Skip to main content
Normal View

Public Transport

Dáil Éireann Debate, Thursday - 7 November 2013

Thursday, 7 November 2013

Questions (1, 2)

Timmy Dooley

Question:

1. Deputy Timmy Dooley asked the Minister for Transport, Tourism and Sport how he intends to address the increasing cost of public transport here; and if he will make a statement on the matter. [47216/13]

View answer

Dessie Ellis

Question:

2. Deputy Dessie Ellis asked the Minister for Transport, Tourism and Sport in view of a further increase in fares recently, his plans to help increase passenger numbers on public transport services; his views on whether fare hikes damage public transport viability; and if he will make a statement on the matter. [47411/13]

View answer

Oral answers (13 contributions)

On Wednesday, 23 October, the National Transport Authority, NTA, approved yet again a fare increase for the CIE group of companies. This is creating an unnecessary and unbearable burden on commuters throughout the country at a time of considerable financial pressure. What does the Minister intend to do to address the situation in which the CIE group of companies finds its only resort is to go back to the consumer as costs increase and as its inability to meet day-to-day costs continues? Will the Minister outline what he intends to do to address the matter?

I propose to take Questions Nos. 1 and 2 together.

My apologies to the House for being a little bit late. I was stuck in traffic in Blanchardstown this morning.

I do not set public transport fares. Just as in the telecommunications and energy sectors, it is the responsibility of the regulator - in this case, the National Transport Authority - to adjudicate on applications from the CIE companies and the Railway Procurement Agency for fare increases or changes. In our dealings with all companies, we have consistently emphasised that they must reduce costs ahead of future fare increases or service cuts. However, in the current environment, fare increases will be inevitable if costs cannot be reduced sufficiently to maintain a reasonable level of service provision and protect our network. The NTA recently approved a range of fare increases.  Significant savings can be made by passengers who choose to avail of the integrated ticket, the Leap card. In many cases, passengers will be paying fares that are below 2011 cash fares if they use the Leap card.

Notwithstanding the NTA's statutory responsibilities, the Government recognises the need for the CIE companies to respond to the challenge of reduced PSO subvention funding, reduced fares income arising from reductions in passenger numbers, and increased costs, such as fuel costs, which are outside their control. The country does not have the money it used to. We all know this. The board of CIE is pursuing a range of measures to address the financial position, including cost reductions across the three operating companies. Improved bank facilities have been agreed, which will ensure that the company has sufficient funding into the future.

The Government continues to provide substantial Exchequer investment in the public transport network despite the significant financial challenges. Over the three years from 2011 to 2013, the total Exchequer allocation to the three CIE companies, in respect of PSO services, free travel, school transport and capital expenditure, has been more then of €1.5 billion. The priority must be to get a better return from the public transport system through targeted investment and better use of existing resources and by using technology to make public transport more responsive and user-friendly.

My Department has also provided funds in Dublin and the regional cities to promote sustainable travel, including the further development of bus lanes, improvement of rail and bus stations, bus stops and shelters and improvements in accessibility. Through the NTA, my Department is also funding the use of smart technology to make public transport easier to access and more reliable for the user. Significant progress has been made with the Leap card, real time passenger information, and the national journey planner that maps all public transport services across the country. The provision of Wi-Fi wireless networks on trains and buses has also improved the transport experience. The NTA will continue to advance these consumer-friendly initiatives which make using public transport more attractive. The public transport experience has improved significantly and that is where we must target our efforts in future.

I thank the Minister, but he is missing the point. He suggests that if consumers purchase Leap cards they will make savings. If all consumers were to do so, the CIE group of companies would have a bigger financial difficulty. The price increase is necessitated by the 7.4% decrease in the Government subvention under the public service obligation subvention to the companies this year. In addition to the increase in the cost of fuel, this is placing a significant burden on the group of companies providing the service. The Minister and the Government must decide what kind of public transport network they want in this country. They must decide whether they intend to fund it from the central Exchequer in a manner that meets the needs and expectations of the consumers. It seems that much of what the Minister hints at as a solution is that he expects the group of companies to reduce the service and cut costs to the point at which the service that is delivered will not meet the needs of consumers. Ultimately, this will force people away from public transport.

A huge effort has been made over recent decades to bring the level of service to the point at which a modal shift takes place. People left their cars and moved towards public transport. The Minister is dismantling this step by step.

It is always important to remember that public transport remains heavily subsidised, with the exception of Luas and the private bus services. While someone who cycles, walks or uses the car to get to work pays the full cost, people who use public transport are subsidised by the State. It is important to bear that in mind. If people had to bear the full cost, fares would be much higher than they are. The reason fares are going up is due to the decrease in passenger numbers as a result of the economic situation, an increase in fuel costs and a reduction in the public service obligation. Also, we have not been successful in bringing about the required cost savings quickly enough. We are making good progress in those areas. Passenger numbers have stabilised as the economy is recovering. Fuel costs are not rising. In my submission to the next comprehensive expenditure review, which kicks in from 2015, I will ask for no further cuts to the PSO. We are now seeing progress, with cost savings yesterday in Dublin Bus, and that will be required in Irish Rail in the coming months.

I am not sure how the format works. I thought both Members would share the question. Many issues have been addressed.

It does not work that way. Only the first Deputy in the group will introduce the question. I ask Deputy Ellis to put his question.

We all know we have an economic crisis and everyone must cut their cloth according to their measure. Increasing Dublin Bus fares by between 15% and 25% and the price of prepaid tickets by 9% will discourage many people from using public transport. Increasingly, public transport is being hit. The subvention has been decreased year-on-year and we have one of the lowest subventions in Europe. This is having a major impact. In the cost-cutting exercise undertaken by Dublin Bus, we have seen a number of routes being cut or changed. This inevitably leads to passenger losses.

A question, please.

We have had major increases in fuel costs and there is also inflation. What will the Minister do to address the passenger losses?

Will these prices continue to be increased in order to bring in money? It does not make sense.

The average cash fare increase approved for Dublin Bus is 8.9%, but the Leap fare increase is substantially lower. I encourage people to move to the Leap card or Leap card products. Dublin Bus passenger numbers are stabilising and have stopped falling. This is a positive sign of the economy beginning to recover. In the next couple of weeks the cost savings which eluded us in the past 16 months will be achieved because of the decision by SIPTU yesterday not to engage in industrial action. It has been quite a struggle, frankly, for the past two years to put things in order, but the situation is looking better in the case of Dublin Bus and Bus Éireann. At the time of the next comprehensive review I will be proposing to the Government that there not be further reductions in the PSO subvention from 2015 onwards. I agree with the Deputy that the fare increases of recent years are not sustainable in the long term. There may need to be increases every year or two but certainly not of the scale seen in recent years. I take the Deputy's point in that regard.

On the same point, the big difficulty is that a point will be reached at which the fares will be at such a level that it will not be possible for people to continue to pay them and I predict they will revert to using cars and move away from using public transport. The Government must be prepared to carry out a comprehensive review of the public transport system and try to understand what level of State investment will be needed to ensure it remains intact and continues to meet the needs of consumers. Will an impact analysis of the recent price increases and the reduction in the PSO subvention be carried out?

The Minister has stated there will not be further reductions in the PSO subvention from 2015 onwards. However, this does not account for what will happen in 2014. Further cuts will have a significant impact. The fare increase of 8.9% will amount to a couple of hundred euro a year for most regular commuters who cannot afford cars in many cases. The vast majority of those who use public transport use it because it has been the cheapest method of getting around. The regulator seems to set the fares, but I ask the Minister if he has any input. Does the regulator decide on the fares and the Minister is not informed? I accept that the regulator is independent. To be honest, I find it very difficult when we are trying to encourage the use of public transport that the regulator sets the fares and that we kick to touch by saying we have no input or no way of influencing the process.

The Oireachtas transferred the power to make these decisions from the Minister to the regulator. I have conversations with the regulator, with whom the legal power rests. The impact analysis is made every year by the National Transport Authority as part of the fare determination process. To clarify the matter, I will be proposing to the Government that there be no further cuts in subvention from 2015 onwards. I am not saying that is a Government decision yet; it is a proposal I will make as part of the next comprehensive spending review which will be under way in the next couple of months.

Deputy Timmy Dooley's question relates to what economists like to call the elasticity of demand; if the price is set too high, the numbers using the service will fall. Of course, they can, but so far this has not happened. Dublin Bus passenger numbers have stabilised, while Luas passenger numbers are increasing. There is a slightly trickier picture with regard to Bus Éireann and Irish Rail, particularly on intercity services. If we continue to increase fares at the current rate, we will see a fall-off in passenger numbers. That is why I am restating my view that in the coming years it is not sustainable for fares to be increased at the rate they have been increasing in recent years.

Top
Share