I welcome this opportunity to meet the committee and to answer any questions members may have with regard to Bus Éireann and road passenger transport in general. I am joined by my colleagues Tim Hayes, business development manager, and Martin Nolan, finance manager and company secretary.
Bus Éireann is a member of the CIE group of companies and its statutory mandate is to provide road passenger services throughout the State and outside the State with the exception of city services in Dublin. The Transport (Reorganisation of Córas Iompair Éireann) Act 1986 states: "The board and the companies shall have due regard to the board's social role and the need to maintain public transport services integrated to the maximum extent possible within the financial resources available to them." This is a very important statement.
To meet this mandate, we provide an integrated and responsive range of services, principally inter-urban expressway, provincial city and town services, and rural and commuter services. We also manage the schools transport scheme on behalf of the Department of Education and Science. Total revenues in 2002 were €224 million. We employ 2,600 staff, of whom approximately 1,800 are drivers. Approximately 25% of all services are provided by private contractors at a cost in 2002 of €60 million.
In the past two years, road passenger journeys have increased by 15% from 40 million to 46 million, while in most other western European countries, numbers have declined. We have recognised for some time the changing environment in which we operate and have been shaping ourselves to meet the increasing challenges we face now and will obviously face in the future. We have agreements with our staff which have improved efficiency. For example, we have improved resource utilisation. We have removed demarcation so that we have multi-skilling in garages. We have increased flexibility, having extended the use of contracted private operators. We have also introduced extensive training and development programmes such as advanced driving, disability awareness courses and strategic management development.
Bus Éireann has, historically, been financially sound. Since its inception in 1987 it has invested €129 million in fleet and equipment, with State grants accounting for €26 million of this sum. However, the accelerated major expansion of services under the NDP resulted in 2002 in losses of €9 million. That was considerably less than anticipated halfway through the year. It also eliminated our cash reserves, which at the beginning of the NDP stood at €20 million. Our 2003 business plan shows Bus Éireann returning to break even and we are currently on target to do so.
The major factor in Bus Éireann's success is quality of service in the form of significant increases in the range and frequency of service, better vehicles, customer information and so on. Our customer satisfaction rating has improved year on year. We have introduced a wider network and increased departures. The average age of vehicles in the road passenger fleet has been reduced to less than four years and we have undertaken an extensive programme of bus station development. I have included in the report some charts relating to our customer service. Information has also been supplied relating to an independent survey produced recently.
Our IT developments include an Internet journey planner and the first on-bus validation of e-ticketing in Europe, introduced a few months ago. Bus Éireann operates expressway services on an extensive network integrated with local services utilising private contractors to supplement our own resources. We have continued to develop clock-face hourly services operating on the main routes such as Dublin to Limerick and Galway, Galway to Limerick and Cork and Tralee to Cork and Waterford. For example, one can get a bus every hour from Cork to Waterford, Tralee, Killarney, Limerick and through to Galway. There are also two-hourly services from Cork to Dublin and to west Cork.
Ticketing on our services is fully integrated. Customers can purchase one ticket at the start of the journey, which gives a discount over the sum of the individual journeys undertaken. Additionally, time tables are interlinked to provide onward connection. A good example is Dingle-Killybegs, which includes two local services and three expressway services. The committee has been supplied with a chart showing that the journey for through tickets would cost €26 for a single fare, while a single ticket booked for each of the individual journeys would cost about €57. The return fare is €41.50 for the through ticket, compared to €91.50 for tickets bought individually, so there is considerable integrated discounting coming into play on all services throughout the country.
In the past two years, at the request of Government, we expanded commuter and provincial city services significantly to cater for the key objective of modal shift. Dublin commuter services increased by over 50% as did some regional commuter services such as Limerick-Shannon, Tramore-Waterford, Kinsale-Cork and Oranmore-Galway. Peak frequency services every 15 minutes were introduced, for example, on the Kells-Navan-Dublin route, where we have 25 vehicles carrying 1,200 customers at peak, and Drogheda-Balbriggan-Dublin, with 40 services per day each way. The provincial city services, that is, in Cork, Galway, Limerick and Waterford, were increased by over 40% and frequencies on some routes were more than doubled, for example, Grange and CIT in Cork, Lisbeg Lawn in Galway, Clareview-Coonagh in Limerick and Brownes Road in Waterford.
We introduced additional town services in Navan, Athlone, Sligo, Dundalk and Drogheda. These increased services, particularly the additional peak hour services, have increased losses in the business. They are inherently loss-making in any business. The last decade has seen significant expansion in local and rural services, such as Ballina to Killala, from eight to 18 buses per week, Sligo to Manorhamiliton from ten to 22 buses per week and Tralee to Killorglin from eight to 35 buses per week. Additionally, 40 one-day-weekly services utilising school transport resources have been developed, for example, Kilcrohane to Bantry and Feakle to Ennis in County Clare.
In Bus Éireann we are very conscious of the need to demonstrate that we are providing value for money, both to the customer and the taxpayer. Our fares are low compared to European averages.
Since 1990 they have increased by approximately 25%, while CPI has increased by almost 40% and payroll inflation by almost 50%. We provide extensive discounted through-ticketing in addition to student, daily and monthly returns and multi-journey discounts. The subsidy we receive in respect of public service obligation is also low by European standards. The schools transport scheme caters for approximately 135,000 children twice daily. The services are provided in accordance with the instructions and guidelines of the Department of Education and Science. Private Contractors carry approximately 50% of those pupils and are paid 55% of the scheme's cost. Bus Éireann is responsible for the application of standards and controls agreed with the Department and closely liaises with schools and the Department regarding the safety and care of children. Various reports have concluded that Bus Éireann provides the most effective and efficient management of schools transport.
Bus Éireann has developed its customer-focused business, via partnership with staff and Government agencies, into an effective and efficient transport management operation. That involves effective network design and management in conjunction with efficient operation, continuous improvement of systems and processes, subcontracting and so on. For the future, Bus Éireann's strategic plan outlines improvements in service frequency and capacity across its range of services and bus station upgrading at Busáras, Cork, Galway and Sligo. The key focus will be on customer care, efficiency and effectiveness.
We are targeting cost reductions associated with traffic congestion through bus priority measures which will also facilitate modal shift. Incidentally, the first meeting for traffic congestion measures outside Dublin takes place tomorrow in Limerick. Traffic congestion cost Bus Éireann €18 million in 2002, taking average European speeds into account. Critically, we will continue our focus on the safety and well-being of school children with the Department of Education and Science.
We have benchmarked ourselves with other operations throughout Europe. Bus Éireann is a high class operator by international standards, providing high quality, customer focus, improved frequency and a range of services in an integrated network. Bus Éireann continues to provide value for money to its customers and the taxpayer. It is increasingly flexible, efficient and effective and has made considerable progress via partnership in recent years. The company will continue to respond to the market through continuous change.
