Tuesday, 6 November 2018

Questions (61)

Imelda Munster

Question:

61. Deputy Imelda Munster asked the Minister for Transport, Tourism and Sport to outline the rationale for the continued privatisation of the public bus network, in particular, the latest tranche of Bus Éireann routes to be put out to tender, in view of the fact that the first privatisation effort has only begun and has, therefore, not been subject to a performance review. [45720/18]

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Oral answers (10 contributions) (Question to Transport)

What is the Minister's reaction to the continued privatisation of our public bus network and, in particular, the latest tranche of Bus Éireann routes to be put out to tender? What is the Minister's reaction in view of the fact that the first privatisation effort has only begun and has, therefore, not been subject to a performance review?

I thank Deputy Munster for her question. The current direct award public service obligation contracts with Bus Éireann, Dublin Bus and Iarnród Éireann expire at the end of November 2019. It is a statutory function of the National Transport Authority, under the Dublin Transport Authority Act 2008 and Regulation (EC) No. 1370/2007, to award PSO contracts and to determine the appropriate mix of directly-awarded and competitively tendered PSO services. It is incorrect to describe competitive tendering as privatisation as nothing is being sold, services are not being deregulated and control remains with the NTA.

The NTA is required to follow a statutory process underpinned by EU and national legislation before the direct award contracts may be renewed. As part of this process, the NTA launched a public consultation process in early October for the bus services contracts. This will inform its forthcoming decision on the renewal of the contracts, including the decision relating to the direct award and competitive tender balance of contracts. Dublin Bus, Bus Éireann, users of bus services and other stakeholders were invited to make submissions on the NTA proposals. The closing date for submissions was 30 October 2018.

As the Deputy is aware, the NTA is proposing to directly award to Dublin Bus an equivalent service level that the company will have at December 2019. The NTA is proposing to directly award to Bus Éireann an equivalent service level that the company has in December 2019. Furthermore, the NTA is proposing to amend that contract in 2021, reduce it by up to 10% of services and provide the removed services through a separate contract following an open competitive tender process. Should the NTA decide to competitively tender 10% of Bus Éireann services, it will be open to Bus Éireann to tender for these services if the company so wishes. The Deputy will recall that Bus Éireann was successful in the recent competitive tender competition run by the NTA for the operation of five city bus routes in Waterford city.

The new direct award contracts proposed by NTA will provide a guaranteed level of PSO funding to Dublin Bus and Bus Éireann up to 2024. The PSO programme represents significant expenditure of taxpayers' money and has increased by some 35% in the past three years. This year €285 million in funding has been allocated toward funding our PSO services.

Additional information not given on the floor of the House

I remind the Deputy that all public transport services, whether provided by direct award contracts or through competitive tender, will continue to be regulated by the NTA so that Leap services, free travel pass, real time information, etc., will all continue to operate on these services and fares will continue to be regulated by the NTA.

The NTA has statutory responsibility to award PSO contracts and to determine the appropriate mix of directly awarded and competitively tendered PSO services. Under law, this is not an area in which the Minister has a role. Following the conclusion of the NTA's public consultation process, I understand the board of the authority will take its decision on this issue later this month.

This is privatisation, despite what the Minister says. It is the start of the privatisation route. Our public transport network needs to be protected. It is a public service. It is about connecting communities and urban and rural areas. It provides a lifeline to rural Ireland and is also better for the environment. Public transport is not supposed to be about profit. It is supposed to be about providing a public service. We need to invest in our public transport network rather than trying to tear down Bus Éireann.

The Minister is going ahead with the plan to place the next tranche of Bus Éireann routes out to tender despite the fact that there has been no review. He is not even waiting to see whether his first privatisation effort was successful. I am sure the Minister has done his research but he need only look across the water to see the disaster privatisation was over there. It appears he is jumping the gun in his eagerness to tear down our national carrier, Bus Éireann. Where will it all end?

I thought I had nailed the lie that this was privatisation. I thought Deputy Munster would know that this opening of the bus market is not privatisation. If she can explain to me what is being sold, I will listen to her. Nothing is being sold. None of the assets is being sold, as Deputy Munster knows full well. The privatisation scare will continue to come into this House as long as the Deputy does this. I hope she survives it because the privatisation scare simply does not hold any credibility. What is happening here is the allocation of some direct award contracts and some competitive tender contracts. These are running at approximately 10% in some cases. What we are seeing is a continuous attempt to dub this as privatisation. It is not privatisation because not a single State asset is being sold. What we are seeing is a certain amount of competition entering the market, which is welcome.

I agree with a good deal of what Deputy Munster said and I share one of her interests in this matter, namely, that this should not be about profit. I want to see revenue being generated and the companies doing well, but not primarily for the purpose of profit. I want passengers to get the most out of these companies. That is the objective and that is why we are putting these routes out to tender.

I beg to differ with the Minister. The most profitable public transport routes are being sold, notwithstanding what he says. Does he accept that his privatisation agenda for our public transport routes will ultimately cost the State, just as it did elsewhere when public services were privatised?

I imagine the Minister is aware of reports and findings from across the water which clearly show that Britain's privatised bus system is a source of widespread and justified disgruntlement. The system is described as an overpriced, inefficient, poor quality mess. When privatisation commenced in Britain in 1986 it was with the promise that, as the Minister might say, more people would travel. However, the number of bus trips taken in cities outside of London subsequently collapsed from 2 billion per year to 1 billion per year. Britain's bus privatisation story, or disaster, is one of profit before need. It is a dismal tale for those who believe that the private sector automatically trumps the public realm, a view shared by the Minister. It should serve as a stark warning to him when he looks across the water and sees exactly what has happened there. Privatisation eventually cost more, especially in the London area. The Minister already knows that but it is as if he does not care and has decided to leave a mess for someone else to clean up afterwards.

Maybe Deputy Munster would like to do it. If she does not know the difference between privatisation and competitive tendering, she would not be able to sit in this seat for too long.

I will not take the route the Minister has taken in any case.

There is a major difference. The Deputy says the most profitable routes are going out to competitive tender. She did not use that term but that is what is happening. The next Bus Éireann routes the NTA is proposing to put out to competitive tender are those which are low-performing. It proposes to tender these routes, which serve the Dublin commuter area and the eastern region, in 2021. The level of customer services on these routes has been below performance targets. Let us not get that point wrong as well. Deputy Munster can get one thing wrong but to get two things wrong in one minute is rather a lot.

The Minister has exceeded his allotted time.

It is not about profit. It is about social need on routes that are not profitable and keeping them going for the good of the community. That is what the NTA is doing and that is the reason the PSO subvention increased by 36% in the three-year period from 2016 to 2018. Deputy Munster complains that we are somehow running down these routes and the companies in question when the opposite is the case. We are committing more and more capital and money to them.