I propose to take Questions Nos. 97 to 99, inclusive, together.
Compliance by Bus Éireann with the European Communities (Financial Transparency) Regulations 2004 (S.I. No. 693 of 2004) is a matter for the Department of Transport, Tourism and Sport. I understand O.J.E.U. of 15.9.2007 dealt with a complaint by The Irish Coach Tourism and Transport Council concerning alleged unlawful State aid granted to the Córas Iompair Éireann (CIÉ) bus companies, Bus Éireann and Dublin Bus by the Irish Government in form of grants under the National Development Plan. It concerned the financing of the public bus transport services (annual operating compensation payments, upgrading and replacement of buses), and furthermore, the financing of the transport infrastructure (passenger activities and bus garage at Harristown) and disability awareness training in Ireland for the period 2000 to 2006.
The complainant alleged that the financing of the measures detailed therein by the Irish authorities may have involved unlawful State aid.
The findings were inconclusive and did not make any recommendations regarding the operation of the free travel scheme operated by the Department.
The Free Travel scheme was introduced in 1967. It is not operated as a public service obligation (PSO) and it does not confer any real financial advantage on participating transport undertakings or place participating transport undertakings in a more favourable competitive position as regards non-participants. The scheme operates in an objective and transparent manner and on the basic premise that participants should be left no better or worse off as a result of the existence of the scheme. To this end, compensation under the scheme is calculated on the basis of fares foregone at a reduced rate to take account of travel generated by the free travel scheme. Those operators which participate in the scheme receive a payment
from the Department significantly below the standard fare whereas those operators which do not participate in the scheme are free to charge full fare for all passengers. Operators and routes
have to be commercially viable in their own right and cannot rely on payment from the free travel scheme as some form of subvention.
The free travel scheme permits free travel on most CIE public transport services, Luas and a range of services offered by over 80 private operators in various parts of the country at an annual cost to the exchequer of some €76 million in 2013. This Department also provides limited funding of €1.5 million for the Rural Transport Programme (RTP) but organisation and development of the service is a matter for the National Transport Authority.
The Department pays the CIE Group centrally in respect of transport services provided nationwide by the Group for pensioners and other categories of eligible customers under the free travel scheme. The apportionment of payment between the three constituent companies, Bus Eireann, Bus Átha Cliath and Iarnród Eireann is a matter for the CIE Group to determine. Under the Programme for National Recovery 2011-2014, expenditure on the free travel scheme was capped at 2010 levels. Prior to the imposition of the cap the rate of payment was reviewed regularly having regard to authorised fare increases and services provided.
Information on payments to CIE from 2003 is set out below. The additional data requested will require further work and will be forwarded separately when it is to hand. Payments are made monthly to the CIE Group on receipt of invoices. The monthly amount varies only slightly; accordingly, the total amount paid each year since 2003 is set out below:
|
Year
|
Annual
€
|
|
2003
|
45.6m
|
|
2004
|
46.7m
|
|
2005
|
48.8m
|
|
2006
|
50.6m
|
|
2007
|
52.6m
|
|
2008
|
56.4m
|
|
2009
|
61.2m
|
|
2010
|
61.4m
|
|
2011
|
61.4m
|
|
2012
|
61.2m
|
The following information was provided under Standing Order 40A
The free travel scheme is a long standing arrangement in place since 1967 following extensive discussions at the time with CIE. Compensation under the scheme was calculated in advance on the basis of fares foregone at a reduced rate to take account of travel generated by the free travel scheme. The original objective was that compensation payable should not exceed what is necessary having regard to the costs incurred. Over the years there were negotiations to increase the benefit and value of the scheme and to reflect the development of the transportation infrastructure e.g. introduction of DART, LUAS and removal of the restrictions on free travel during peak hours. These arrangements would have been finalised by an exchange of letters rather than any formal contract. The rate of payment prior to the cap on expenditure was also reviewed regularly and adjusted on the basis of changes in rates of fares. Peak travel time restrictions for all CIE bus services, i.e. Bus Éireann and Dublin Bus, were completely removed effective from September 2006 at an additional annual cost to the Department of Social Protection of €1.15 million.
Luas joined the free travel scheme in May 2004. At this time the additional cost to the Department was estimated at €1.2 million in 2004 and €3.1 million annually. This additional cost to the Department was offset by a reduction in the payment to be made to the CIE group because of the displacement of free travel pass holders to Luas services who would otherwise have travelled on Dublin Bus services. The Department reduced the payments to the CIE group in 2004 by €0.54 million (€1.4 million in a full year).
Since the imposition of the cap on expenditure on the free travel scheme at 2010 levels under the Programme for National Recovery 2011-2014, the Department has not given any increases to travel operators in the scheme and neither has it allowed any new routes or new operators into the scheme.
The Deputy in PQ 4726/14 makes reference to State aid rules European Communities (Financial Transparency) Regulations 2004 (S.I. No. 693 of 2004), it should be noted that the free travel scheme has been in operation since 1967, therefore predates Ireland joining the European Communities in 1973. Thus, even if the scheme amounts to State aid (which it is not accepted that it is), it constitutes “existing” aid under Articles 17-19 of Regulation 659/1999.
The free travel scheme is currently the subject of an interdepartmental review which is expected to be completed shortly. This review is designed to ensure the future efficiency and effectiveness of the scheme and will include examination of the extent and operational nature of services being provided.
Finally, I undertook to furnish additional data, the rebate values of payments made to Bus Éireann for free travel services from July 1997 to 2002
in my original answer to these Parliamentary Questions and this work is still in hand and will be provided to the Deputy as soon as it is finalised.
