Dáil Éireann Debate, Thursday - 19 December 2013
9. Deputy Alan Farrell asked the Minister for Transport, Tourism and Sport if he will provide an update on the National Transport Authority’s plans to tender out 10% of the publicly subsidised bus routes currently operated by Dublin Bus and Bus Éireann. [54331/13]
Amharc ar fhreagra32. Deputy Mick Wallace asked the Minister for Transport, Tourism and Sport his views on the likely impact of the privatisation of certain bus routes; and if he will make a statement on the matter. [54395/13]
Amharc ar fhreagra45. Deputy Timmy Dooley asked the Minister for Transport, Tourism and Sport the timeframe for the open market tender process of bus routes of both Bus Éireann and Dublin Bus; if a similar process will be considered from Iarnród Éireann; and if he will make a statement on the matter. [54398/13]
Amharc ar fhreagraThe National Transport Authority, NTA, recently announced the privatisation of some bus routes in the south east to and from Dublin. During the consultation period, there was opposition to that privatisation. Does the Minister of State not agree that the evidence of privatisation from other jurisdictions highlights the human, social and economic costs of having a public service delivered by private companies?
I propose to take Questions Nos. 9, 32 and 45 together.
The direct award contracts for the provision of public service obligation, PSO, bus market services held by Dublin Bus and Bus Éireann expire late next year. The awarding of subsequent contracts is a matter for the NTA. On 5 December and in accordance with the provisions of the Dublin Transport Authority Act 2008, the NTA announced that up to 10% of publicly subvented PSO bus services would be tendered out, with the new services commencing in the summer of 2016. Tendered services are due to commence in August of that year.
There are a number of trade union concerns about potential tendering for PSO services. These include the impact on industrial relations and cost savings measures within CIE at a general level and the specific implications of transfer of undertakings legislation, TUPE, and related issues. However, it must be recognised that the proposals outlined in the consultation process are relatively modest and there will be a long lead in before any tendering takes effect. Furthermore, it is of course open to the two incumbent companies to compete for any tendered route. Sometimes, this point is lost. It should not be assumed that there will be any reduction in staff numbers or that TUPE will even arise.
Following the announcement by the NTA on 5 December, these issues need to be addressed by it and the bus companies through constructive engagement with the unions in the course of the procurement process over the next two years. Following a meeting in recent weeks that the Minister, Deputy Varadkar, and I attended with all of the trade unions involved, including SIPTU and the NBRU, the chairman of the NTA has been asked to carry out such a structured engagement.
The winning tenderer will be required to deliver a specified service under which the timetables, fares and standards of service will be set down by the NTA. There will be no cherry-picking. The State, in the form of the NTA, will be determining frequency and routes of these services. The intention is that a better service can be procured for the same PSO subvention that is currently provided or that the same service can be provided for a lesser cost to the taxpayer.
Regarding the Irish Rail market, the European Commission announced a package of proposals last January aimed at delivering better quality and more choice in railway services across Europe. Among the proposals is the opening of domestic rail passenger markets from 2019 onwards. The package also contains a proposal that would lead to all PSO contracts being awarded by means of a competitive tender process from December 2019. The discussions on these latest proposals have not yet commenced. The proposals are being scrutinised by my Department and the approach to be taken will have regard to the views of interested parties. As the House will be aware, Ireland has specific rail issues, given the fact that we are surrounded by water.
Most Deputies would agree that the Thatcherite legacy of privatisation of rail and bus services was shocking. Shortly after the privatisation of British Rail, British Government subsidies increased from £1 billion in 1980 to £6 billion in 2006. Likewise, the privatisation of bus services saw similar consequences, with bus fares increasing by 40% within eight years. Tendering on a route-by-route basis meant that there was no integration of services and the number of operators increased drastically.
Does the Minister of State not agree that, if certain routes are privatised, the providers will be geared towards making money rather than creating a service? Is this the way we should be going?
I thank the Deputy, but I wish to point out something. This is opening up for tendering, not direct privatisation per se. This week, I met Dublin Bus and spoke with the chief executive of Bus Éireann. I will speak with the chief executive of Irish Rail today.
The Deputy is right about the mixed results in other countries that underwent full privatisation of services. How the process is managed is the important issue. This is a modest opening up of the market, up to 10%. Basically, it involves orbital routes in Dublin's commuter areas and some routes in Waterford city. This is the decision of the NTA.
The way in which the service is managed will be crucial. It is the National Transport Authority that will dictate and decide the service level, routes and frequency of services. It will not be decided by the company that has been successful in the tender process. That is critical and something about which we are adamant.
That is classic; opening up for tendering is not privatisation.
Not necessarily.
I wish the Minister of State well in selling it to his colleagues in the unions. That is his job. He has taken a decision to begin the process of privatisation. As a member of the Labour Party, he is responsible for that act. I do not care how he minces his words about opening up for tendering and in referring to the role of the National Transport Authority. It is a Government decision. The NTA is an independent agency, but when it comes to a significant policy shift such as this, the decision must be taken at Cabinet level. Fine Gael’s ideology has always involved the privatisation of the public transport system. It is a decision with which I fundamentally disagree. I agree with Deputy Mick Wallace that the privatisation of London Bus and the rail system ultimately cost the state a hell of a lot more money in an effort to get people to go back and utilise the services. What happened was that as the companies drove to gain more profits for themselves, services deteriorated and the good work done during the years in achieving the modal shift of moving people out of their cars and onto public transport was reversed. That is my concern about what will happen in this country.
The Deputy has said he is not in favour of opening up the markets. That is amazing, considering that he voted in the legislation that guided the process. The legislation that guided us was prepared by a previous Minister, Noel Dempsey.
Things have changed a lot since.
It was that threshold we had to meet, in conjunction with the European legislation that also guides us in the area.
Positions have changed.
It is Fianna Fáil legislation that is guiding us in this area, which the Deputy voted through. He is contradicting himself completely. He said one thing at one time and he is now saying completely the opposite.
That is what the Minister of State did, too. He opposed it.
I am happy that this is a modest proposal. Following meetings with them this week, I am confident that the bus companies will be in a position to submit very good tenders for those services being put out to tender. They are in a very good position and I hope they will win some of the routes. We do not know what the circumstances will be post-tender. What is happening is that there is a very modest opening up of routes. There are those inside and outside the House who have an ideological belief more routes should be opened up. I do not believe they are happy with the small change taking place.
The Minister, Deputy Leo Varadkar, is extremely happy. He has had the door unlocked.
I do not know about that.
The door is widening by the day.
The Deputy could not be more wrong.
I am only happy because it is Christmas.
Does the Minister agree that consecutive Governments have done very little for public transport in Ireland? By international standards, public transport services are weak, while rail services have been allowed to disintegrate. If one lives in the countryside, the bus service leaves too much to be desired. Most people have to have a car in order to get from A to B. Rather than follow in the footsteps of other Governments, would the responsible Ministers not be tempted to leave their mark and do something serious in terms of investing in public transport in a major way? What is being done is further watering down public transport services by putting some of them out to tender. It would be positive if the Minister were to put a serious effort into improving public transport in Ireland, which is something that has not happened in a long time.
It is most disappointing to hear a Labour Party Minister defend the privatisation of part of Dublin Bus and Bus Éireann. The wording “opening up to tendering” is, without doubt, opening the door to privatisation. The Government’s attitude seems to be to blame it on the NTA, but the decision was an ideological one taken at Cabinet level.
Will the Deputy, please, ask a question?
I would like to know whether a cost-benefit analysis was carried out. The PSO subsidy is in place. Will savings accrue from it? As far as I can see, that seems to be one of the issues involved. Will it lead to a reduction in passenger numbers? A significant effort has been put into Dublin Bus and Bus Éireann to increase passenger numbers and put a proper public system in place. That has been working. Will there be an analysis of the impact that it will have on communities? How does one assess various routes that help people who are affected by a disability or who have bus passes? These concessions have all been hard fought for and won and we are going to throw them away.
I thank both Deputies for their questions. On Deputy Mick Wallace’s generic question, given the financial and other constraints on the Department, a considerable amount has been achieved. Like me, the Deputy represents a rural area. Rural transport services have been completely upgraded. An entire new structure is in the process of being delivered which will further integrate public transport services. The previous Administration wanted to get rid of them under the McCarthy report. Previously, rural transport services were not joined up with other public transport services. That issue is being addressed. For the first time, the school bus service is being integrated with public transport services. School buses travel in and out of towns and through villages and previously could not pick up anyone on the way back, even though fuel was being used and people were paid. A recent change means that they are now allowed to pick up other passengers. The first service to be provided is in Waterford and a new rural hackney licence will commence this week. I urge every Deputy to promote it because it is something that has universally been welcomed. Much work has gone into co-ordinating the services. It takes time, but I made a commitment to do it.
Deputy Dessie Ellis failed to acknowledge an important fact - the National Transport Authority will decide the routes and frequency of services. Whoever wins the competition will not decide. The NTA will decide on the service delivered to ensure the people mentioned by the Deputy, whom we wish to protect, will still have the services they require. That is a critical point which many people do not seem to get. The NTA will decide the routes, service levels and frequency of services for the company that wins.
As Deputy Pat Deering is not present, Parliamentary Question No. 11 will not be taken in the House.
