Charities Appeal Tribunal: Chairperson Designate

I welcome

Mr. Hugh Creegan

We are very conscious of the need for competition. It is a requirement in the legislation that we should have a regulated competitive environment here. We are very careful with every single licence application we get. I remind the committee that applications come into us from third parties. We consider each one carefully to identify its overall impact. We consider whether it will be beneficial for all transport users along the relevant corridor. We consider whether it will affect the public service obligation, PSO, service, if that is a factor. Many balancing items have to be taken into account. Nobody can say they get it right all the time, but we believe that, on the whole, we have struck a balance that reflects where the legislation is meant to bring us. Perhaps my colleague, Mr. Gaston, would like to expand on that.

Mr. Patrick O'Connor

I am pleased

I would like to ask another question before Mr. Gaston comes in. I assume licences are issued for particular periods rather than in perpetuity.

Mr. Hugh Creegan

They are issued for three years.

Has the NTA ever failed to renew any of the licences it had issued on the basis that the best decision was not made on day one? We recognise that not everyone gets it right all the time.

Mr. Tim Gaston

Every application we receive for a new licence or a licence amendment is treated in the same way. Rather than failing to renew licences, we apply the same set of tests and criteria, as mentioned in a question that was asked earlier. We ascertain the level of demand or potential demand on the relevant corridor for an increase in public transport activity on the back of the relevant licence. We apply those tests to all licences that are issued to Bus Éireann, commercial operators and other operators. That is what the legislation requires us to do. We have to take account of the demand or the potential demand for services. We refuse licences from time to time. We occasionally have discussions with the operators involved to discuss whether their licences might complement services that are operating in certain corridors if they applied to different times of the day or the week. We would argue that we have the numbers to illustrate that we have been able to increase the total public transport market by means of controlled and regulated competition. There are many examples of corridors where we have chosen not to continue to grant licences or amendments because we believe they are adequately provided for. We have taken both actions.

I thank Mr. Nolan and Mr. Creegan for their presentations. I would like to begin by asking about the issue of school runs. How often are the routes reviewed? I recently met the family of a five year old boy in respect of whom an application was made in advance of his starting school. They were told he would be on the bus route and they made the relevant payment, but when they went to the private provider, they were told he would have to be picked up a kilometre up the road. Obviously, a five year old boy is not going to walk that far. His mother feels that if she has to put him into the car, she might as well drive him to school. When we did a bit of investigating, we found that a private coach operator had been hired by Bus Éireann. Obviously, this operator must take the route it has been told to take. The members of the boy's family did their own investigation and provided a new route, which is safe, is a kilometre shorter and goes past their door. They asked for this to be looked at, but their request was not even addressed. I wonder how often the routes are reviewed. If a solution is found, as it was in this instance, can it be looked at or are these matters set in stone?

Obviously, as Deputy Dooley has said, the witnesses have a very difficult job. People are happy with express routes because they want to get to or from work, but such routes often leave out people in smaller towns who want to get connected. Mr. Nolan gave an example of a case in which a solution was found by looking at other routes and rearranging them. Is that being done for all the routes that have been changed? For example, the 115 route between Dublin and Mullingar used to cover the area between Dunboyne and Summerhill in County Meath, but four locations - Moynalvey, Culmullen, Kilcloon and Baytown - are now excluded and the people in those places feel they are being left out. Do the witnesses review cases like that? Do they look to see what other services might be provided for the people of such areas?

How are the prices for the various routes decided? I would have regularly travelled from Navan to Dublin when I was younger and when I was in college. I know that a one-way ticket from Navan to Dublin now costs more than €11, whereas one could travel a lot further down the country for a lot less.

Is it decided on the basis of proximity or the number of people who use the route? How is it arrived at?

If a new bus stop is being sought on a route, what are the requirements? We have a number of requests in Navan where a service is required. How can people apply for that and how is it decided?

Mr. Martin Nolan

On the Navan route, we do that under contract to the NTA so both of us will come in on that.

We review school routes constantly. We carry out a major review every summer when sixth years go out and first years come in. On the question of a five-year old child having to walk 1 km, I would probably be concerned about that myself. In general, we try to pick up primary school children as close to their homes as possible. We also have pick-up points for post-primary students. If the Deputy gives me the details, I will examine the specific case.

There have been changes on the 115 route in conjunction with the NTA. We review all of these routes constantly where there are changes on them. There are regular meetings at which we go through the routes. We have gone through that specific route with the NTA. The NTA also comes to us with its changes and Mr. Tim Gaston will come in on that. Prices are all agreed with the NTA. In general, it depends on the number of people on the route and the distance they are from the location. On the Navan route, there is a great deal of peak time travel. It is more expensive to put peak time travel in when there is a lack of business during the day. On Expressway or intercity routes, there is business all day. On the Navan route, however, the peaks decide the level of service put in place.

Buses from Navan generally leave about every half hour or hour. The town is quite close to Dublin but the prices are a lot higher than would be the case if one was travelling to Galway or Sligo.

Mr. Martin Nolan

It has to do with the loadings on the buses in that in general we fill the Expressway buses.

Mr. Tim Gaston

I might come in on two things. The Deputy referred to network reviews. We have a group within the NTA whose sole purpose is to review the networks continually. We are taking on board comments being made in respect of the entire range of issues. As well as detailed discussion with Bus Éireann and looking at the bus loadings, we also take account of what other local provision there is in the area. With the NTA also having responsibility for rural transport, we are working increasingly to dovetail the services. As such, where a PSO operates or changes are introduced prior to that, we will discuss it with local transport co-ordination unit management to see and ensure that communities continue to be served. As such, networks are being reviewed on a regular basis and the two teams - our own and Bus Éireann's - meet on a very regular basis to see where we can bring about improvements. Improvements are not really driven by the bottom line either. They are actually about providing a better service through the day, through the week, through the time of day and in terms of the geography. Of course, we have to take account of changes in geography and the community. It is very much an ongoing process. If there are specific queries members want us to address, they should let us know and we will come back to them on those.

Fares for public service obligation services are determined by the authority. Again, we engage in detailed discussions with operators and model - in advance of a determination - the fare increases to see if they are appropriate and what will be the fare adjustment. We are in the middle of an exercise involving a number of areas of the country to see if we can move towards a more equitable fares basis nationally. It is a difficult challenge to meet, of course, and it is something that it will take a number of years to put in place. If one looks at our fares determination issued last year, one will see that in some areas there were very small increases as we are setting about rebalancing fares. It is something we look at very closely with the operators. While we look at the loadings, fares in Ireland are based, by and large, on distance. Within the eastern region, there is a zoning arrangement with Bus Éireann. Since we have rolled out the Leap card in the eastern region, significant discounts have been available to those who choose to use them to travel on Bus Éireann and other services.

Mr. Martin Nolan

The tax-saver product allows people to get the service at half the price we are talking about. As such, €11 is the upper end of the scale. Anyone who uses the bus regularly can do so much more cheaply on a monthly or yearly product basis or by using a Leap card.

I also asked about two specific requirements for bus stops in my area.

Mr. Martin Nolan

That can be put to either of us. We can talk about it between us.

I am grateful for the presentation. It is heartening to see that the number of passengers has increased by 700,000. Do we have a target for how much we want to increase those numbers? It was stated that there was a loss in 2015 but the numbers are increasing. Where will the 116 new vehicles be concentrated? While they are all wheelchair accessible, how does it leave the fleet in terms of wheelchair accessibility? I am not sure if we are up to 100% and I would like the witnesses to give us an idea of where we are in relation to that very important issue.

The last time the witnesses were in, we talked about routes 5 and 7 and the serious effects on the local communities. There were direct connections through private transport. The witnesses are saying now that the agreement that has been reached there has helped. Can it be explained because I was not following it too well and would just like to get my head around how much of an impact it has had? We had a lot of complaints from people in the communities along the routes.

Tendering for some of the routes was mentioned. I remember that when we argued about this before, the Government was talking about putting 10% out to tender. However 100% of Bus Éireann routes in Waterford was mentioned. If we are going to tender those and will give up 100%, what are we aiming to do in Waterford? I would like to know what we are trying to do. Is it the intention to privatise that whole section or is Bus Éireann going to tender for the service also? I would like that to be explained to me because I find it a bit contradictory.

Have there been huge savings in fuel costs? I would have thought that there would have been massive savings with the way fuel prices have gone which would have helped in terms of targets. The Minister tells us that the PSO is remaining the same. When I was reading some of this earlier, I noted that there were to be changes in the PSO for Kerry and Mayo. Those are planned to be implemented in the near future. How will that impact on those areas? Will the changes affect services and will there be cutbacks in some of the routes? Will the routes be more direct?

Can the witnesses explain how the community has an input in all of this? Do people go out to talk to the community? What way is it done? I know there were meetings on routes 5 and 7. When it is intended to do something new and areas are being considered, is there direct contact with the community?

Mr. Martin Nolan

I will take some of the questions and we might approach others jointly. Passenger numbers on the PSO side have been very good in the last number of years, but it has been patchy in some areas. There is more growth in Dublin and Cork than in rural Ireland. The provincial cities grew by 4% last year and Cork alone is up by 8% or 9% in the last couple of months. We anticipate similar growth this year. The vehicles that are coming in will be deployed across the whole network, but there are specific places that require additional capacity. We are putting additional double-deck vehicles into Cork and taking out single-deck vehicles. There will be additional capacity around the greater Dublin area given what has happened in terms of congestion. We need to put a bit of capacity in there in conjunction with the NTA.

We are 100% wheelchair accessible at this stage and well ahead of most of Europe on that, which is very pleasing.

There are no losses on the public service obligation services, but Bus Éireann has made losses on the commercial services. There is a distinction between commercial and PSO services. The intercity service is commercial and must always come back to profit. We will bring it back to profit. I ask Mr. Tim Gaston to speak on routes 5 and 7.

Mr. Tim Gaston

Before I speak about the routes, will Mr. Nolan comment on fuel?

Mr. Martin Nolan

In our business we need certainty and we buy forward. We buy both the dollar and fuel forward. At present we have bought it at about €1.20. We bought at that price when the price at the pumps was €1.50 so it was a very good deal but the cost of fuel has now gone down to €1.10 or even a little lower. We have bought all our fuel for the next 18 months. We are looking 18 months out in the market. In general, the market does not give those type of prices 12 to 18 months in advance. There will be some reduction in the cost of fuel, but the price is very low price compared to the price at the pumps. There will be some reduction in the price of fuel as time goes on.

Mr. Tim Gaston

I will respond to the Deputy's questions on routes 5 and 7. It is correct that there were a number of public consultation meetings and representations were made to us, to Bus Éireann and to others at the time. We organised a number of discussions and then reviewed the entire network requirements in those immediate areas. We came in with a package of services that would deliver to the communities that were being impacted on by the withdrawals. There were three main ways by which we delivered. We modified some of the PSO services in those areas to bring in additional communities. Through discussions with the transport co-ordination units, we also put additional funding, something of the order of €300,000, into the rural network to support additional services in that area. We also took out a couple of small services that were not being met by either of those two options. We went to the market and providers came in and those services are now up and running, all being provided by local businesses. Through a network of mechanisms and packages of solutions we had, we were able to configure things to provide services to those communities. The level of commentary back to the National Roads Authority has fallen very significantly. We would consider that to be a successful delivery.

On the question of tendering of routes, a decision was made to tender 10% of Dublin Bus and Bus Éireann services to the open market. The process of tendering really required us to put together packages of services that could be delivered by another provider coming in, so the decision was made to take 10% and split it into two specific packages on the Bus Éireann services. One of those packages is a number of the services in the Waterford area. When a new provider is coming in, it makes sense that it should have a locality in which to have a base. We have chosen two for the Bus Éireann bus market opening exercise, the Waterford area and the Kildare corridor. About 7% of the Bus Éireann activity would be the Kildare corridor services and about 3% of the Bus Éireann activity would be in Waterford. Those packages were put out to the market last year and that procurement is still continuing.

Deputy asked specifically about PSO funding. Mr. Martin Nolan has touched on this in his response. In fact, the Department and the Minister for Transport, Tourism and Sport have granted the NTA additional PSO funding for 2016. We are in the process of again working with Bus Éireann, Dublin Bus, Irish Rail and the transport co-ordination units to see where we can expand and bring in additional services. The Kerry area was reviewed last year and an additional network of services was provided in Kerry to bring about improvements. We are looking at present at a number of other geographical areas across the country, which we will bring in as quickly as can be done sensibly within the PSO and the rural transport network, using the transport co-ordination units.

On the question of community input, that comes in a number of ways. Representations come to the National Roads Authority and we regularly meet community groups, local representatives and so on. One of the strengths of the rural programme continues to be the extent to which local people are involved in the transport co-ordination units, TCUs. Each TCU has its own board, comprising people who give of their time voluntarily to contribute to the discussions as to how best those local needs are meet. We then contribute to the funding of their services and we give guidelines and get involved in network planning where it is appropriate to dovetail with other services.

The vast majority of the decisions that are important to the local community are made by the management of the transport co-ordination units, TCUs, guided by their local board. We welcome the very heavy local involvement and it is a significant benefit to have that local knowledge inputting into local decisions where local services are being provided.

In regard to the routes in the Waterford area that are being put out to tender and which are supposed to be 100% of the Bus Éireann routes, does the National Transport Authority propose to tender for some of the routes or will the tender process be confined to private operators?

Mr. Tim Gaston

We put that tender to the open market using the European procurement process. Bus Éireann is well within its rights to submit a tender through that process, as is Dublin Bus in regard to the tender for the Dublin area. I invite Mr. Martin Nolan to comment on Bus Éireann's role in that process.

Mr. Martin Nolan

Bus Éireann will be tendering for the routes in that area and for the Kildare corridor as well.

I welcome the representatives from Bus Éireann and the National Roads Authority. I wish to deal with intercity services provided by both Bus Éireann and other service providers and to focus on long journey times from Dublin to Limerick, Cork and beyond. Is there a requirement that toilet facilities be provided on board these coaches, be they in public or private ownership? If there is a non-stop service from Limerick to Dublin, which probably takes about three hours, is there a requirement to have a toilet on board as part of the licensing of the service? What inspection takes places to ensure that provision is adhered to?

Will the Bus Éireann representative indicate the level of profitability of the school bus service? I am aware that this issue was discussed by the committee on a previous occasion. What percentage of the profit, if any, from the school transport service is used for other services in Bus Éireann?

Over the Christmas period I as well as a number of people noticed a brand, Transport for Ireland, advertising on mainstream broadcast media. Will the witnesses indicate why this brand is being used? Transport for Ireland comprises four different companies. It seems to me to be a complicated branding initiative. What is it trying to achieve? What is being achieved? How much is the advertising campaign costing? Who is paying for that campaign?

I have raised the issue of intercity route corridors, specifically private operators who are going through provincial towns that are not bypassed. I have raised the issue in the context of the extension of licences that are granted for services from Limerick to Dublin and down into Kerry through Tralee and Killarney, passing through the towns of Adare, Newcastle West and Abbeyfeale, with Rathkeale and Castleisland being bypassed. What progress is being made in extending these services into these provincial towns and when can we expect to see a service change?

Mr. Hugh Creegan

I will deal with the branding issue, Transport for Ireland. The legislation setting up the NTA required it to develop a uniform brand for public transport in an effort to integrate public transport. That is what we are doing in Transport for Ireland. Transport for Ireland is meant to be the customer-facing brand that unifies across all the transport modes. The Transport for Ireland website is the place where one gets all the details of a journey planner, fares, services and so on.

The purpose of doing some advertising on it is to start to get out that message that public transport is being integrated under the umbrella of Transport for Ireland and that will grow in the years ahead.

I acknowledge the legislative requirement but for tourists and domestic travellers, between Leap, CIE, Iarnród Éireann, Bus Éireann, Luas, NTA, Transport for Ireland, and not to mention all the taxi companies, is it time a single name was used? Those who are not familiar with the airport when they land in Dublin encounter Aircoach, the green bus, Dublin Bus, Bus Éireann and if they look at their smartphones, they will come across Transport for Ireland. They will say to themselves, "This is a bizarre set up". When one lands in Boston or a European city, one encounters a single transport entity when one arrives.

Mr. Hugh Creegan

I do not disagree with the Deputy in the slightest. We have a challenge to develop what we started much further over the years ahead but we are dealing with the legacy of bodies that were set up decades ago and, therefore, it will take some time to change. We would like to get into the space he mentioned. That is where we would like to aim for.

Is that actively in progress? If the Luas, DART, commuter rail, mainline rail, Dublin Bus and Bus Éireann are to be integrated, surely something as basic as painting them all the same colour would be a start. However, Irish Rail has rebranded over the past three years at a cost and Bus Éireann has recently rebranded at a cost. The Leap card was introduced with another new name foisted on us at a cost. Every time there is a will to inject cash into one of the public transport services, a rebranding happens and that is not in keeping with what the NTA is trying to achieve, which is a single brand entity for transport Ireland. On top of that, there are the DART, CIE International Tours, etc.

Mr. Hugh Creegan

The space we are focused on is the subsidised services the State is providing. Certain companies the Deputy mentioned provide commercial services and we are not necessarily able to bring them under the same umbrella. The objective he set out is our objective but it will not happen overnight. It will take some time to achieve but that is the direction in which we are going.

I refer to the questions I asked about the NTA's requirement for toilet facilities and the extension of licences on the Limerick routes.

Mr. Tim Gaston

Toilets on board are not something we specify within the licence; they are not a licence requirement. However, a number of the providers, including Bus Éireann, provide toilet facilities on long distance coaches.

The NTA allocates a licence for a non-stop bus service between Tralee and Dublin, which could take four and a half hours, depending on traffic and, there is no requirement for a toilet.

Mr. Tim Gaston

There is no licensing requirement for a toilet on board the vehicle.

Is it adequate in 2016 that people could be stuck on a bus for four and a half hours potentially, with no access to a toilet?

Mr. Tim Gaston

I believe a number of the providers recognise that as a customer requirement and provide that facility.

Is it good enough that a licence is being awarded without a requirement for a toilet?

Mr. Tim Gaston

The licence and the legislation require us to nominate the starting and closing points of the journey, the stopping points along it and the timetable. That is the extent of the powers we have on the licensing. We do not get into the branding of the vehicle or other aspects of commercial services that are licensed.

The licence is awarded by the NTA and in many cases, vulnerable passengers are on board. Many passengers travelling from provincial locations are going to Dublin, for instance, for hospital appointments. It is not acceptable to expect passengers to travel from Killarney to Dublin without a toilet stop.

Mr. Tim Gaston

In the commercial world, that is a service that the operators will provide to their customers.

Is that not a matter for the authority, as the licensing agency?

The Deputy's point has been made.

It has not been heard. The licensing agency thinks it is appropriate to expect people to sit on a bus travelling between Killarney and Dublin in the full knowledge that the bus will not stop and there is no toilet on board.

Mr. Tim Gaston

It is not a licensing condition that we impose on operators at the present time.

It takes longer to travel between Killarney and Dublin than to fly between Shannon and New York. There are no toilets on these buses and there is no requirement to have a toilet on board. If Aer Lingus and Ryanair operated on that basis, there would be an outcry. I ask that this issue be reviewed.

I know elderly people who have no choice but to take a particular service. Some are elderly men with bladder or bowel problems and they have no option but to plan their journey well in advance. To be fair, a passenger paying a fare or availing of the free travel initiative should at least have the courtesy of knowing that if they get on board and they need to go to the toilet without having to stop the bus on the side of the motorway, they can do that.

I will intervene to be constructive. Could this issue be examined in future reviews of licensing criteria?

Mr. Tim Gaston

It is something at which we will look. We are required to undertake a review of the licensing regime this year in any event and this is something we will bring into that discussion on the back of-----

Do passengers who travel on non-stop Bus Éireann services that take in excess of three hours have access to toilet facilities?

Mr. Martin Nolan

A fleet of toileted coaches came in last year. We use them on the longer services. Most of our services are limited and include stops, so there are opportunities for passengers to go to the toilet. It is not necessarily a problem for us at this stage.

The company has non-stop services.

Mr. Martin Nolan

We go from Killarney and Tralee into Limerick and from Limerick to Dublin. Ballina to Dublin is our longest service-----

Does Bus Éireann provide a non-stop service between Cork and Dublin?

Mr. Martin Nolan

Our GoBé services do and there are toilets on those services.

Do those using Bus Éireann non-stop services have access to toilets?

Mr. Martin Nolan

In general.

What about Ballina to Dublin?

Mr. Martin Nolan

In general, yes. Ballina to Dublin is not a motorway service. Buses stop in various places, such as Longford, along the route and, therefore, there are opportunities for people to go to the toilet.

If the bus leaves Ballina and it is full and all the passengers are heading to Busáras in Dublin, it will not stop.

Mr. Martin Nolan

The bus will stop. It does not go directly. Road conditions are a factor. It is easy to use a toilet on a motorway but when roads are bumpy and so on, there are safety concerns regarding the speeds at which the buses travel. There are opportunities for passengers to go to the toilet, where appropriate, on or off the buses.

I asked about school transport.

Others are waiting.

I was waiting for the entire meeting. I did not leave and return.

I am following the procedure that was laid out at the beginning. We are only delaying ourselves with this.

Mr. Martin Nolan

School transport is a cost-recovery operation. There is no profit and there is cross-subsidisation involved. We say that every time we appear before the committee.

I thank the witnesses for their presentations. Bus Éireann buys diesel in advance at €1.20 per litre. The price of diesel is now down to 99.8 cent a litre in places. When it falls lower than that, will the company buy enough in bulk in order that it might save a great deal of money down the road? The price of oil is expected to fall to somewhere between $22 and $24 dollars. When the opportunity arises, will the company make sure it buys enough diesel in advance? A group appeared before the committee recently to discuss natural gas and Ireland's move to a low-carbon economy. They said buses would move to natural gas. Is Bus Éireann buying buses with that facility? It costs €18,000 to install the relevant technology.

On school transport, why was the old school rule abolished? It is causing many problems around the country. Another problem that crops up here and there, which I am sure every Deputy has encountered, is children attending schools that are further away from them than others. I am familiar with cases of bullying and other problems which meant the children had to move to other schools and they had to pay for their bus tickets. Is any change proposed in this regard?

The NTA is just waggling along with the Local Link service in County Leitrim and parts of County Roscommon and nothing is being done. We have been told schemes would be announced but nothing has happened. When will the service be provided? Who is making up the rules preventing buses from pulling up in different places? The approval of the local authority is needed. Who introduced that rule, which is causing problems?

I return to matters involving Bus Éireann. There are new rules for orange, yellow and red weather alerts.

I understand that during the flooding, if there were three to four inches of water on the road, there was an instruction not drive. I must compliment Mr. Nolan on how Bus Éireann staff dealt with a problem in Roscommon as the bus went round about to help children. Why is it the case that in adverse weather conditions of frost, rain or storm, the Bus Éireann school bus is stopped but the private operator will pick up the children? Different rules seem to apply.

I wish to put a question on tendering to both the witnesses from Bus Éireann and the National Roads Authority. Do the witnesses think the new procurement procedures fly in the face of common sense in that the detail of the description of how one cleans the bus and so on means that one is awarded more marks and therefore secures the tender, making an ass of the procurement system?

Mr. Martin Nolan

Will Mr. Creegan respond?

Mr. Hugh Creegan

We will take some of those questions. We have heard before about the problems caused by the rules for designating a stop. The responsibility for designating stopping places at the roadside rests with the local authority. We understand they have taken a conservative view in many places and are not allowing buses to stop at historic stopping points. We have decided to produce some guidance and send it to the local authorities and this might allow them to take some comfort from that guidance and go a little further than an individual on his own might be prepared to go.

I raised that issue before with Deputy Fitzmaurice and I am glad to see that common sense is being used. The issue I raised was in Galway city. I have been talking to some of the private bus operators in recent days and they are still meeting brick walls with regard to the renewal of licences and effectively having to provide a more limited service for the public. I am glad to see there is some movement on it.

Mr. Hugh Creegan

We hope it will assist.

Would Mr. Creegan provide the committee with a copy of those guidelines?

Mr. Hugh Creegan

We have not produced them yet but we will be happy to supply them when we have them prepared. The intention is to produce a set of guidelines in the next couple of months.

If the NTA has not produced the guidance document, how can bus operators operate? Mr. Creegan states the council is responsible and that he hopes the NTA can do this, that or the other.

In fairness, if there is a commitment to address it, I think the message is that the quicker that is done, the better. I welcome the fact it will be done.

I agree, but I know of a case of a private operator who picked up a girl with special needs at a traditional bus stop, a place where the bus stopped when I was at school, and the private operator has had to stop picking her up because the council said it was too dangerous, even though it was a traditional bus stop. The sooner the NTA does this-----

Mr. Hugh Creegan

We will do it, we will not sit on this. On the issue of green buses and natural gas buses, that is something we have been looking at but they are more expensive. In a time of constrained funding, the choice is between up-to-date diesel vehicles or fewer higher technology and more environmentally friendly vehicles. We prefer to have more buses on the road.

Let us be clear, as Mr. Creegan says he has to do the best with the money that is in front of him. The green vehicles cost between €18,000 to €20,000 more. Would it be fair to say the NTA decision is to remain with the diesel vehicle and not go down the route of natural gas buses?

Mr. Hugh Creegan

Not exactly. Deputy Fitzmaurice mentioned natural gas buses but the trend across Europe is towards electric buses in urban areas-----

Which cost a good bit more.

Mr. Hugh Creegan

Our understanding is that there will be a green fund set up that will allow us to supplement the funding we have with some extra funding that will allow us to go for greener technology vehicles. Whether that is this year or next year, we do not know but we will be able to react whenever that happens.

The Deputy asked if we are flying in the face of common sense on the tendering of bus routes.

The short answer is no. At this stage all we have done is pre-qualification of tenders. We have adopted the approach that is adopted around Europe. The next stage is where the tenders go out and the financial considerations will be a major component of that choice.

Let us be clear, as I have seen the marks awarded to those who tendered, that many operators have lost routes where they did not elaborate - they said they were driving for 35 years whereas the person who stated they did this, that and the other course got more marks for writing a heap of palaver.

I have a background in transport. The way procurement procedures are being processed for the bus routes especially flies in the face of common sense. Common sense has gone out the window.

Mr. Hugh Creegan

I am talking about the tendering of the PSO service.

I am talking about the procurement process for school runs.

Mr. Hugh Creegan

I will have to leave that to Bus Éireann to answer, as I thought the Deputy was referring to the other tender process for PSOs. I will hand over to Mr. Nolan.

Mr. Martin Nolan

Thank you. In response to the question of fuel, we buy 12 months hence. The price of the market is now 99 cent but the price forward is much higher than that at present. We look at that all the time. If we get a reduction in our costs, we feed that into the system. With a price of 99 cent or €1, people are more inclined to use their cars. If the cost has reduced from €1.50 to €1, the revenue potential is a little bit lower, so it is back to giving the bus an advantage over the car, so that we can all move forward.

Is Bus Éireann VAT exempt?

Mr. Martin Nolan

We are zero rated which means we cannot reclaim our VAT.

VAT is included in Bus Éireann's fuel cost.

How much fuel in money terms does Bus Éireann use in the year?

Mr. Martin Nolan

We spend about €27 million.

So the company cannot claim back the VAT.

Mr. Martin Nolan

No, but we do get a small fuel rebate.

Those with lorries get that as well.

Mr. Martin Nolan

That is the same.

There is €5 million in VAT that Bus Éireann is not allowed to claim back.

Mr. Martin Nolan

The big saving in bus transport is getting 50 people out of a car on to a bus; even if it is a 20 year old bus, it will save more. The new vehicles we have are as good as the hybrids with little or no emissions. There are no double deck gas buses. One would normally use gas buses, but we can put more people on to double deck buses which are not run on gas.

The bus is considered a short-term asset, it is not like buying a loco engine that will last 25 years. It is shorter than that as within seven years the major life is gone. The time is not right to bring something in but it is moving in that direction.

The school rules came from a Government review body. l can assure members there were as many complaints about the catchment boundary system as there are about the new system.

There is an appeals mechanism for bullying. If members want to bring an instance of bullying to me, I can perhaps sort some of them out for them.

On the issue of private bus operators picking up students during weather alerts when the Bus Éireann buses do not pick up students, some 90% of the service we provide is contracted to private operators. We have nearly 4,000 vehicles out there that we bring in from the private side.

Was I correct in saying that?

Mr. Martin Nolan

No. The drivers are all trained to a standard where they do not take chances. Our drivers are trained to that standard as well. When there is a major red event, we do not travel, but when it goes down to yellow or even further, the driver has to drive according to conditions and if he feels it is unsafe, he does not operate. As members know in rural Ireland, in some places one cannot prejudge it as on one side of a hill there is black ice and the other side of the hill is different. I do not have any evidence of that.

The result of the tendering process last year was that 3% of the people who tendered did not get their contracts renewed, but half of them got different contracts so at the end of the day 1.5% of the people did not remain in the scheme. As the Deputy said, there were some problems around the washing of the vehicles, so we have reviewed that in the new tender documentation. We listen to what is going on.

Is it the procurement process that Bus Éireann is tied into or is it the way that it was set down that caused the problem?

Mr. Martin Nolan

No. What we wanted was to maintain the standard and the cleanliness of the school fleet. There was a problem with cleanliness which has now been fixed. We gave a few marks for cleanliness in the procurement process.

I have seen instances, as Mr. Nolan is aware, where the operator provided a cheaper service and was doing the runs for years but because he did not write a heap of palaver, did not retain the run. That is a fact.

Mr. Martin Nolan

As we have seen in many instances, procurement is a fairly heartless business. One cannot give an advantage to an incumbent over a new person.

There have been some allegations that people who tendered did not have buses or drivers and were awarded the contract and had to go looking for them after securing the tender.

Mr. Martin Nolan

Anybody who applied for our buses had to say what bus they had and what drivers they were using.

All I am saying is that some of those allegations were made.

Mr. Martin Nolan

It is a fairly emotive subject, but we have done it as fairly as we can.

Would I be correct in saying that people who submitted a lower cost tender than others lost out to operators who were dearer because they did not say that they had completed CPC and washed the bus every second day?

Mr. Martin Nolan

It is not just a financial operation, it is a safety operation as well. There are instances where people who were cheaper did not get a contract because their answers under certain safety criteria did not come through. It would be on very rare occasions.

It would have been a good idea with the introduction of the new system to explain to people that they needed to elaborate. If a person was doing a bus run for thirty years and never had a problem, never had an accident and the tender price was okay, and as the person did not write an essay, the person lost out because they did not write down all the different things. It would have been a good idea to give people guidelines on how to fill out the forms. There are problems in many areas over that process.

Deputy Fitzmaurice raised the issue of gas-fuelled vehicles which I raise in the context of Bus Éireann's commitment to examine ways to reduce costs.

An old chestnut is the reason for using large coaches on some routes in rural areas instead of using smaller buses. Does Bus Éireann have smaller buses than the 45 seaters? There is a service that goes from Cavan through Leitrim down to Sligo on a Saturday morning. I see it nearly every Saturday morning around 10 a.m. and there would not be any more than 15 or 20 people on this big 45 seater bus. Has Bus Éireann looked at similar routes across the country and considered introducing smaller buses?

My next question relates to the NTA and perhaps it might be better if I was to talk to the witnesses privately about Westlink Coaches, which is currently in a tangle over licensing of a route. To put it simply, they are allowed to carry university students from Leitrim through Roscommon to Galway university, where they drop them near the campus. However, they are not allowed to pick up the same passengers on a Sunday evening going through Castlerea, Ballygar, Williamstown and Dunmore. There is another operator on that route. They have lodged an appeal because it seems their last appeal was turned down on the basis that there were insufficient numbers. They have now provided further numbers coming from NUIG, GMIT and they are also being told by NTA that there is a Bus Éireann service operating on the same route.

That Bus Éireann route goes all over the country, going into Ballyhaunis and into Mayo, yet as we know the students want to get home. I wish to raise this issue and I am just flagging it as I would like to talk privately to somebody about it afterwards. This operator is providing more than 20 jobs in Drumshanbo, a small town of 800 people. It would be devastating if he were to lose out. It does not make sense to me that he is allowed to bring passengers from Drumshanbo through Roscommon and Galway into NUIG and yet not allowed to bring passengers whom he picks up in Castlerea because a licence was given to another operator. This issue needs to be examined. I was with the Minister when he was in Leitrim recently. He promised the people from Westlink he would contact the witnesses about this. I would like to have this issue addressed sooner rather than later.

The Senator can raise it privately afterwards.

What about the fleet?

Mr. Martin Nolan

On a Saturday morning one would have full loads early in the morning but in the course of the day, fewer people would travel on the bus. In regard to the unit cost of running a vehicle per kilometre, the cost of the vehicle would be a very small part of it as the labour element of the cost would be much greater. A bus could be on a different route on a Friday or on a Sunday evening.

I thank Mr. Nolan.

On behalf of the joint committee I thank Mr. Aidan Murphy and Mr. Martin Nolan for outlining Bus Éireann's performance and its remit in 2015. I thank Mr. Hugh Creegan, and Mr. Tim Gaston for clarifying the role of the National Transport Authority, particularly in relation to the rural bus service.

The joint committee adjourned at 11.25 a.m. until 9.30 a.m. on Wednesday, 27 January 2016.