

I have spoken to Bus Éireann and Dublin Bus. Dublin Bus accepts that it is ready for competitive tendering, but like St. Augustine who prayed to be made holy but not yet, does not want it to happen yet. It wants to wait five years, which is not good enough. We should have competition immediately. That is the fundamental point we are making on the Bill and why we propose these amendments.

The fundamental issue is that we must have choice. Either we have real competition or we do not. In 2000, when he was Minister for Transport, the late Séamus Brennan proposed opening the bus market to competition. This has not happened in the past ten years and we believe it probably will not happen in the next five years, notwithstanding the arguments the Minister of State will make. We are strongly of the view that this is going down the wrong route and protecting people who do not need to be protected. If Dublin Bus accepts that it will be competitive in five years, there is no reason it is not competitive now.

The bus market must change and issues of monopoly and lack of choice for consumers should not continue to arise. As I stated on Second and Committee Stages, issues have arisen with regard to Dublin Bus abusing its position in the marketplace.

According to correspondence received from the Department of Transport under freedom of information provisions, a private operator which had licences for certain routes found that Dublin Bus abused its market position. When the operator started to provide its service, buses from Dublin Bus preceded it along the route and inspectors were everywhere. That operator has since gone out of business, with the result that the service it provided is no longer available. We want competition in a market which is not abused by dominant players.

I understand Bus Éireann maintains a symbiotic relationship with private operators with a view to providing a better service to the public at reduced cost to the taxpayer. However, except in the case of school transport, Dublin Bus refuses to engage private enterprises in a good business relationship. It allows them to operate orbital routes while closing them out of cross-city routes. The company has had it too good for too long. Its management does not argue against competition but says it should not be introduced now.

This Bill will copperfasten the unhealthy relationship between CIE companies and the Government during a period in which less money is available for subsidies. We should be able to stand on our own two feet and State companies should compete on a level playing pitch with private enterprise.

This grouping of amendments would eviscerate the Bill. The reforms introduced in the Bill are critical because we continue to operate under the Road Transport Act 1932 in respect of bus licensing. That Act was introduced to protect railways in an era when bicycles and horses were the key modes of transport. My party has problems with the Bill in regard to ensuring a level playing pitch when competition starts, which is why we cannot give it our full support. However, I concur with the principle of replacing the chaotic free-for-all which existed heretofore with a good system of strictly regulated competition.

The Joint Committee on Transport recently heard a presentation by Citylink, which is the Irish branch of one of the largest bus transport companies in the world. It operates a fleet of approximately 45,000 buses in China, the Far East and various European markets. In Ireland, it illegally operated a bus link between Galway and Dublin. It planned to operate buses every five minutes between Galway and Dublin Airport in defiance of the departmental officials who refused it a licence. As a law breaker, the company should not perhaps have been invited before the committee in the first place. The fact that it behaved like a privateer as if the law on transport licensing did not apply to it demonstrates the need for further legislation on strictly regulated and sustainable competition. It was going to use the cut-throat practices that were successful in other markets to drive a well established private company and Bus Éireann off the route. For that reason, I cannot agree to this grouping of amendments.

The system provided in this legislation for urban and interurban transport represents a reasonable compromise in many respects. We have to pass the Bill before 3 December or we will be in breach of EU Directive 1370/2007. That directive initiates a ten year process of gradually opening up transport markets. The Bill recognises this in respect of Dublin Bus and, to a lesser extent, Bus Éireann. Officials from the Department of Transport and the Office of the Attorney General have tried to achieve a reasonable compromise in this regard.

I referred on Second Stage to a major study of transport deregulation in the UK carried out by that country's Office of Fair Trading. Aspects of London's transport market resemble the proposals made by Deputy O'Dowd but the rest of the UK has had regulated competition for the past 20 years. The study revealed that a monopolistic situation has developed, whereby four large companies, including the one which came before the committee, split the market between them. They rarely compete against each other and use all kinds of scams, such as exclusivity. If competitors operate along one of their routes, they schedule their own buses five minutes prior to the competing service in order to make it impossible to establish a foothold. They have also used other anti-competitive measures such as the salami slicing of routes, whereby they withdraw from portions of routes which service poorer areas until the relevant local authority steps in to provide a subsidy. The scams are of such an extent that the Office of Fair Trading referred the British transport market to the UK Competition Commission on anti-competitive grounds. The amendments proposed by Deputy O'Dowd could have the result of creating a similar outcome here, which would be in nobody's interest. It would simply benefit one of the four large companies in question, one of which is related to the company which operates Citylink. A monopoly would emerge similar to that which obtains in Liverpool, Hull and Middlesbrough where services are provided by one company. The four companies in question own the system which results in private monopolies. We must avoid such a scenario at all costs.

A few days ago, I asked the Minister for information on the PSO — public service obligation — subsidy to Dublin Bus, Bus Éireann and Irish Rail. The figures contradict what my colleague, Deputy O'Dowd, from the Fine Gael Party stated. It is striking how consistent the subsidy has been. As the Deputy will be aware, the subsidy to Dublin Bus and Bus Éireann has been declining and is now less than it was in several years at the start of the decade. This reduction is due to major cutbacks introduced in the April budget.

The information shows that since the turn of the millennium Dublin Bus, Bus Éireann and Irish Rail have been operating on a subsidy of approximately 27%, 12% and 42%, respectively. Rail, as Deputies will be aware, is the most expensive mode of transport. These figures compare favourably to subsidies provided to transport operators in other countries. One does not find large regional operators such as Bus Éireann operating on a subsidy of 12% in Belgium, the Netherlands or Germany. Some of the companies operating in these countries receive subsidies of 78% and 80%. In other words, the system in these countries is run as a public service to link communities. None of these facts comes through in the arguments made by privateers.

The most striking feature of subsidisation is that the private system I have described in the United Kingdom receives a subsidy of 33%. The four monopolistic operators to which I referred receive a subsidy from the British Government, through its local authorities, of one third of operating costs, which is almost three times the level of subsidy provided to Bus Éireann and in excess of that provided to Dublin Bus. That is the reality of the so-called competition in operation in the United Kingdom for the past 20 years. We must move carefully to ensure members of the public do not lose services and end up with a worse transport system under the guise of reform.

The Deloitte report found conclusively that Bus Éireann was a highly efficient company. While it noted that some reforms were required in the networking of Dublin Bus — I understand reforms are under way in this area — it also noted that, by and large, the company ran a good service.

The Minister spoke eloquently in the debate on the National Asset Management Agency Bill. We still have economists who worked for banks telling us how to get out of the financial crisis and what measures should be taken in the budget. Do these people not have any shame? Having worked for the banks, their representatives have brass necks appearing on television to give advice on budget cuts. They should cease practising their profession because they failed us and their companies. They did not see what was coming, even though ordinary citizens saw it coming for two or three years.

Is this related to the amendment?

Yes, because we have the same people ranting in newspaper columns about competition in bus markets, despite not knowing how bus markets operate. They do not know, for example, that the subsidies provided to private sector companies in the United Kingdom are much higher than those provided to public service companies here. As I noted, without a large population, maintaining a rail service is an expensive business. For this reason, the bulk of the CIE subsidy is provided to Irish Rail.

Several operators tried to establish new services under the current system. For example, Mr. Trevor Patten established a service known as the "Patten Flyer" to link Dún Laoghaire and Dublin Airport. However, under the current chaotic licensing system, this direct service, which was deeply appreciated by commuters, was not given a licence to operate on the route. Instead, the licence was awarded to another operator, Aircoach. My party leader, Deputy Eamon Gilmore, and other Deputies have spoken about this case, which demonstrates the chaotic nature of the current system. The reason we are discussing this legislation is that we need to introduce a proper system to regulate competition in a sustainable manner. Such a system would provide the best possible service to commuters and passengers. I will not vote for Deputy O'Dowd's amendments because they would not achieve this objective.

I also have a problem with one of the other amendments. The legislation will not create a level playing pitch for all companies. I accept, however, that in general terms the sector needs reform, as demonstrated by the case of the Patten Flyer. We need a modern system of licensed competition. I ask the Minister to speak to Mr. Patten and similar operators and consider the type of services he and others could or do offer. I hope the new system will provide for a more level playing pitch.

I thank Deputies O'Dowd and Broughan for their contributions. I have rarely on Report Stage seen such a large group of amendments on varied issues that have been teased out in committee. The fundamental amendment proposed by Deputy O'Dowd goes to the heart of the legislation and demonstrates the key difference that divides the Fine Gael Party and Government on this matter. The core purpose of the legislation is to protect consumers and customers. It strikes a delicate balance between the rather extreme view articulated by Deputy O'Dowd and the more reasonable view espoused by Deputy Broughan. The legislation steers a course between these views, albeit one that veers towards the model espoused by Deputy Broughan.

I propose to make a number of fundamental points on Deputy O'Dowd's position and set out the consequences of his proposal. As a result of the Fine Gael Party proposals, all bus services, commercial and subvented, would have to be the subject of a tendering process and contract with the new national transport authority, formerly known as the Dublin Transport Authority. The logical conclusion of the Deputy's proposal would be that the authority, rather than the operators and private companies, would have an obligation to identify new commercial bus opportunities, including bus services for once-off events such as concerts and sporting occasions. It would not be open to the private sector to identify such opportunities if a tendering process by a national authority was required for this purpose. For example, if a concert was announced at short notice, it would not be open to the national transport authority to establish an entire tendering process within a very short period. This approach would not be in the interests of streamlining the bus licensing process or improving efficiencies in the delivery of services to the general public.

Deputy O'Dowd seeks to expand the terms of section 48 of the Dublin Transport Authority Act 2008 to cover the operation of all services, both public and private. The section, through which contracts for public transport services are to be made, was prepared on the basis that contracts for bus services would only arise in the case of subvented services that are the subject of a public service obligation, while commercial bus services would be the subject of a bus licensing regime. We believe that there should be both. Competitive tendering for all would not suit Irish circumstances. The Minister considers that this is a reasonable and very appropriate approach, and asks the Deputy to withdraw the amendment.

The abuse of a dominant position was raised by Deputy O'Dowd. We do not want a completely unregulated free-for-all for tendering that will leave whole areas of Dublin or the rest of the country without bus services. That is the inevitable consequence of unregulated tendering. A regulated competitive environment is absolutely vital, be it in public transport or private transport services. Deregulation and lack of regulation in the banking sector serves this point. It is important to have a very competitive banking sector, but the problem started in America ten or 15 years ago, when there was total deregulation. The last person deregulation serves is the consumer. The provider, the bank, the dominant player in the market — these are the ultimate winners from complete deregulation. The essence of the debate here is whether we should have total deregulation or a highly unsustainable regulated model, as espoused by Deputy Broughan. We suggest that this Bill strikes a balance between those two extremes, because it protects the consumer, allows existing State bus operators to operate on routes which would otherwise be unviable. We must protect these routes, but provide for competitive tendering in other areas.

We do not wish to provide complete protection. Section 52 deals with many of the issues raised by Deputy O'Dowd on competitive tendering. It establishes the basis for continued provision through State funding of the existing public bus and rail passenger services that are currently provided by Bus Éireann, Dublin Bus and Irish Rail in the greater Dublin area. It empowers the authority to enter into direct award contracts with Dublin Bus, Bus Éireann and Irish Rail for the provision of existing funded public bus services and rail services in the greater Dublin area. To facilitate the making of the contracts in respect of the public bus services, section 52 establishes that Dublin Bus and Bus Éireann have exclusive rights to continue to operate their current funded services, subject to the grant of bus licences under the 1932 Act and future legislative changes. These arrangements support the continued operation of services in the general public interest.

The key aspect of section 52 is that the authority must enter into direct award contracts with the three companies mentioned for the services in which exclusive rights apply. These initial contracts may only be for five years in the case of a bus service. The contents of these contracts and the basis for maintaining them may be reviewed at any time by the DTA. The future national transport authority will have a key role here in monitoring the contracts to ensure they are serving the public interest, and that there is no abuse of a dominant position. The Minister will have to keep a very close eye on this in the House, through the relevant Oireachtas committees, to see if the national transport authority is really pursuing and vindicating the objectives, aims and principles set out in the Bill.

Section 52 provides that following the expiry of the initial direct award contract, the authority can also enter into subsequent direct award contracts. However, such contracts may only be pursued where the authority is satisfied that the continued adequacy of the public bus passenger services to which contracts relate can only be guaranteed in the general economic interest, by entering into such direct awards. What does that mean? It means there is a statutory framework in place to protect services that would not be protected if the Fine Gael amendment were enshrined in this Act. That allows the authority to cater for that situation. Where the authority reviews a direct award on the grounds to which I referred, it must invite submissions from the holder of the contracts or any other interested parties, including the users of the services. There is provision for services which the Bill seeks to protect. In every country there is state protection of some bus services. We want to allow a situation where that becomes somewhat more flexible in the interests of the consumer, but we also need to protect existing bus services. Section 52 address those competitive tendering issues that were raised by Deputy O'Dowd.

The grouping of amendments means that section 5 to section 28, inclusive, would be deleted from the provisions of this Bill. Deputy Broughan is opposed to those amendments and he made the case against them. It is generally recognised that the Bill provides for a replacement of the 1932 Act, which suited that time but does not suit the market as it pertains at the moment. It applies to the licensing of private bus operators and the relevant provisions of the Transport Act 1958 that relate to the provision of bus services by the State bus companies. The current licensing regime has long been recognised as being outmoded and in need of reform or replacement, so that it can better support the provision of modern bus services that place consumer needs at their core. The new bus licensing regime will apply in respect of all commercial public bus services, including those provided by Bus Éireann and Dublin Bus, and which will provide for a modern set of criteria against which licence applications can be assessed.

The provisions of the Bill establish a mandatory requirement for operators, such as the need to hold a licence, to comply with conditions and allow the new national transportation authority to adapt to the system to meet changing market needs. That is a key aspect of this. As the requirements of the consumer evolve over time and as Dublin in particular changes, the authority is empowered under the sections and the proposals in this Bill to adapt and to adopt a flexible approach. An inflexible and very deregulated approach does not allow for flexibility over time to deal with emerging situations. That is where I would see the real flaw in what Deputy O'Dowd is saying.

Deputy Broughan claimed that the 1932 Act does not work, and while he does not agree completely with all the details of this Bill, it goes some way to dealing with the defects in the 1932 Act. If we were to accept the Fine Gael amendments, it would blow away the centre of the Bill and would effectively allow the 1932 Act to pertain. It is not in anybody's interest that this situation——

That is rubbish. I never suggested that.

If we were to replace it by competitive tendering——

The Minister of State, without interruption. Deputy O'Dowd will have a chance to respond.

I want to challenge what has been said.

The Deputy's amendment does not serve the customer.

Ultimately, it would serve the service provider, as it does in all completely regulated markets.

I would agree with the points made by Deputy Broughan in regard to the United Kingdom, where it has not worked, either by way of bundling or complete deregulation. There is no regulation of commercial bus services in Britain and the Deputy has cited some examples in that regard which show that, ultimately, in the last mile of services, it is the consumer who suffers.

The general point which the Government makes is that while there is a genuine and recognised need for reform, the Bill as proposed strikes a reasonable balance. We are always open to suggestions as to how it can be improved but it allows that reasonable balance and, crucially, it allows for flexibility to deal with emerging issues in regard to the provision of public services.

Deputy O'Dowd will now have a two-minute contribution. Deputy Broughan, if he wishes to contribute, can have two minutes. The Minister of State will then have two minutes to respond, and Deputy O'Dowd, as the mover of the amendment, will have a further final contribution.

I need to address the issues.

On the Deputy's third contribution, he can speak for as long as he wishes.

On a procedural issue, I was informed at 11.30 a.m. that amendment No. 3 would be dealt with in a group with the other amendments. I want to reply to the serious points made but I will not be able to do so in two minutes. Is it possible for me to address each of the amendments?

If I allow Deputy Broughan to speak now, Deputy O'Dowd can then speak for as long as he wishes. I presume the Deputy will be pressing the amendment before 1.30 p.m.

Yes. I would expect to press it before that time.

We will have to suspend at that time.

I appreciate that.

Amendment No. 50 in my name deals with the issue of bundling, which is dealt with in the section concerning the transfer of licences, a subject in which the Acting Chairman has an interest. We are very nervous about the transfer of licences following our experience in the taxi industry. As a spokesperson on transport and a member of the Oireachtas Joint Committee on Transport, in trying to invigilate the transport sector and the Commission for Taxi Regulation, I have seen that perhaps one of the worst features of that market is transferability, because it makes it very difficult to keep tabs on who is in the industry. One gets a plethora of complaints from decent operators who work morning, noon and night trying to make a living in the taxi business.

Looking at the issue across the industry and in the bus sector, where there is the possibility of a transfer of a licence, the licence might be for a specific period and it might be possible to review it. However, the basic idea is that a service is operated so that commuters get a particular licensed route, for example, from Tullow, County Carlow to Dublin. Somewhere along the line, however, the company operating the service will no longer be doing so and a separate company will have come in, with the licence being effectively transferred. This is an area the NTA would need to watch carefully.

A nightmare situation has developed in the taxi industry which should not be replicated. On that basis, I would have liked to delete section 18. The Minister of State may claim there could be cases where companies are in difficulty and so on — the death of a licence holder was dealt with in the previous amendment — but, in general terms, I stand over the point I have made. This is an important issue given the difficulties in the taxi industry, with which the Acting Chairman is familiar. I urge the Minister of State to think again about transfers.

Deputy O'Dowd will speak for two minutes and the Minister of State will reply for two minutes. Deputy O'Dowd will then make a final contribution, to which no one will be allowed to respond.

In terms of this debate, I have never come across a more uninformed Minister of State. I am not being personal. We are talking about choice for consumers yet he chooses to misrepresent what I said as being an extreme view and as being in favour of complete deregulation, which is untrue. I would put the Minister of State on one side of the Berlin Wall, which featured on George Lee's television programme last night. The Berlin Wall is gone. The Minister of State is the old hat, the old thinking, the old politics, where there is no change, where he continues to sustain and maintain State companies and State monopolies, as the Labour Party does in this debate. We are on the other side of that wall, with the new thinking, the new modern State, the new choices.

There are over 1,800 private service providers of buses in this country. They have over 6,000 buses and employ over 6,000 people yet they are cut off by the Minister of State's Berlin Wall and will not be able to cross it due to this legislation. It is he who is the extremist in his backing of the "no change" mentality. It is he who is backing the question of State operation or direct reward to favoured companies.

On a point of information——

The Deputy should sit down. We listened to him for long enough.

On a point of information——

The Deputy cannot make a point of information. He can make a point of order, with the consent of the Chair.

On a point of order, the Deputy might know that the eastern part of Berlin has the equivalent of a Luas. Why is that? It is because that old regime the Deputy talked about kept that service whereas the regime in the west did not. It is not as simple as he paints it. He does not know too much about transport.

I know much more about it than Deputy Broughan.

Deputy O'Dowd should be allowed to finish.

The core of the argument is whether we open it up to competition, as the late Minister, Séamus Brennan, proposed ten years ago. Under this legislation, it will not happen for at least another five years. That is to wait 15 years for change. We in Fine Gael say we will change this immediately. We will have no sweetheart deals with companies. We will let everybody in, be they State or private, with competitive tendering and bundling for choice for consumers. Under the Minister of State and the Labour Party, we will have no choice but more of the same. This means that vast areas of Dublin city have no choice of bus service. They have only the monopoly of the State companies, which is not good enough.

We fundamentally disagree with the Fine Gael position. The Deputy says this is a charter for no change. It is a fundamental change in our bus licensing legislation from the 1932 Act and the Transport Act 1958 to deal with the circumstances that suit Ireland. We disagree on one basic fact, namely, if we were to accept the Fine Gael proposal, the obligation would be on the national transport authority to invite tenders in this regard. We want competition but we want bus service operators to request licences for particular routes. We disagree with Fine Gael in that we believe the ultimate consequence of what it is proposing is that vast parts of this city and country would be without bus services. That is the factual position.

I wish to address Deputy Broughan's points on section 18. The Minister undertook to look again at this proposed amendment in the context of the possibility that a market could develop for bus licence transfers in the same manner as that experienced in respect of taxi licences before the market was liberalised. Taxi licences developed a value for two linked reasons. The first was the almost total lack of growth in the number of new taxis after 1978 in virtually all areas. The second was the expectation that there would be no future growth, which resulted from decisions made annually by the elected members of the relevant local authorities. Those market conditions are totally lacking in the context of the licensing regime that currently applies in respect of the commercial public bus services or the proposed regime under this legislation. The overall licensing system envisaged under this Bill will offer a far more robust approach to competition in that there is a far greater emphasis on the need to meet the demand of consumers. Therefore, there is no basis for any expectation that the licence will give some form of exclusive protection from competition to its holder. It is the absence of that expectation that will render moot any potential for profiteering through the sale of licences.

The Minister considered strongly the points made by Deputy Broughan but because of the considerations I have just set out, he asks the Deputy to withdraw the amendment.

As the proposer of the amendment, Deputy O'Dowd does not have any time limit on his final contribution. If he is pressing his amendment, he will have to do so before we suspend at 1.30 p.m.

I hope to do that. I want to get to the core of what the Minister and I are saying. There is a significant division of thought between Fianna Fáil, Fine Gael and Labour concerning the opening of competition in our transport systems. Deputy Broughan spoke about a State-controlled system and the Minister of State mentioned an award system for State companies to the exclusion of everybody else. That is a fundamental part of the Minister of State's view and he is wrong. The Minister of State has said that we are extreme in our view to want more people to have more choice of buses and have more people working in these companies. That is a reasonable position and it is the Government which is extreme.

I shall discuss the meaning of the Minister of State's position. In 1999, the subsidy to Dublin Bus from the taxpayer was €16.8 million. In 2009, that subsidy had risen to €82.4 million.

What are the percentages? The Deputy should give us the percentages.

That was the rise. This means the Minister favours inefficiency in services and a lack of support or supply to people in communities. Over 200,000 of all new homes built in the State from 2000 to 2008 were in the greater Dublin area, yet the number of buses in the Dublin fleet remained almost static.

It was a Government decision.

The number rose from 987 to 1,028.

A Government decision.

Deputy O'Dowd, without interruption.

It is all right, I am used to it. In 1999, the subsidy which Bus Éireann got from the taxpayer was €7.4 million and in 2009, the subsidy went to €44.9 million.

Essentially, the taxpayer is subsidising the CIE companies to the tune of almost €127 million per annum. In these amendments, Fine Gael is arguing that this is not good enough. The spectrum of control in the bus market is now going from the State operation which we currently have to a direct award system for Dublin Bus and Bus Éireann.

I acknowledge that the Minister, Deputy Dempsey, has been absent from the Chamber due to issues outside his control, but I should clarify that Fine Gael has never favoured a deregulated market. I refute absolutely the comments from the Minister of State who has just left. We have never favoured such a market and we will not. We favour the tendering of individual routes or bundles of routes to competing operators, with such bundles including a mix of profitable and social routes.

The advantages in this method of tendering and running our public transport system are that such a system is designed to maximise the benefits of competition in a market while seeking to protect the public interest in terms of route coverage, safety standards and possible price controls. In essence, the regulator would define the routes or bundles of routes on which the participants in the market must bid for the right to operate.

In general, such bundles would be geographically cohesive in order to maximise scale efficiencies to the operator and would attempt to balance profitable and social routes. In the case of individual routes, the tender could range from concession charges paid by operators for the privilege of operating profitable routes to route-specific subsidies received by operators to compensate for the cost of operating social routes.

That is at the heart of what the people of this country want and this debate. The Fine Gael position is exceptionally clear; it is open, fair, balanced and competitive above all else. It gives the best deal for the taxpayer and provides the greatest choice at the lowest cost. It provides a bus for the consumer and unlike Deputy Broughan, we do not care if that bus is red, white or blue as long as it is there on time, fares are competitive and the taxpayer is exposed to the least amount of expense in providing that bus.

What could be fairer than giving the choice to compete for routes to Bus Éireann, Dublin Bus and the private operators, of which there are over 6,000? Private operators have twice the number of buses in CIE companies and they cost the taxpayer nothing. Choice is fundamental.

This Bill's purpose is to reform a Bill from 1932 — decades ago — but it has been rushed through the Dáil to meet the deadline on 3 December. If the Minister and his Government were serious about reforming the bus market and change, this legislation would have been introduced when the Dublin Transport Authority Bill was initially introduced to the Dáil over a year ago. At that time I said to the Minister that we needed a national transport authority and not just the Dublin Transport Authority. It did not happen and we now have a timetable with a very short period in which changes will happen.

The main beneficiaries of the legislation will be the CIE companies and those who will be disadvantaged are the consumer looking for choice, competition and reduced fares, and the taxpayer. That is the issue in a nutshell. The truth is out and the arguments are clear for all to see. The divide is clear between those who do not want change or say that it might happen in five years and those of us in Fine Gael who argue for immediate change. The people want such change and they will not put up with the current arrangements.

Recently, the rail line between Drogheda and Dublin was damaged with the collapse of the Malahide viaduct and this brought a complete change in public transport. People had the train before but they do not have the buses now which they really want. Using the bus was quicker and more efficient because it gets to the city more quickly. On the line between Drogheda and Dublin there are eight points where speed reductions are employed despite the millions spent on it. Commuters want a seat if they can get one; they will get it on the bus but they are not guaranteed one on the train.

There is much new thinking on this and it is one of the good things to emerge from what could have been one of the worst ever tragedies in Malahide. People are thinking again and considering using the bus. Buses are now believed by many people in my area to be the best form of transport. They think it is the most efficient and reliable, given what has happened. It is amazing to think that despite millions of euro in investment, the train is no quicker now than it was 30 years ago.

The fundamental point in this legislation is a lack of proposed change. It is more of the same State control and East German thinking. A programme on television last night showed how thinking changed fundamentally when the Berlin Wall fell. We want the Berlin Wall in public transport to end and we want choice and competition. I could go on ad nauseam about this but there is a core argument. If we are paying €127 million per annum in subvention for two bus companies and providing them with a sweetheart deal for the next five years, notwithstanding section 52 or 58, is that good or bad for the consumer? Is it good or bad for the taxpayer? I believe it is bad. That is the reason I am pressing these amendments to a vote. We need massive change, but we are not going to get it in the legislation. Between 1932 and now we have had no change. This legislation is now being rushed through the Dáil at the last minute, and we are being warned of the alternatives if it is not passed, alternatives that make no sense at all because they fail to go to the core of the issue, the change that is so urgently needed in our country.

Amendment put.
The Dáil divided: Tá, 31; Níl, 64.

  • Allen, Bernard.
  • Barrett, Seán.
  • Breen, Pat.
  • Burke, Ulick.
  • Carey, Joe.
  • Clune, Deirdre.
  • Connaughton, Paul.
  • Coonan, Noel J.
  • Coveney, Simon.
  • Crawford, Seymour.
  • D’Arcy, Michael.
  • Deenihan, Jimmy.
  • English, Damien.
  • Feighan, Frank.
  • Flanagan, Terence.
  • Hayes, Tom.
  • Hogan, Phil.
  • Kehoe, Paul.
  • McCormack, Pádraic.
  • McGinley, Dinny.
  • Naughten, Denis.
  • Neville, Dan.
  • Noonan, Michael.
  • O’Dowd, Fergus.
  • O’Keeffe, Jim.
  • Perry, John.
  • Reilly, James.
  • Ring, Michael.
  • Sheahan, Tom.
  • Stanton, David.
  • Timmins, Billy.

Níl

  • Ahern, Dermot.
  • Ahern, Michael.
  • Andrews, Chris.
  • Ardagh, Seán.
  • Aylward, Bobby.
  • Behan, Joe.
  • Brady, Áine.
  • Browne, John.
  • Byrne, Thomas.
  • Calleary, Dara.
  • Carey, Pat.
  • Collins, Niall.
  • Conlon, Margaret.
  • Connick, Seán.
  • Cregan, John.
  • Cullen, Martin.
  • Curran, John.
  • Dempsey, Noel.
  • Devins, Jimmy.
  • Dooley, Timmy.
  • Ferris, Martin.
  • Fitzpatrick, Michael.
  • Fleming, Seán.
  • Flynn, Beverley.
  • Gogarty, Paul.
  • Gormley, John.
  • Grealish, Noel.
  • Haughey, Seán.
  • Healy-Rae, Jackie.
  • Kelly, Peter.
  • Kenneally, Brendan.
  • Kitt, Michael P.
  • Kitt, Tom.
  • Lenihan, Brian.
  • Lenihan, Conor.
  • McGrath, Mattie.
  • McGrath, Michael.
  • McGuinness, John.
  • Mansergh, Martin.
  • Martin, Micheál.
  • Moloney, John.
  • Morgan, Arthur.
  • Moynihan, Michael.
  • Mulcahy, Michael.
  • Nolan, M. J.
  • Ó Cuív, Éamon.
  • Ó Fearghaíl, Seán.
  • Ó Snodaigh, Aengus.
  • O’Connor, Charlie.
  • O’Dea, Willie.
  • O’Flynn, Noel.
  • O’Hanlon, Rory.
  • O’Keeffe, Edward.
  • O’Rourke, Mary.
  • O’Sullivan, Christy.
  • O’Sullivan, Maureen.
  • Power, Seán.
  • Ryan, Eamon.
  • Sargent, Trevor.
  • Scanlon, Eamon.
  • Smith, Brendan.
  • Wallace, Mary.
  • White, Mary Alexandra.
  • Woods, Michael.
Tellers: Tá, Deputies Paul Kehoe and David Stanton; Níl, Deputies Pat Carey and John Cregan.
Amendment declared lost.
Debate adjourned.
Sitting suspended at 1.35 p.m. and resumed at 2.30 p.m.